Post-FTX: Brett Harrison Launches TradFi Futures Exchange, Flags Crypto Leverage as ‘Major Problem’

The aftermath of the FTX collapse continues to send ripples through the digital asset landscape, prompting industry veterans to re-evaluate risk and strategy. Among them is Brett Harrison, the former President of FTX US, who has publicly declared crypto leverage trading a “major problem” while simultaneously announcing his new venture: a perpetual futures exchange focused exclusively on traditional assets. This significant pivot, revealed on November 1, 2025, marks a clear intention to navigate away from the perceived excesses of native crypto markets towards a more regulated and stable financial environment.

A Strategic Pivot to Traditional Assets

Harrison’s new platform, details of which are still emerging, is designed to offer perpetual futures for a range of traditional financial instruments, consciously sidestepping direct exposure to volatile cryptocurrencies. This strategic decision reflects a broader sentiment among some finance professionals who, while acknowledging the technological innovation of blockchain, remain wary of the regulatory ambiguities and inherent risks within the unregulated crypto derivatives space. The move suggests a desire to build robust, compliant financial infrastructure utilizing modern technology without inheriting the systemic issues that plagued past crypto-native exchanges.

• Focus on Familiarity: The exchange will leverage established traditional asset classes, appealing to institutional investors accustomed to regulated markets.
• Risk Aversion: By avoiding crypto, Harrison aims to mitigate operational and counterparty risks inherent in the less mature digital asset sector.
• Technological Innovation: Despite the traditional asset focus, the platform is expected to incorporate cutting-edge trading technology, potentially including distributed ledger principles for efficiency and transparency.

The Perils of Crypto Leverage Trading

Harrison’s critique of crypto leverage is particularly poignant, given his former role at FTX US, an entity intrinsically linked to one of the industry’s most spectacular downfalls. He unequivocally states that excessive leverage in the crypto market is a “major problem,” contributing to extreme volatility and magnifying losses for both retail and institutional participants. This perspective aligns with increasing calls from regulators globally for stricter controls over high-leverage products in decentralized and centralized finance alike.

His commentary highlights several key concerns:

• Liquidation Cascades: High leverage amplifies the impact of price swings, leading to rapid, large-scale liquidations that destabilize markets.
• Retail Investor Exposure: Many retail traders, often lured by the promise of outsized gains, may not fully comprehend the risks associated with highly leveraged positions.
• Systemic Risk: The interconnectedness of leverage providers and users can create systemic vulnerabilities, as seen in various crypto market downturns.

Lessons from the FTX Era and Beyond

The shadow of FTX’s collapse looms large over Harrison’s recent statements and business decisions. The implosion, largely fueled by a lack of robust risk management, opaque operations, and arguably, the availability of excessive leverage, served as a stark lesson for the entire industry. Harrison’s pivot can be seen as an attempt to apply the lessons learned, prioritizing stability, transparency, and regulatory compliance from the outset, rather than attempting to retrofit them onto an existing, often wild, crypto structure.

This evolving narrative within the digital finance space suggests a growing maturity. While innovation continues at pace, there’s a clear recognition that the foundational principles of sound financial engineering and prudent risk management cannot be ignored, regardless of the underlying asset class.

Implications for Digital Finance

Harrison’s new venture and his strong stance on crypto leverage have significant implications. It underscores a bifurcating trend: on one side, continued high-risk speculation within native crypto markets; on the other, a deliberate movement by experienced finance professionals to harness digital asset technology for traditional finance applications, under more stringent controls. This could pave the way for a more responsible integration of blockchain technology into mainstream finance, appealing to a broader, more conservative investor base.

Conclusion

Brett Harrison’s launch of a traditional asset perpetual futures exchange, coupled with his blunt assessment of crypto leverage, signals a noteworthy shift in the post-FTX landscape. It reflects an industry grappling with its past while forging a more sustainable future. By focusing on established assets and addressing fundamental risk concerns, Harrison’s move might represent a new frontier for digital financial innovation – one that learns from history rather than repeating its mistakes, potentially catalyzing a more regulated and robust digital finance ecosystem.