Crypto Billionaire Annoys Wall Street Giants With Derivatives Plan: Bloomberg

At a posh financial-industry gathering, this year’s main attraction was a face-off between a crypto billionaire and a futures-exchange kingpin.
At the event in Florida, Sam Bankman-Fried, whose FTX platform has rapidly become a major venue for investment in virtual coins, squared up against Terry Duffy, the longtime CEO of CME Group Inc. CME.
FTX’s proposal to execute every part of customers’ crypto derivatives trades on its own, bypassing other exchanges, banks, and financial middlemen, was one of the subjects they discussed in detail, writes Bloomberg.
If regulators approve FTX’s proposal, many in traditional finance are concerned that the approach may be applied to other assets, undermining Wall Street’s monopoly over lucrative elements of market plumbing.
Opponents say that FTX’s approach will undermine investor protections, cost brokers their jobs by cutting them out of trading, and risk disrupting well-functioning markets.
The proposal, which is being considered by the Commodity Futures Trading Commission, could give FTX a foothold in global markets for everything from oil to gold to currencies.
FTX would put up $250 million of its own money to cover damages if buyers or sellers failed to meet their obligations. This is in contrast to CME’s arrangement, which requires its member brokers to contribute to a community fund to cover defaults.