Brett Harrison, the former president of FTX US, has voiced strong criticism of leveraged trading in the cryptocurrency market, calling it a “major problem” that poses significant risks to investors and market stability. As he prepares to launch a new trading platform focused on traditional financial assets, Harrison is taking a definitive stance against replicating the high-risk structures that have become commonplace in digital asset markets.
Leveraged trading, where investors borrow funds to amplify their positions, can result in greater profits—but also in devastating losses. This dynamic, Harrison argues, is particularly dangerous in the inherently volatile crypto market. He believes that allowing high leverage on such assets is not only irresponsible but contributes to systemic instability. His concerns align with those of market analysts who have pointed to the October 10 flash crash—when $19 billion was erased from the derivatives market in a single day—as a stark example of the risks associated with excessive leverage.
To counter these issues, Harrison is launching a new venture called Architect, a perpetual futures exchange that will focus exclusively on traditional financial instruments. Unlike crypto-centric platforms, Architect will feature products tied to equities, forex markets, and commodities such as rare metals. By steering clear of crypto derivatives, Harrison aims to build a safer, more regulated environment for professional traders and institutional clients.
According to Harrison, the crypto industry has become too tolerant of risky practices, including offering users leverage levels as high as 100x. While such high leverage may appeal to high-stakes speculators, it can also trigger massive liquidations, exacerbate price swings, and lead to cascading failures across trading platforms. He believes that tighter risk controls and regulatory oversight are essential in preventing future market chaos.
Harrison’s perspective is informed by his experience at FTX US, where he witnessed firsthand the consequences of poor risk management. FTX’s dramatic collapse in late 2022, which stemmed in part from reckless trading behavior and inadequate internal controls, served as a cautionary tale for the broader industry. While Harrison had left the company before its implosion, he remains outspoken about the structural flaws that contributed to its downfall.
With Architect, Harrison is taking a proactive approach to avoid repeating those mistakes. The platform will reportedly incorporate advanced risk management tools and limit the amount of leverage available to traders, particularly on volatile assets. He envisions an exchange that prioritizes transparency, reliability, and long-term sustainability—values he feels are often missing in the crypto trading space.
In addition to excluding crypto markets, Architect will focus on building infrastructure that appeals to institutional investors. This includes offering advanced APIs, low-latency execution, and integrations with existing financial systems. By targeting a more traditional clientele, Harrison hopes to capture a segment of the market that is underserved by current crypto-focused platforms.
The launch of Architect comes at a time when global regulators are increasingly scrutinizing the use of leverage in financial markets. In the United States, for example, the Commodity Futures Trading Commission (CFTC) has signaled that it may tighten rules around crypto derivatives trading, particularly where retail investors are exposed to high leverage without sufficient disclosures or risk warnings.
Harrison believes that his platform can serve as a model for responsible innovation in the trading industry. By focusing on transparency and risk mitigation, he aims to offer a compelling alternative to the “Wild West” environment often associated with crypto derivatives exchanges.
Furthermore, the move away from crypto-focused products may also reflect a broader shift in investor sentiment. With the crypto market still recovering from the fallout of multiple high-profile failures, many institutional players are re-evaluating their exposure to digital assets. Platforms like Architect that offer familiar instruments within a regulated framework could be well-positioned to attract this cautious capital.
Still, Harrison acknowledges that crypto is not going away—but he insists that its trading infrastructure must evolve. “There’s a place for crypto in the future of finance,” he said, “but we need to build that future with better tools, better oversight, and a deeper understanding of the risks.”
In this context, Architect’s launch represents not just a new business venture, but a philosophical pivot: away from unchecked speculation and toward a more disciplined, professional approach to trading. It’s a vision that may resonate with both regulators and investors seeking a safer path forward in uncertain markets.
The debate over leverage in crypto is likely to continue, especially as new retail users enter the space without fully understanding the risks involved. Education, transparency, and responsible platform design will be critical in shaping the next chapter of digital finance. Harrison’s Architect could serve as a bellwether for how the industry adapts in response to past failures—and whether it can finally deliver on its promise of a more equitable and resilient financial future.