FTX.US becomes latest crypto exchange to apply for a bank charter

abdelaziz Fathi

The US-based affiliate of Sam Bankman-Fried’s FTX crypto exchange has applied for a New York trust charter (becoming a New York Limited Liability Trust Company) with the state’s Department of Financial Services (NYDFS).

FTX

If approved, the coveted licence will enable FTX.US to offer its cryptocurrency trading services to clients based in New York. Additionally, a NY Trust Charter allows a company to provide services in many other states without obtaining additional licenses.

To date, the state’s regulator has only approved a handful of companies engaged in cryptocurrency business activity, namely wallet and custodian BitGo, Gemini and Coinbase exchanges, as well as stablecoin issuer Paxos.

FTX.US will be on even firmer footing with its designation as a qualified provider under the SEC’s requirements. Also, the NY approval reduces reliance on third-party financial institutions and allows the exchange to provide deposit-taking, custody and fiduciary services for digital assets, which are usually limited to banks or registered broker-dealers.

With a banking charter, FTX.US can provide sub-custody services for any financial institution seeking to secure large amounts of digital assets, like holding assets for the main custodian. However, a New York charter would place the exchange under increased regulatory scrutiny.

FTX.US was valued at $8 billion

Stablecoin issuer Circle is also in discussions with US regulators to become the fourth crypto-native company to score a federal trust charter through the Office of the Comptroller of the Currency (OCC).

FTX US made headlines last month when the exchange has become an investor in New York City-based IEX Group, the eighth largest stock exchange operator globally. The startup took a bet and made a strategic investment in the “Flash Boys” exchange as it aims to leverage its expertise and infrastructure to establish a regulated marketplace for buying, selling, and trading digital asset securities.

FTX.US, an affiliate of cryptocurrency exchange FTX, has seen its valuation climb to $8 billion following the successful closing of Series A funding worth $400 million. The parent company, FTX Trading, was recently valued at $32 billion.

The fresh capital injection came on the heels of FTX launching a non-fungible (NFT) marketplace exclusively for customers living in the United States. The platform enables users to mint, buy and sell NFTs — all traded cross-chain across the Ethereum and Solana blockchains.

FTX.US also acquired Ledger Holdings Inc., parent company of a CFTC-regulated digital currency futures and options exchange, which was then rebranded as FTX US Derivatives.

Read this next

Retail FX

Overcharts partners with dxFeed for CME Group Market Depth

“More and more traders are using Market Depth while conducting volume analysis. Its primary function is to help traders identify potential support and resistance levels.”

Digital Assets

CoinGecko expands collaboration with CER.live security rating

CoinGecko, one of the earliest crypto data aggregators, has integrated the security score data from the CER.live rating. The trust assessments given to crypto projects will be integrated into their pages on CoinGecko website to draw users’ attention to the importance of security.

Metaverse Gaming NFT

Klaytn taps Parity Technologies to build infrastructure for Klaytn-Substrate

Klaytn has initiated a collaboration with blockchain infrastructure company Parity Technologies to strengthen its tech stack and meet the demands of enterprises looking to harness the crypto technology.

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

Retail FX

Interactive Brokers’ traders now have direct access to TradingView

Professional charting and trading platform, TradingView has integrated the US-listed brokerage firm Interactive Brokers as the latest online trading partner.

Digital Assets

This Web3 infrastructure provider is on the verge of a radical upgrade

The crypto industry fueled the anticipation of the arrival of web3 with the introduction of Decentralized Finance, Metaverse, and more. And today, that web3 is finding support from various developers looking to build and develop the space to extract the most benefits out of it.

Digital Assets

Crypto bots: trading assistant 

The cryptocurrency market is a volatile one, with huge gains and dramatic dips. However, the most informed traders can use automated tools to maximize profits while minimizing risks. 

<