Conversation

is right; we don't need the FCM when we have real time liquidations. But we still need separation of custody and the DCM, otherwise it leaves us vulnerable to a DCM being run by Bernie Madoff (claiming to have funds he doesn't)

forbes.com

FTX Billionaire Sam Bankman-Fried Seeks Knighthood At The CFTC’s Round Table

This past Wed., FTX's Sam Bankman-Fried and 40+ derivatives industry Sr. execs gathered at a CFTC event to voice views on path to open up, reinvigorate U.S. futures and bring crypto trading onshore.

SBF

@SBF_FTX

Replying to

@mikebelshe

1) custody would likely be with DCO, not DCM 2) could also do it with strong CFTC oversight of custody; could also have multiple allowed custody sources all with CFTC oversight

5:05 AM · May 30, 2022Twitter Web App

Retweets

Likes

This Tweet was deleted by the Tweet author. Learn more

Replying to

and

You must work for $HOOD

Replying to

and

✅ Custody of collateral is absolutely with DCO - and any entity providing it (directly or as service provider) is already subject to strong CFTC oversight - as DCO can’t just sign up any custodian.

Replying to

Totally agree on (1) so long as DCO and DCM are independent. If FCMs are removed from the structure, then any collateral the client previously would have held with the FCM should be held away from the DCM too.

Replying to

On (2), I don't think that is good enough; need separate custody w realtime reconciliation to avoid single points of failure. For the same reason tech makes it possible to remove the FCM, tech also makes realtime settlement at the DCO possible.

Replying to

and

Hello bro

Show more replies