Officials of the US Commodity Futures Trading Commission (CFTC) reportedly met with FTX staff before the crypto exchange’s bankruptcy to discuss changes to financial market structure rules but hadn’t made a decision.
The U.S. arm of FTX proposed the plan to the CFTC in March but CFTC Chairman Rostin Benham said Monday (Nov. 28) at a conference that the agency was still considering issues around law, policy and risk, CoinDesk reported Monday.
“There are elements of the application that I think have merit, but ultimately we didn’t come up with a decision,” Benham said at a Financial Times event in London, per the report. “We were actually not even close, because there were more questions.”
FTX withdrew its plans on Nov. 11, the same day it filed for bankruptcy protection, according to the report.
As PYMNTS reported in April, FTX submitted a request to amend its order of registration as a derivative clearing organization (DCO) to allow it to modify its non-intermediated model. At the time, FTX cleared futures and options on futures contracts on a fully collateralized basis.
FTX proposed to clear margined products while continuing with a non-intermediated model. In a nutshell, FTX’s proposal would have allowed margining to happen every 10 seconds, while existing U.S. derivatives exchanges set margins only one a day.
This would have been possible due to the very nature of digital assets and blockchain technology. Additionally, FTX would have introduced a direct-to-investor model, removing the dependency on intermediary futures commission merchants (FCMs).