Goldman Sachs reportedly discusses the integration of crypto derivatives with FTX

Goldman Sachs, a Wall Street investment bank, is reportedly in talks with crypto exchange FTX as it plans to integrate a few features of its derivatives businesses. The CEOs of the two companies met in the Caribbean to discuss a potential partnership. Also, Goldman Sachs might work with FTX to help the exchange to achieve an IPO.

Recently, FTX US confirmed the launch of FTX Stocks and acquired a US-regulated derivatives exchange. The firm allows few users to trade stocks in its beta phase. Now, according to a report from Barrons, Goldman Sachs aims to integrate certain features of the platform ranging from trading futures directly, introducing clients, and acting as an on-ramp to the exchange to providing capital top-ups for clients.

The US exchange is also seeking a license amendment from the Commodity Futures Trading Commission (CFTC) as it plans to act as both an exchange and middleman between counterparties in leveraged derivatives trades.

Now, such a role is played by firms like Goldman Sachs, which acts as a “Future Commission Merchant,” or FCM. Meanwhile, FTX continues to push for an entry in TradFi as the proposals for integration with the exchange from FCMs are “absolutely” heating up, as Brett Harrison, president of the FTX US.

“We already have several FCMs committed to technically integrating with the exchange,” Harrison claimed. “There are so many big names you can probably name.”

Noteworthy, that even if FCMs approach FTX to integrate its derivatives services, it is uncertain if regulators will sign up for the same.

Meanwhile, Sam Bankman-Fried, the founder and CEO of crypto exchange FTX, met Goldman Sachs (GS) CEO David Solomon and the two firms discussed potential collaborations for the near future, Financial Times reported.

According to FT, Goldman could work in an advisory capacity with FTX while also helping the crypto exchange work towards its goal of an Initial Public Offering or IPO.

Crypto derivatives trading has been a topic of debate for quite some time, with many European and even the U.S. prohibiting most crypto exchanges from offering leveraged trading. Binance had to shut its derivatives offerings in several EU countries following regulatory interventions.