Crypto Exchange FTX Expands to Stock Trading

Crypto Exchange FTX will allow customers to trade stocks and exchange-traded funds on its popular trading app alongside bitcoin and dogecoin.

FTX said on Thursday it opened access to its new stock trading service to a limited number of US users. It plans to expand the feature to all US customers over the next few months, the head of the crypto exchange’s US branch said in an interview. .

The app could eventually offer trading in other asset classes, such as futures, all in the same interface, said FTX.US President Brett Harrison. “What we ultimately want to deliver is a comprehensive financial services app,” he said.

FTX plans to offer commission-free stock trading like most major US online brokerages. But it won’t route customer orders to high-speed merchants in exchange for cash, a controversial practice known as pay-for-order flow, Harrison said. Payment for order flow has come under increased scrutiny from lawmakers and regulators since GameStop’s frantic trading last year. Corp.

and other meme stocks.

This means that FTX will lose money on stock trades, relying on crypto profits to subsidize the new service. “We don’t necessarily need to see a profit from day one,” Harrison said.

Harrison first said the crypto exchange was working on adding stock trading in January, and FTX opened a waiting list for the new service the following month.

Other apps have already combined stock and crypto trading, like Robinhood,

Block Inc.

CashApp and Public.com. But FTX’s move is less common in that it represents a crypto-native company moving into traditional markets, rather than a conventional financial player expanding into digital currencies.

Based in the Bahamas, FTX runs one of the largest crypto exchanges in the world. Over the past few months, it has made a series of moves into traditional asset classes. Those ambitions continued even as a huge sell-off wiped out more than $1.5 trillion in value from cryptocurrency markets and sent bitcoin down more than 50% from its November all-time high. .

In April, FTX acquired a stake in stock exchange parent company IEX, made famous by Michael Lewis’ 2014 book “Flash Boys.” Last week, billionaire co-founder and managing director of FTX, Sam Bankman-Fried, revealed that he had purchased a 7.6% stake in trading app maker Robinhood Markets. Inc.

Mr Bankman-Fried said he viewed the stake as an investment and had no intention of influencing Robinhoodit is

management or strategy.

Write to Alexander Osipovich at [email protected]

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Appeared in the print edition of May 20, 2022 under the title “Crypto Exchange FTX Opens Platform to Stock Trading”.

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