Goldman Sachs is considering a partnership with FTX. Attracted by the exchange’s insane growth, David Solomon, CEO of the investment bank, met with Sam Bankman-Fried, founder of FTX, in March. The two executives discussed a possible IPO and the platform’s relationship with US regulators.
Sam Bankman-Fried met with the CEO of Goldman Sachs
Goldman Sachs, a famous American investment bank, recently got closer to FTX, the growing cryptocurrency exchange. According to information shared by the Financial Times, David Solomon, CEO of the bank, met with Sam Bankman-Fried, founder of the platform, in March 2022. The meeting took place in the Caribbean.
Citing “people familiar with the matter,” the media outlet claims that David Solomon mentioned, among other things, the idea that Goldman Sachs could advise FTX in its negotiations with US regulators.
FTX.US, the U.S. arm of the exchange, is currently looking to work with U.S. financial regulators. As part of this effort, the platform has invested in Investors Exchange LLC (IEX), a U.S. stock exchange. Thanks to IEX’s expertise in regulatory matters, FTX hopes to consolidate its position with the regulators.
David Solomon reportedly mentioned the Commodity Futures Trading Commission, the agency responsible for regulating derivatives. Last month, FTX asked the agency for permission to offer leverage to individuals without going through a financial broker.
Rather than relying on an intermediary, Sam Bankman-Fried’s firm suggests settling derivatives transactions directly. FTX’s proposal will be considered at a hearing scheduled for May 23. Rostin Behnam, chairman of the regulatory agency, says he wants to be careful.
The head of Goldman Sachs has also asked the founder of FTX about a “potential future collaboration” regarding “a price of convenience”. The investment bank would like to be able to buy crypto-currencies at a pre-determined price with the exchange. In an agreement of this kind, the selling price of the assets does not depend on the price of digital currencies.
Bank offers to help FTX in a potential IPO
Finally, David Solomon also said he is willing to advise FTX in a potential IPO. Goldman Sachs was one of the banks that accompanied Coinbase during its stock market listing in April 2021.
For the time being, Sam Bankman-Fried seems reluctant to raise funds on a stock market. According to indiscretions obtained by the Financial Times, FTX, whose valuation has reached $32 billion, should focus on private fundraising in the short term.
When interviewed by the Financial Times last July, Sam Bankman-Fried said that FTX did not need to go public despite the undeniable advantages of the process:
“We are in the fortunate position of not having to do it because we don’t need capital. [On the other hand, there are potentially great benefits to going public, such as brand recognition.
The interview with David Solomon came as FTX has accelerated its international expansion in recent months. In early March, the exchange announced its arrival in Europe by establishing a European subsidiary with headquarters in Switzerland. A few weeks later, FTX set up a branch in Australia.
The platform’s crazy growth has obviously caught the attention of traditional finance players such as Goldman Sachs. After recognizing crypto-currencies as a new asset class, the bank has increased its investments in the sector. For example, Goldman Sachs has invested $5 million in the startup Blockdaemon, which is developing a staking infrastructure for institutions.
After relaunching its cryptocurrency trading service after a three-year hiatus and offering exposure to Bitcoin (BTC) to its wealthiest clients, the bank aims to “strengthen its presence” in the digital assets market, according to the Financial Times. For the record, Goldman Sachs was one of the first banks to enter the crypto-asset sector back in 2018.
