Trading Safely: A New Approach to High-Stakes Bets

Brett Harrison, former head of FTX US, is set to launch a new trading platform, Architect, with a unique twist: no crypto.

Why No Crypto?

Harrison calls high-leverage crypto trading "irresponsible" and a "major problem." This stance comes after a recent crypto market crash that erased billions in value.

What Will Architect Offer?

• Traditional assets like stocks and forex.
• Perpetual futures, allowing bets on asset price movements.
• Leverage, but with strict limits:
• 25x for the least volatile assets.
• Lower limits for riskier assets.

The Crypto Leverage Problem

• Crypto exchanges often allow up to 1,000x leverage.
• This fuels massive trading volumes but also catastrophic losses during crashes.
• Decentralized exchanges make high leverage easily accessible without identity checks.

Harrison’s Criticism

While some argue high leverage democratizes trading, Harrison believes it:

• Encourages reckless behavior.
• Leads to liquidation cascades (massive simultaneous losses).
• Exchanges should prioritize safety over profits.