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What is FTX?

What is FTX?

FTX entered the cryptocurrency market in 2019, providing an extensive range of services on its trading platform, from cryptocurrencies to securities and derivatives. Reaching the top in terms of trading volumes, the exchange has gained credibility and reputation, making it one of the market leaders.

Full name of the company: FTX Trading LTD

Foundation date: 2019

Founder: Samuel Bankman-Fried (USA)

Capitalization: more than $32 billion

Legal status: registration in Antigua and Barbuda, headquartered in the Bahamas

Market geography: most countries in the world, except Japan, China, Singapore, the Bahamas


Company products

FTX cryptocurrency exchange is a dynamically developing trading platform for cryptocurrency transactions. Clients can conclude transactions on the spot market, as well as use a wide range of derivatives (financial derivatives) and securities.

It is a full-fledged online digital exchange used for transactions in virtual coins and crypto derivatives, in particular BTC options. Customers can access spot trading methods in order to transfer funds using fiat and digital coins (Ethereum, Litecoin, Bitcoin). The trading toolkit includes many stablecoins, as well as a constantly expanding list of DeFi tokens.

FTX provides services to both retail and institutional traders, offering a wide range of opportunities for pros. A separate over-the-counter service is supported, allowing interested clients to buy cryptocurrencies.

FTX cryptocurrency exchange runs with the motto “from traders to traders”.

FTX trading tools:

  • More than 40 cryptocurrencies in pairs with BTC, USDT, TRYB, EUR, USD, and BRZ for trading on the spot market;
  • Tokenized shares of 45 companies - all assets are paired with the dollar, while Tesla securities are paired with USD, BTC, and DOGE;
  • Quarterly futures on tokenized shares;
  • Futures - perpetual and quarterly for such coins as BTC, BCH, LINK, ETH, SOL, YFI, index. It is allowed to use a leverage level of up to 1:20. Perpetual futures are traded in combination with PERP (token Pertual Protocol of the decentralized perpetual contract protocol);
  • MOVE contracts – these are BTC futures contracts (quarterly, weekly, daily). Trading is based on the straddle option strategy (simultaneous purchase of an option at certain price values);
  • Leveraged tokens - customers can buy tokens with already built-in leverage. They are denoted as BULL and BEAR - the opening of long (for buying) and short (for selling) transactions, respectively, with a leverage of 1:3. Tokens are issued under the ERC-20 standard on the Ethereum blockchain, with the trading platform automatically rebalancing them in order to maintain the leverage target and prevent liquidation. BTC, BNB, XRP, ETH, XTZ, and LINK tokens are available for transactions;
  • Hash rate futures - it is allowed to trade not only on cryptocurrency price fluctuations, but also on changes in the volume of Bitcoin computing power. This is realized through special HASH contracts;
  • Prediction markets - here, traders can bet on the outcome of specific events, such as who will be elected president, who will win a soccer match, how will the price of a token change, etc.

Extra features of FTX crypto exchange:

  • OTC platform is available for institutional investors;
  • Mobile trading app for iOS and Android smartphones;
  • Transfers of fiat currencies (U.S. dollar, Australian dollar, Canadian dollar, euro, pound sterling);
  • Leverage up to 1:100;
  • Quick conversion of cryptocurrencies and stablecoins right in the user's wallet;
  • Hourly funding mode.

FTX Pay is a payment service designed for safe and efficient transfer of funds and payments. Sellers can accept payments from users, and there are two ways for making transactions:

  • FTX trading account;
  • External cryptocurrency wallet.

The marketplace recommends the first option since it can provide users with detailed payment data, and it also excludes the blockchain fee.

The second option is implemented by setting up FTX payments to a specified wallet, yet the user won't receive data on who is transferring funds. It is also necessary to pay a 1% fee and an additional fee in the blockchain network.

NFT-marketplace – the cryptocurrency exchange offers the following opportunities to its customers when using non-fungible tokens:

  • Bidding or buying NFTs;
  • Participation in an auction either by putting up one's asset or by searching for an asset to purchase;
  • Holding NFT FTX in your gallery to form a collection;
  • Make an exchange for goods or services.

For NFT buyers and sellers there is a fee of 5% of each transaction.

The FTT token is an in-house coin developed by the FTX crypto-exchange, which has the ERC-20 standard. As of today, 350 million coins have been issued, with half of them being "treasury" coins. As a major element of the evolving ecosystem the FTX token is placed on the trading platform and used as collateral on FTX. The crypto exchange will hold regular buybacks and burn of FTTs in the amount of one-third of all fees received. Meanwhile, token holders can gain profits from the exchange's insurance fund, as well as enjoy a discount on fees and a reduced spread for over-the-counter transactions.

FTX Climate is a fund founded by a cryptocurrency exchange to solve key problems in climate change. The fund provides money for research that solves environmental problems, as well as supports initiatives and implements its own projects aimed at making the world a better, greener place.


History

2019 – an American entrepreneur, Samuel Bankman-Fried (SBF), founded FTX, a cryptocurrency exchange and crypto derivatives trading platform, on May 8. Alameda Research, a firm owned by Samuel, managed the assets.

In the first days, the work was conducted from the WeWork co-working space in Hong Kong, and the staff numbered only 10 employees. In order to operate the crypto exchange, there was formed a capital consisting of a part of Alameda Research's profit and investments raised from venture companies in the amount of $8 million.

In July, a native digital currency FTX Token (FTT) was developed and launched, and in December, Binance, the crypto-industry giant, bought out a stake and closed a deal worth $70 million while holding a long-term position in the FTT token. By the end of the year, the exchange was already valued at $18 million.

2020 – the year started with the launch of bitcoin options, but the transactions were still inaccessible to U.S. users. Most notable is that two hours after the launch of the new tool, the trading volume reached 1 million dollars, and a total of about 2 thousand contracts were purchased during the 12 hours of the exchange's operation.

In February, the crypto-exchange management decided to raise funds by offering 125 thousand tokens for sale. The trading platform succeeded in valuing itself at $1 billion.

A new trading asset was added in the same year, namely, futures contracts based on the Bitcoin hash rate. Traders got a chance to profit not due to price fluctuations in the BTC virtual coin but due to growth and changes in its ecosystem.

The U.S. division of the crypto exchange, called FTX.US, opened in the spring in order to serve U.S. users. The platform's portfolio featured such crypto assets as BTC, LTC, USDT, ETH, BCH, and PAXG.

In August, FTX announced a new contract, UNISWAP-PERP, which has been added to the list of traded tools. This is an index future formed by the average weighted sum of the 100 most popular liquidity pools on the Uniswap platform. Thus, all users get access to decentralized markets, while the exchange offers a low commission and leverage option.

During the same period, FTX bought cryptocurrency portfolio tracking app Blockfolio, making it a $150 million deal.

In October, a listing of tokenized stocks was announced, including Tesla, Apple, Facebook, Google, Amazon, Netflix, and the SPDR S&P 500 ETF fund. Customers got the opportunity to buy tokens entitling them to claim a fraction of the actual share of each company. In addition, the entry threshold to the stock market was lowered so that investors with small amounts of capital could also trade shares of the world's top companies.

In just one year of operation, the cryptocurrency platform is gaining fame for its advanced trading solutions and implementation of cryptocurrency derivative contracts. FTX's key performance indicators are as follows:

  • increase in the number of traders on the exchange by 1,000 percent;
  • daily growth in the number of traders is 786%;
  • a 10-fold increase in OTC trading volume compared to 2019 (record daily high of $350 million);
  • new markets added, and their number is 1100 (originally it was 410), the introduction of 71 new assets, including 31 cryptocurrencies, 30 tokenized shares, and 10 fiat currencies;
  • in December, trading volume on the spot markets had already exceeded $1 billion.

2021 – In January, there was an IEO of tokens for Maps.me, a startup that specializes in developing an offline mapping application. It has 140 million users worldwide. The startup managed to raise $50 million.

The previously bought-out Blockfolio service added a zero-commission cryptocurrency transaction option. Specifically, U.S. residents were given access to 19 virtual coins, while users in other countries could use an expanded list of assets.

In early spring, FTX announced that customers could access the PayPal system. In the words of the company's founder himself, all funds would be credited instantly and in any fiat currency, while partners would do the conversion automatically.

On April 21 and 22, the VI Blockchain Life forum was held in Russia, where FTX Crypto Exchange was a Diamond Sponsor. The company provided a 10% discount on the ticket purchase.

The company hired Jonathan Cheeseman, formerly a top executive at banking conglomerate HSBC, as head of OTC sales (OTC). Moreover, at that time, FTX was negotiating with more than 30 institutions to identify priority services and develop beta versions of relevant products.

In May, an IEO was held for Mercurial Finance, a DeFi-protocol that enables the storage, exchange, and issuance of stablecoins based on Solana's blockchain. In addition, a group of companies represented by Alameda Research, Huobi, OKEx, and Solana Ecosystem Fund funded the project's further development.

In early summer, crypto-exchange FTX signed a five-year contract with Major League Baseball, and the FTX.US subsidiary's logo appeared on the umpires' uniforms. The trading platform was granted the right to promote its products on Major League Baseball's social networks.

Shortly tokenized shares of the world's 60 leading companies were launched for trade, and traders were offered round-the-clock access to the market with instant settlements with no counterparty risks.

Tom Brady, a top player in the U.S. National Football League, became an ambassador of the FTX brand and received a stake in the company as part of the signed agreement. Tom's wife, Brazilian supermodel Gisele Bündchen, was also invited to become an advisor on environmental and social initiatives.

On July 20, the FTX cryptocurrency exchange attracted a record $900 million in investments. These funds were raised following a funding round that involved 60 investors (including Sequoia Capital, Thoma Bravo, Third Point, Paul Tudor Jones' family, and Alan Howard). The company was valued at $18 billion, and the finances raised were used to develop and improve products, make strategic investments, and develop software.

Two days later, Samuel Bankman-Fried bought a stake in Binance, arguing that he wanted more flexibility in the company's development with no need to be bound by differences in business management styles.

In August, a new agreement was signed with Riot Games to showcase the brand during the League of Legends tournament.

In the same period, the U.S. division of FTX.US signed a deal to buy a regulated cryptocurrency exchange LedgerX.

In the fall, the head of FTX moved its headquarters to the Bahamas, and by reducing overhead costs, he managed to maintain high profits at the rate of 50 percent. 

The exchange introduced a new NFT release feature that provided full cross-chain compatibility with Ethereum and Solana, and in December, it already opened access to this tool for U.S. users via the FTX.US platform.

The following indicators marked the company's performance in 2021:

  • number of exchange users - more than 5 million;
  • spot trading volume increased by 2,400%, amounting to $719 billion;
  • staff - more than 200 people.

2022 – earlier this year, FTX announced the creation of FTX Ventures, a $2 billion venture capital fund. That unit will invest in crypto projects at different stages of development.

Moreover, another $400 million was raised in a round of financing when the company was already valued at $32 billion.

In March, the Terra ecosystem algorithm stablecoin UST was added to the trading platform, and the UST/USDT and UST/USD pairs for spot trading and transactions with perpetual contracts became available to users.

During the same period, FTX was licensed in Dubai and revealed plans to open a headquarters, while Australian residents were allowed to use the crypto exchange through its new division FTX Australia Pty Ltd. The headquarters operates in Sydney with a full license to provide financial services and offer customers sets of crypto assets and crypto derivatives.

A partnership agreement was signed with the payment provider AZA Finance to promote Web 3.0 technologies in African countries.

Also, Japanese tennis player Naomi Osaka became a partner of FTX to create content aimed at attracting women to the cryptocurrency industry.

The American "subsidiary" FTX.US bought the studio Good Luck Games, which is known for developing the Storybook Brawl card game. As a result of the transaction, the company entered the structure of the cryptocurrency exchange under the name FTX Gaming.

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