Sam Bankman-Fried wanted to let retail investors borrow money to trade crypto derivatives: CFTC head
Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, at the Bitcoin 2021 conference in Miami, Florida, on June 5, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
Sam Bankman-Fried, co-founder of bankrupt crypto firm FTX, spent almost a year trying to convince regulators to let him introduce a derivatives product that would allow retail investors to trade with borrowed money, according to Rostin Behnam, chairman of the Commodity Futures Trading Commission.
In an interview with CNBC’s “Squawk Box” on Wednesday, Behnam said Bankman-Fried had been lobbying the CFTC to amend the rules so FTX could let users trade derivatives using margin rather than paying upfront. He also wanted to offer the contracts directly to users, without having to go through a futures commission merchant.
“It would have been a non-intermediated, margined model,” said Behnam, who described the proposal as a “very tricky issue from a risk perspective.”
Prior to its bankruptcy filing last week, FTX had a registered derivatives platform with the CFTC called FTX US Derivatives. The platform was a rebranding of LedgerX, a company that FTX acquired in 2021.
FTX US Derivatives is one of the few FTX-related properties that’s not a part of its bankruptcy proceedings and remains operational today. However, it appears to have returned to using the LedgerX brand. If you go to the FTX US Derivatives website, it redirects you to ledgerx.com. And Zach Dexter, who was CEO of FTX US Derivatives, says on his LinkedIn profile that he’s CEO at LedgerX. The platform lets traders buy options, swaps and futures on bitcoin and ethereum.
Starting in Dec. 2021, Bankman-Fried and his senior leadership team made frequent visits to the CFTC to advocate for an amendment to its existing license, Behnam said.
When asked what Behnam thought of Bankman-Fried over the course of meeting with him for nearly a year, the chairman said that the former FTX chief “knows markets, at least he tries to suggest that” and he “wanted to really aggressively have this amendment passed.”
Bankman-Fried’s backers appealed to the CFTC directly to back his plan, Behnam said. They included Fidelity Investments, Fortress Investment Group, and even universities from across the country.
FTX, which was valued at $32 billion by private investors earlier this year, spiraled in spectacular fashion last week as reports of liquidity problems resulted in customers withdrawing billions of dollars a day from their accounts. However, FTX didn’t have the capital to honor those requests because it had used customer deposits for a variety of purposes, including for trading at Bankman Fried’s hedge fund, Alameda Research. Bankman-Fried also disclosed on Twitter on Wednesday that FTX had built up around $13 billion of leverage.
Behnam said his agency’s staffers were still in the process of reviewing FTX’s application for an amended license when FTX and approximately 130 additional affiliated companies, including Alameda and FTX’s U.S. subsidiary collectively filed for bankruptcy protection.
Since then, LedgerX has reportedly withdrawn its application for leveraged derivatives trading.
Before the implosion, Bankman-Fried had been trying to play the role of industry savior as the crypto market sank and lenders and hedge funds went belly up. In May, he also bought a 7.6% stake in trading app Robinhood, which at the time had lost more than three-quarters of its value since its IPO last year. In April, FTX bought a stake in equities exchange IEX.
“If you think about it, in retrospect, with his Robinhood acquisition and his relationship with IEX — it goes beyond crypto what FTX was trying to do,” Behnam said.
WATCH: Authorities eyeing bringing Sam Bankman-Fried to the U.S. for questioning
After a month off trying to wrap our heads around all the chaos surrounding EVs, solar, and everything else in Washington, we’re back with the biggest EV news stories of the day from Tesla, Ford, Volvo, and everyone else on today’s hiatus-busting episode of Quick Charge!
It just gets worse and worse for the Tesla true believers – especially those willing to put their money where Elon’s mouth is! One believer is set to lose nearly $50,000 betting on Tesla’s ability to deliver a Robotaxi service by the end of June (didn’t happen), and the controversial CEO’s most recent spat with President Trump had TSLA down nearly 5% in pre-morning trading.
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Hyundai is getting ready to shake things up. A new electric crossover SUV, likely the Hyundai IONIQ 2, is set to debut in the coming months. It will sit below the Kona Electric as Hyundai expands its entry-level EV lineup.
Is Hyundai launching the IONIQ 2 in 2026?
After launching the Inster late last year, Hyundai is already preparing to introduce a new entry-level EV in Europe.
Xavier Martinet, President and CEO of Hyundai Europe, confirmed that the new EV will be revealed “in the next few months.” It will be built in Europe and scheduled to go on sale in mid-2026.
Hyundai’s new electric crossover is expected to be a twin to the Kia EV2, which will likely arrive just ahead of it next year.
It will be underpinned by the same E-GMP platform, which powers all IONIQ and Kia EV models (EV3, EV4, EV5, EV6, and EV9).
Like the Kia EV3, it will likely be available with either a 58.3 kWh or 81.4 kWh battery pack option. The former provides a WLTP range of 267 miles while the latter is rated with up to 372 miles. All trims are powered by a single electric motor at the front, producing 201 hp and 209 lb-ft of torque.
Although it may share the same underpinnings as the EV2, Hyundai’s new entry-level EV will feature an advanced new software and infotainment system.
According to Autocar, the interior will represent a “step change” in terms of usability and features. The new system enables new functions, such as ambient lighting and sounds that adjust depending on the drive mode.
It’s expected to showcase Hyundai’s powerful new Pleos software and infotainment system. As an end-to-end software platform, Pleos connects everything from the infotainment system (Pleos Connect) to the Vehicle Operating System (OS) and the cloud.
Pleos is set to power Hyundai’s upcoming software-defined vehicles (SDVs) with new features like autonomous driving and real-time data analysis.
As an Android-based system, Pleos Connect features a “smartphone-like UI” with new functions including multi-window viewing and an AI voice assistant.
The new electric crossover is expected to start at around €30,000 ($35,400), or slightly less than the Kia EV3, priced from €35,990 ($42,500). It will sit between the Inster and Kona Electric in Hyundai’s lineup.
Hyundai said that it would launch the first EV with its next-gen infotainment system in Q2 2026. Will it be the IONIQ 2? Hyundai is expected to unveil the new entry-level EV at IAA Mobility in September. Stay tuned for more info. We’ll keep you updated with the latest.
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Tesla has unveiled its lithium-iron-phosphate (LFP) battery cell factory in Nevada and claims that it is nearly ready to start production.
Like several other automakers using LFP cells, Tesla relies heavily on Chinese manufacturers for its battery cell supply.
Tesla’s cheapest electric vehicles all utilize LFP cells, and its entire range of energy storage products, Megapacks and Powerwalls, also employ the more affordable LFP cell chemistry from Chinese manufacturers.
This reliance on Chinese manufacturers is less than ideal and particularly complicated for US automakers and battery pack manufacturers like Tesla, amid an ongoing trade war between the US and virtually the entire world, including China.
As of last year, a 25% tariff already applied to battery cells from China, but this increased to more than 80% under Trump before he paused some tariffs on China. It remains unclear where they will end up by the time negotiations are complete and the trade war is resolved, but many expect it to be higher.
Prior to Trump taking power, Tesla had already planned to build a small LFP battery factory in the US to avoid the 25% tariffs.
The automaker had secured older manufacturing equipment from one of its battery cell suppliers, CATL, and planned to deploy it in the US for small-scale production.
Tesla has now released new images of the factory in Nevada and claimed that it is “nearing completion”:
Here are a few images from inside the factory (via Tesla):
Previous reporting stated that Tesla aims to produce about 10 GWh of LFP battery cells per year at the new factory.
The cells are expected to be used in Tesla’s Megapack, produced in the US. Tesla currently has a capacity to produce 40 GWh of Megapacks annually at its factory in California. The company is also working on a new Megapack factory in Texas.
Ford is also developing its own LFP battery cell factory in Michigan, but this facility is significantly larger, with a planned production capacity of 35 GWh.
Electrek’s Take
It’s nice to see this in the US. LFP was a US/Canada invention, with Arumugam Manthiram and John B. Goodenough doing much of the early work, and researchers in Quebec making several contributions to help with commercialization.
But China saw the potential early and invested heavily in volume manufacturing of LFP cells and it now dominates the market.
Tesla is now producing most of its vehicles with LFP cells and all its stationary energy storage products.
It makes sense to invest in your own production. However, Tesla is unlikely to catch up to BYD and CATL, which dominate LFP cell production.
The move will help Tesla avoid tariffs on a small percentage of its Megapacks produced in the US. Ford’s effort is more ambitious.
It’s worth noting that both Ford’s and Tesla’s LFP plants were planned before Trump’s tariffs, which have had limited success in bringing manufacturing back to the US.
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