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1) Typical market structure in the US is highly intermediated: when a consumer purchases AAPL, they often go through 10+ counterparties from start to finish.

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1,379

SBF

@SBF_FTX

Feb 6

2) Regulatory frameworks are often built around this assumption: separate licensing for the brokers, clearing, custody, matching, etc. But there are some advantages to a less intermediated system. And more generally, you can apply the same protections to it.

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SBF

@SBF_FTX

3) As long as whichever entity is managing a part of the process is held to the same standard as an intermediary would be, the customer is equally protected--and in many cases, the core entity is held to a higher standard.

6:46 PM · Feb 6, 2022Twitter Web App

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4) At the same time, consumers are given more equitable access to markets and data. If you go to ftx.us, you can place an order directly to the matching engine, and you can access all of our marketdata for free.

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SBF

@SBF_FTX

Feb 6

5) And, finally: in the digital asset ecosystem, blockchains allow exchanges to directly custody and clear assets natively. We've written up a paper on the relationship between investor protections and intermediation here: ftxpolicy.com/investor-prote.

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