FTX's CFTC application to offer direct trading is dead

FTX is pulling the plug on its application to offer its automated margin in the U.S.

The bankrupt crypto exchange withdrew its application, made through a subsidiary, to offer a novel structure for trading derivatives. The application would have allowed FTX to serve as a derivatives clearing organization while permitting direct margin trading.

The proposal was a point of priority for the Commodity Futures Trading Commission, which hosted a roundtable that included FTX CEO Sam Bankman-Fried back in May. The proposal proved controversial even before the collapse of FTX last week. The firm and its constellation of affiliates, including the theoretically separate U.S. branch FTX.US, filed for bankruptcy protection Friday.

A separate FTX-backed legislative proposal aiming to establish greater authorities for the CFTC had become a priority item for the commission, which would gain more power over crypto exchanges and markets if it were to pass. 

The CFTC has said that it's monitoring FTX's sudden collapse, and the Securities and Exchange Commission and Justice Department are reportedly investigating.