Exclusive Interview with FTX CEO SBF | Can you actually own Netflix stocks with cryptocurrency?

The cryptocurrency exchange FTX launched a new product last Friday - "tokenized equity," allowing cryptocurrency exchange users to buy tokenized equities of Tesla, Apple, Facebook, Netflix, and Google. As of the deadline, tokenized equity of Tesla has started trading, and other assets will begin trading at 9:30 p.m. on November 2.

Why does FTX want to issue equity tokens?

Sam explained that this move will position FTX as one of the first exchanges in the world to offer a complete range of trading products.

He mentioned that FTX allows trading of cryptocurrencies, fiat currencies, and stocks, not only in spot markets but also in futures and OTC. Equity token trading would provide cryptocurrency traders the opportunity to trade stocks, and vice versa.

Is this a challenge to eToro and Robinhood?

Online brokers like eToro and Robinhood have seen significant user growth this year, especially during the drop in U.S. stocks in March when many young first-time investors saw an opportunity and entered the market through mobile apps. We wonder if FTX aims to tap into this market and compete with online brokers like eToro and Robinhood.

Sam mentioned that while he sees eToro and Robinhood as potential competitors, he also views them as potential partners. FTX is always interested in finding opportunities for product collaborations.

Will there be products other than U.S. stocks?

FTX initially started with well-known individual stocks as products, and this raises the question of whether there will be more traditional assets such as U.S. stock indices, more individual stocks, funds, or even currencies introduced in the future.

Sam mentioned that FTX is also planning to introduce stock market index products, including futures, ETFs, and other products.

Furthermore, in a series of hints on Twitter by Sam, almost all mysteries have been revealed and successfully developed into products. One hint was about a vegetarian burger, which is not part of the current products. Sam explained that it referred to a popular stock of a company called BeyondMeat BYND.US.

Will trading be available 24/7? What about fees?

Given the fixed trading hours of U.S. stocks, we are curious about how FTX will provide this product to cryptocurrency users who are accustomed to round-the-clock trading.

Sam mentioned that equity token trading on FTX will operate 24/7 like other exchanges, and FTX will charge fees based on its existing fee structure. They are also exploring the introduction of contract products.

Sam emphasized that FTX's equity token trading is different from traditional stock brokers. FTX will not be a platform where users trade solely against the exchange. It is a trading platform where users can freely place orders and match them with the market, allowing users and the market to determine the trades.

Can equity tokens receive dividends?

In a previous comparison between eToro and cryptocurrency exchanges, it was mentioned that eToro claimed users could receive dividends this year. If FTX aims to compete in the stock market with online brokers, will cryptocurrency users also have the right to receive dividends?

Surprisingly, Sam confirmed that they can indeed receive dividends. Sam stated that these equity tokens indeed give users the right to dividends and participation in company actions.

Will FTX be listed on other exchanges?

FTX had previously developed leveraged tokens that circulated not only on its own exchange but also on exchanges like Binance. As equity products require more compliance restrictions, we asked Sam about their plans regarding this.

Sam mentioned that currently, these products can only be traded on FTX, and users can redeem stocks through their partner company CM-Equity based on their preferences. As for whether they can be traded on other exchanges, FTX is still studying the possibility.

How does FTX ensure product compliance?

It is intriguing how FTX's equity tokens resemble security tokens, which are known for their high issuance standards and regulatory restrictions internationally. How does FTX manage to offer products that are conceptually similar to "equity tokens" for trading?

Sam explained the relationship between FTX and their partner company. CM-Equity is a compliance financial institution based in Germany that can legally provide stocks to consumers. They are responsible for managing stock custody, KYC, compliance, and product trading monitoring. FTX collaborates with them to offer these products.

Sam emphasized that FTX does not offer these products in regions with regulatory restrictions, such as the United States. Additionally, users must pass level 2 KYC to engage in such trades, and they are provided with prompts to assess their compliance eligibility.

The essence of exchanges: enabling people to trade what they want to trade

Following FTX Exchange for some time, their product developments have been rapid. During the peak of the futures market, they quickly introduced various contracts based on popular topics such as oil, DeFi, etc. During the DeFi boom, Sam surprisingly launched the decentralized exchange Serum and even unexpectedly acquired SushiSwap. Their recent introduction of equity token trading is also refreshing. Whether these products will be well-received or not, FTX seems to be consistently breaking the framework of cryptocurrency exchanges through innovation.

When asked about his view on what defines an exchange, Sam expressed that ultimately, his vision is for FTX to become a leading global exchange. Anything that traders want to trade should be available on the platform. He aims to encompass as much as possible and expand the utility of FTX.