Cryptocurrency Exchange FTX Seeks Approval For Crypto Derivatives, Rivals Object: WSJ

Wall Street Journal reports that the FTX is seeking regulators to allow investors to use derivatives to place leveraged bets on bitcoin.

Though the rivals, including traditional exchanges and financial-industry groups, FTX's proposal might endanger market stability as it will put volatile derivatives in the hands of unsophisticated investors.

"The FTX model would significantly increase market risk," commented Terrence Duffy, CEO of CME Group Inc, which offers a competing bitcoin-derivatives product.

Read Next: Robinhood Merger With FTX Could Be 'Win-Win': Why This Analyst Is Bullish On M&A Rumors.

In an interview, FTX's billionaire head Sam Bankman said, "we're going to have a more complete set of customer protections, disclosures, and suitability checks in place than currently exists in the futures industry." "If anything, we'll be going a little overboard on that," he added.

Last month Coinbase Global Inc COIN launched bitcoin futures. CME launched the bitcoin futures in 2017.

Under the proposed plan, the users could post margins directly to FTX without any brokers involved. As per FTX, its plan has protections to contain systemic risk.