Crypto exchange FTX gets into stock trading
Cryptocurrency exchange FTX will soon allow traditional stock trading alongside its crypto offerings, the company announced in a statement. Press release (Going through The Wall Street Journal). The feature is currently available to a select number of users in the US, but plans to roll it out to more merchants in the coming months.
FTX announces that it will offer commission-free trading with access to “hundreds of US-listed securities,” including common stocks and ETFs. It will allow customers to add money to their accounts through credit card deposits, ACH transfers, and bank transfers. FTX also says it is the first exchange to allow users to fund their accounts with fiat-backed stablecoins, such as USDC. While the price of stablecoins isn’t (theoretically) supposed to fluctuate as much as other cryptocurrencies because they’re pegged to a currency or commodity, a recent decline in the overall crypto market has left some coins stable in difficulty.
FTX plans to route orders directly through the Nasdaq exchange, instead of using the payment for order flow (PFOF) method employed by Robinhood and other exchanges. The PFOF involves brokerages receiving compensation for directing orders to market makers, a process that critics say could pose a conflict of interest, as brokers may wish to direct orders to institutions that increase their profits. The practice has come under intense scrutiny following the GameStop inventory spike that occurred last year.
“With the launch of FTX Stocks, we have created a single, integrated platform for retail investors to easily trade crypto, NFT and traditional stock offerings through a seamless and intuitive user interface,” said Brett Harrison. , the US president of FTX in a statement. .
Robinhood, the Block-owned Cash app, and Public.com also allow users to trade stocks and cryptos – adding FTX to the mix will allow it to directly compete with each platform. Earlier this month, Sam Bankman-Fried, the founder of FTX, revealed its purchase of a 7.6% stake in Robinhood, making him the company’s third largest shareholder. In Bankman-Fried’s 13D filing, he said he had no plans to acquire the company at this time, but as the WSJ points out, this type of form is typically filed by an investor looking to buy more shares of a company or execute a takeover bid.