Goldman Sachs and FTX Reportedly Consider Potential Collaboration

Investment banking company Goldman Sachs (NYSE: GS) is reportedly eyeing a collaboration with crypto exchange FTX. The Financial Times revealed that the CEO of the two companies, Sam Bankman-Fried of FTX and David Solomon of Goldman Sachs, had a closed-door meeting to discuss a possible partnership. The closed-door meeting was held in March in the Caribbean. People familiar with the matter noted that the major subject matter was regulatory concerns in the US. The recent relationship between FTX and Goldman shows the growing partnerships between banking services providers and crypto exchanges. Goldman led Coinbase’s IPO in 2021.

Goldman and FTX CEOs Meet

According to the report, Goldman Sachs promised to render assistance to FTX in reducing the negative effect of regulations in the United States. Goldman will also help with the Commodity Futures Trading Commission (CFTC) regulatory compliance. In addition, the Goldman CEO said the company would be offering banking services to FTX. The executives also discussed a potential public debut for the exchange, which Goldman is willing to help with. The report stated that the CEOs discussed Goldman Sachs advising FTX in its possible public debut. The wall street banking giant is also ready to help the exchange with future bonding rounds.

Last July, Bankman-Fried hinted at the possibility of FTX acquiring Goldman Sachs. He said in a statement that purchasing the bank is not “out of the question.” The CEO added that acquiring Goldman will be further propelled if the exchange’s value continues to grow.

Bankman-Fried also told Bloomberg that he is uncertain about an initial public offering (IPO). At the time, the FTX CEO said the current unfavorable in the market discouraged him from taking the exchange public. However, sources mentioned that FTX is actively seeking more private financing. The crypto exchange company has amassed millions from three funding rounds over time. FTX surpassed a $32 billion valuation following its latest funding round in January. The Series C round closed at $400 million with participation from Paradigm, Tiger Global, and more.

The company said the fresh funds would enable it to expand its global presence. The funds generated at the last financing round are also the smallest of the three funding rounds.

FTX Files Proposal with CFTC

In March, FTX submitted a proposal with the CFTC which would enable it to directly clear trades of its derivatives customers. The commission is holding a hearing for the proposal on the 23rd of May.

At the pre-market trading, Goldman Sachs is up 0.57% to $343. The company’s stock performance has been a combination of good and bad. GS has added nearly 2% over the past year and increased 1.62% in the last month. The banking giant also increased about 6% in the last five days. However, Goldman has lost 10.85% since the year started and another 1.80% in the last three months.