Crypto exchange FTX allows clients to trade stocks and exchange-traded funds on its popular trading app in addition to bitcoin and dogecoin.
FTX said Thursday it has opened access to its new stock trading service to a limited number of US users. It plans to extend the functionality to all US customers in the coming months, the head of the crypto exchange’s US branch said in an interview.
The app could eventually offer trading other asset classes, such as futures, all within the same interface, said Brett Harrison, president of FTX.US. “Ultimately, what we want to offer is a financial services everything app,” he said.
FTX plans to offer commission-free stock trading like most major US online brokerage firms. But it won’t forward customer orders to fast merchants in exchange for cash, a controversial practice known as order flow payment, Mr Harrison said. Order flow payment has been under more scrutiny from lawmakers and regulators since last year’s insane trading in GameStop Corp.
and other meme stocks.
That means FTX will lose money on stock trades and rely on crypto profits to subsidize the new service. “We don’t necessarily have to make a profit on the first day,” said Mr. Harrison.
Mr. Harrison first said the crypto exchange was in the process of 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, such as Robinhood†
Block Inc.’s
Cash app and Public.com. But FTX’s move is less common as 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 operates one of the world’s largest crypto exchanges. In recent months, it has taken a series of strides in traditional asset classes. These ambitions have continued even as a massive sell-off wiped out more than $1.5 trillion in value in cryptocurrency markets, sending bitcoin down more than 50% from its November record high.
In April, FTX acquired a stake in the parent company of the IEX exchange, made famous by Michael Lewis’ 2014 book ‘Flash Boys’. Last week, FTX billionaire co-founder and Chief Executive Sam Bankman-Fried announced that he was taking a stake in of 7.6% in Robinhood Markets, maker of trading apps. Inc.
Mr Bankman-Fried has said he treats the stake as an investment and has no plans to influence Robinhood‘s
management or strategy.
write to Alexander Osipovich at alexander.osipovich@dowjones.com
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Appeared in the May 20, 2022 print edition as ‘Crypto Exchange FTX Opens Platform for Stock Trading’.
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