Crypto exchange FTX US, in an effort to broaden its customer base and raise the amounts of assets under custody, is extending its no-fee stock trading service to all U.S. users, including non-crypto investors.
The FTX exchange’s U.S. branch said it would not impose fees or monetize trades in a manner akin to Robinhood Markets Inc HOOD, which has come under fire for its payment for order flow business model, which, according to FTX CEO Sam Bankman-Fried, obscures the information that customers receive.
What Happened: Bankman-Fried was interviewed on Fox Business Tuesday about the rejected Voyager Digital Ltd VYGVQ offer, his thoughts on the crypto winter and the newly introduced stock trading portion of the FTX website.
The billionaire was asked how he expects to profit on the stock trading model.
“At the very beginning, we’re not going to be making a profit on this is the actual answer,” Bankman-Fried said. “We want to test things out and see what model works best before we try and think about focusing on monetizing this.”
Thoughts On PFOF: “We think that payment for order flow can act sometimes to obscure the information that ultimately customers get. If we do end up with [charging] fees, we’re more strongly thinking about trying to make those explicit, low, and more than just competitive,” he said.
Thoughts On Stock Options: “Probably the bigger area where I think it’s egregious in a lot of places, is when you look at stock options. On a lot of platforms, customers are losing 20%-30% on their options trades to the spread to keep up — we’re looking hard at ways to take that number way down.”