FTX

FTX Cryptocurrency Derivatives Exchange

FTX is a cryptocurrency and derivatives exchange offering an exchange platform for hundreds of coins with low trading costs. This in-depth review will take you through the many products of FTX, supported marketplaces, functions, and expenses associated with getting started trading on the platform. See if FTX is the right crypto exchange for you by reading our complete FTX review.

What is FTX?

FTX is one of the largest cryptocurrency exchanges in the world. It is a trading-focused cryptocurrency exchange that offers a variety of products such as derivatives, options, volatility products, and leveraged tokens. The FTX platform provides many functions that serve both experienced traders and new traders. It can also provide services to professional trading organizations.

Who owns FTX?

FTX is a Bahamian-based cryptocurrency exchange founded by MIT graduates Sam Bankman-Fried and Gary Wang in 2019. Before launching the platform, they founded Alameda Research in 2017. Sam Bankman-Fried is currently the CEO of FTX. His former job was as a trader at the international ETF desk on Jane Street Capital. Sam was joined by Gary Wang, the company's current CTO, who aided him with his experience as a Google software developer.

Where is FTX headquartered?

FTX is headquartered in the Bahamas after moving from Hong Kong in September 2021. In July 2021, FTX raised $900 million from over 60 investors, including Softbank, Sequoia Capital, Third Point Management, Paul Tudor Jones, and Alan Howard, at an $18 billion valuation. The exchange has over one million members and a daily trading volume of $10 billion as of July 2021.

Where is FTX available?

FTX is available in almost every country. It is not available in Cuba, Germany, Iran, North Korea, Pakistan, Sudan, Syria, Vietnam, Crimea, or the USA. It does have a separate US-regulated exchange platform available in the USA called FTX.US.

Is FTX safe for traders?

FTX is a highly secure cryptocurrency exchange platform with a good track record of security and performance. However, it is always advisable to do your due diligence and not store large amounts of cryptocurrency on any exchange.

The platform is incorporated in Antigua and Barbuda and licensed under The Bahamas' Digital Assets and Registered Exchange Act, 2020, and regulated by the Securities Commission of the Bahamas. The Gibraltar Financial Services Commission also licenses FTX as a distributed ledger technology provider through its subsidiary Zubr Exchange Limited.

In terms of security, FTX uses two-factor authentication, regular internal audits, and cold storage for most of the cryptocurrency it holds.

Two-factor authentication is required for various actions within the exchange. FTX suggests Authy or Google Authenticator, although there are other 2FA alternatives supported as well. FTX allows you to use 2FA and a different password for any withdrawals on your account.

To further secure accounts, FTX provides IP and wallet whitelisting. Only IP addresses on your whitelist will be able to log in to your account. You can also whitelist crypto wallet addresses so that withdrawals are limited to those on your whitelist.

FTX employs the services of Plaid, a technology that securely transports data from banks to FTX to make transactions on FTX. To begin trading, users must first complete the KYC process.

FTX's KYC regulation

Users that haven't completed the KYC process have the opportunity to withdraw up to $1,000 in lifetime withdrawals. Upon full completion of the KYC process, users can withdraw an infinite amount of cryptocurrency.

The KYC process is two-tiered. The first tier requires users to provide their full name, country of residence, and region. Those who complete this process will have access to a $2,000 daily withdrawal limit.

The next and final tier requires users to provide verifying documents and a selfie while holding their information. Those who complete this process will be able to make unlimited crypto and fiat withdrawals. You can find out more information on the KYC process here on FTX's website.

Key features and Advantages of FTX

Different fiat currencies

FTX's platform accepts a wide range of fiat currencies, including US Dollar (USD), European Euro (EUR), Great Britain Pound (GBP), and Australian Dollar (AUD).

Low fees

FTX is not in the business of charging deposit and withdrawal fees, but like most exchanges, it has a tiering system for trading fees and provides low maker and taker fees. Those filled right away are charged taker fees, whereas orders that aren't filled right away are charged maker fees. Fees for makers and takers begin at 0.10 percent and 0.40 percent, respectively. The more the volume of trades a user makes per month, the lesser the fees.

Note: FTX does charge a withdrawal fee for USD transfers which is covered later in the review.

Great Security

In addition to using two-factor authentication 2FA, IP and wallet whitelisting, and a reliable KYC process, FTX also employs additional security for credit card deposits.

Easy Spot Trading

FTX makes it simple to convert stablecoins and issue settlements. For people who want to convert their cash or cryptocurrency to another coin, FTX offers a straightforward method.

A single-margin wallet allows users to exchange and trade numerous forms of crypto derivatives.

FTX offers a wide range of over 270 coins on their platform, which is a good number for most investors and traders.

Earn money by holding and staking FTT

Like Binance and some other crypto exchanges, FTX has an in-house cryptocurrency called FTT, which you can acquire on their site and a few other cryptocurrency exchanges. Users with as little as $100 worth of FTT in their waller can get lots of benefits from staking and holding the coin. Those benefits include discounts in trading fees, airdrop rewards, and a limited number of free withdrawals per day.

NFT marketplace

NFTs (non-fungible tokens) have gained a lot of popularity in recent years. FTX offers a marketplace for users to buy and sell NFTs. Users can also create their own NFTs on the platform and sell them off.

Make money from staking

Traders can profit from the staking tokens by using the exchange and not withdrawing or trading their tokens. When you stake your cryptocurrency using FTX, you earn incentives based on your staked amount. Users can earn up to 8% of their holdings by staking on the FTX platform.

24/7 withdrawal capability

FTX maintains a 24/7 withdrawal availability for users and has never experienced a service interruption for deposit or withdrawal. It also has a backstop fund of 15,000,000 USD to prevent losses or clawbacks.

Trading of virtual assets

FTX offers a diverse range of trading instruments, including those that are only available on the exchange. A number of those trading instruments available for users include Futures, Options, Leveraged Tokens, MOVE Contracts, and Margin Trading. Here is a short explanation of the trading services offered by FTX:

Futures: A futures contract is a contract to buy or sell a particular commodity at a specified future date. FTX supports future contracts for more than 80 cryptocurrencies. It also allows users to trade Perpetual Futures. That is, Futures without an expiry date.

Options: Options are financial derivatives that provide buyers with the right, but not the duty, to purchase or sell an underlying asset at a pre-determined price and date. For now, FTX only supports Bitcoin Options trading. Hopefully, in the future, FTX will expand support for more cryptocurrencies.

Leveraged Tokens: The tokens are ERC20 tokens. FTX gives users the capability to buy and sell these tokens. BULL tokens approximate 3x returns, and BEAR tokens approximate -3x returns.

MOVE Contracts: According to FTX, MOVE contracts represent the absolute value of the amount a product moves in a period of time. Traders can open long and short positions on MOVE contracts based on their discretion. There are three MOVE contracts; daily, weekly, and quarterly MOVE contracts with daily, weekly, and three-month expiration dates.

Margin Trading: This is only available on the US version of the platform. Users with more than $100,000 in their accounts will have the opportunity to enable margin trading, which gives them access to up to 10-times leverage.

OTC Trading: FTX also offers a service called over-the-counter trading. Large traders often use OTC trades when they require additional liquidity and don't want to move the market with their orders. Alameda Research backs FTX's trading desk, which can execute trades on more than 20 coins simultaneously.

Disadvantages and Cons of FTX

One of the most significant disadvantages of FTX is that the full platform capabilities are not available for US customers. Although FTX is available for US customers through a separate platform called FTX.US, it is a stripped-down version of the primary exchange available in other countries.

There's a low withdrawal amount available until users complete a KYC process.

Unlike other crypto exchanges, FTX is relatively new in the crypto space. This is certainly not a disadvantage, but it is something a lot of traders look out for.

Some major currencies are missing on both the international version of FTX and the US version.

Although there are no base withdrawal and deposit fees, FTX charges a withdrawal fee of up to 0.10% of deposits and withdrawals, which exceed trading volume limits.

For fiat withdrawals, any amount less than $10,000 will incur a $75 fee.

FTX.US

Due to US regulations, residents of the United States of America cannot trade on FTX's platform. As a result, FTX.US, a distinct trading platform offering only spot trading, is operational in the United States.

It offers a debit card called FTX Card that connects to FTX.US accounts. Users can pay directly with their cards, and the purchases will be funded automatically from their FTX.US account balances.

US users do not access FTT tokens because FTX.US is a distinct trading platform from FTX.

Conclusion

FTX is an excellent platform for new, experienced, and professional traders. Although it is a relatively new platform in the crypto space that may discourage prospective users, FTX has good potential, providing outstanding services for its users.

FTX also has excellent customer support with technical and operational specialists. They also have a help center and blog that beginners can look to for answers. Additionally, FTX maintains YouTube and Telegram channels where users can learn more about their services.