FTX Deal Gives Institutions New Access to Crypto Markets

Cryptocurrency exchange FTX is joining Copper.co’s ClearLoop settlement trading network, which will allow it to gain new access to institutional funds.

Copper’s client base of more than 300 institutional asset managers will now be able to trade FTX’s products -- which include derivatives, options and tokenized stocks -- with their funds secured within Copper’s platform, according to a statement from the companies.

FTX, which handled $600 billion in trading volume in May, is the largest exchange yet to join the ClearLoop network. It has more than 1 million registered users, including institutional traders and family offices, according to the statement. Copper offers custody, prime brokerage and settlement services across 250 digital assets and more than 40 exchanges.

“Using a custodian is something we’ve been hearing again and again” for institutions to do crypto trading, said Sam Bankman-Fried, FTX’s founder and chief executive officer, in an interview. “A lot of people are going to want to use some sort of custodial network,” he said, noting that they’re trying multiple things because “I don’t think anyone really knows for sure what is going to end up mattering the most for institutions.”

The cryptocurrency space has matured significantly in the past couple of years, with institutional adoption a major narrative. High-profile market players like Paul Tudor Jones, Stan Druckenmiller, Bill Miller and Anthony Scaramucci have advocated buying into Bitcoin in particular, the largest and original cryptocurrency. At the same time, regulatory uncertainty, volatility and ease of use have held many investors back from jumping into crypto.

Deals like this, which help facilitate connections between institutions and crypto products, may make that easier -- even if some of the shine is off crypto right now as Bitcoin trades around half its record-high level of close to $65,000 reached in mid-April.

“Our clients are some of the largest hedge funds in the world,” Dmitry Tokarev, founder and CEO of Copper, said in an interview. “For these guys, this is absolutely the Holy Grail.”

©2021 Bloomberg L.P.

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