FTX US Holding Back on Token Listings Due to Regulatory Uncertainty: CEO


In brief

  • FTX US offers fewer coin and token listings than many of its competitors.
  • Whereas Coinbase has pushed an aggressive listing strategy, FTX US has emphasized caution.

If you’re trading on Huobi, you have 487 coins and tokens to choose from, according to figures from CoinMarketCap. Binance has an impressive 395 listings. And Coinbase has expanded its offerings over the past two years up to 169—the most for a U.S. based crypto exchange.

FTX US, meanwhile, lists just 27 assets, a fraction of its parent company’s 322.

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That’s intentional, CEO Brett Harrison told The Decrypt Daily podcast: “That is because we’re not sure where regulations are going to end up in terms of what tokens are allowed to be listed or not allowed to be listed—will exchanges receive enforcement action for listing certain tokens that are deemed to be securities later?”

The U.S. Securities and Exchange Commission (SEC) has oversight of securities products. Securities are investments such as shares and bonds that a company or government sells in order to raise capital—and that people buy in the hopes that the seller’s efforts will help them make money.

To a certain extent, Harrison said, the question about what constitutes a security doesn’t matter because it takes attention away from larger considerations about what’s worthwhile for the consumer: “We want to list very, very high-quality project projects with very clear roadmaps and very clear utility.” What he doesn’t want, he said, is “whatever crazy, random-ass token was added to Coinbase in the last couple months.”

Outgoing Robinhood Crypto COO Christine Brown signaled a similar tone at Decrypt and Yahoo Finance‘s Crypto Goes Mainstream event back in November 2021 when discussing whether the trading app would list Shiba Inu. “I also think that our strategy is a little bit different than a lot of the other players out there who are just racing to list as many assets as possible right now. We think that the short-term gain we might get is not worth the long-term trade off for our users.”

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Under founder and CEO Brian Armstrong, Coinbase has pursued a strategy of trying to list “every asset where it is legal to do so,” while warning that offering a token or coin doesn’t constitute an endorsement of the project. In his first earnings call as a CEO of a publicly traded company, Armstrong told shareholders: “We need to accelerate the process by which we review assets and we add them to the site, because we’re quickly going to be in a world here where there’s so many that we’re not going to be able to keep up.”

While FTX US and Robinhood aren’t looking to keep up with every offering, they’re in favor of more regulatory clarity should they be interested in listing an asset. It may be coming.

President Biden in March signed the Executive Order on Ensuring Responsible Development of Digital Assets, which compels various government agencies to research and report back to the White House on potential crypto regulations this year. And just this week, SEC Chairman Gary Gensler revealed that he had asked agency staff to coordinate with their counterparts at the Commodity and Futures Trading Commission to regulate crypto exchanges that offer a mix of securities and non-security assets.

“I don’t know where this is going to end up in the next six months, one year, two years,” said Harrison before Gensler’s comments. “If I had to guess, it would be some kind of joint jurisdiction between the CFTC and the SEC to create some joint oversight regime.”

Good guess. Now if that regime can eliminate some of the guesswork about listings.

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