From: Mark Wetjen

Subject: Re: [EXTERNAL MESSAGE] Update

To: Gruenberg, Martin J.
Cc: Sam Bankman-Fried; Armstrong, Diane
Sent: May 28, 2022 7:04 PM (UTC—04:OO)

Thanks very much Marty.

Sent from my iPhone

On May 28, 2022, at 6: 13 PM, Gruenberg, Martin J. b6 wrote:

Mark,

Good to hear from you. Hope ali is well with you too, Sorry to take so long to respond to your previous email.

i’d be glad to meetwith you and Mr. Bankmart-Fried. if it's GK, l’il ask my assistant, Diane Armstrong, tn foilow up with
you to find a convenient day and time during the week ofiune 13.

Enjoy the rest of the weekend.

M a rty

From: Mark Wetjen <mark@ftx.us>

Sent: Saturday, May 28, 2022 7:28 AM
To: Gruenberg, Martini b6 !
Cc: Sam Bankman-Friedl<sam@ftx.com>
Subject: [EXTERNAL MESSAGE] Update

Chairman Gruenberg,

We hope this message finds you well. Iwanted to follow up on my note from Thursday (sorry for the last—minute request!)
and see if you might have time the week of June 13 to meet with me and Sam Bankman—Fried, the founder and CEO of FTX,
one of the largest crypto exchanges globally.

addresses pro-cyclicality, which has been raised as a concern in our conversations about our risk model (pro-cyclicality is
always a consideration in every risk model, including a credit—based model 7 see e. g. https://www.flame/resources/fia—
issues—white~paper—impact—pandemic—volatilitv—ccp-margin—requirements?
utm_source:newsletter&utm_mediu1r1:email&ulm_term=&utm_content=white%20r)aper&utm_campaiQnZCCPmarginprocvclicalitv).

The second highlights how the FTX risk model used by the clearinghouse has performed during the recent weeks of volatility
in the markets. It has performed very well.

Every risk model has lIadeoffs. A pre—funded, real time model with auto de-risking requires adequate collateral to be placed
on the trading platform at all times, period full stop. This model has countless advantages from a risk perspective. There are
considerations regarding pro-cyclicality, but the risk model has a variety of features to address those issues, include various
features built into the margin model, and price bands and circuit breakers for the matching engine.

Sam and I have worked in traditional market structures, and I strongly believe the FTX model is all things considered a
superior model.

Here are the blog posts:

htt.s://www.fix olicv.com/ osts/risk—mana lenient

htt s://www.ftx Olic ccom/ .osts/risk—manauement—.rocess—and—the—future-an—u.date

Finally, we want to stress our view about the single best thing that the U.S. government can do to address the risks in the

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digital—asset ecosystem: regulate the exchanges. The exchanges are the gate keepers for the ecosystem 7 this is where
stable coins are used, exchanged and redeemed. With the correct regulatory conditions on the exchanges, the risky stable
coins can be controlled or indeed made immaterial to the ecosystem.

We are in the unusual position of begging the federal government to regulate us. We have an application before the CFTC
that lays out for the agency how to do so. All the CFTC has to do is approve it. Once the CFTC does, the others will follow
7 the other major US. exchanges also have CFTC licenses.

Once the derivatives markets for crypto are regulated 7777777 most volumes traded are in derivatives 7777777 the policy framework can
be built out from there, including for spot markets, through legislation and other regulatory action.

We would be thrilled to explain these points fiirther in person if you are amenable to a meeting. And to the extent the crypto
industry comes up in discussions through the FSOC or otherwise, we wanted you to have this context and our views at FTX
about where the federal government should keep its focus as it considers the risks posed by the crypto industry.

All the best,

Mark

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