FTX.com Review 2023 – Shocking Sudden Bankruptcy

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A shockwave went through the crypto world after November 06, 2022, when the sudden news spread like wildfire:

Our review below is therefore no longer up to date or relevant.

FTX is a fairly new crypto broker on the market, which obviously has the ambition to provide a unique, particularly comprehensive and highly professional offer in the world of crypto trading platforms. Whether this has really been achieved, we will take a closer look in this FTX.com review.

About the Company

FTX is a newly registered company. In 2019, Sam Bankman-Fried and Gary Wang decided to establish a company created “by traders for traders”.

They aimed to offer a wide range of trading products compared to the existing cryptocurrency exchanges. The two founders have extensive experience in trading as they are well-known for Alameda Research, a crypto quant fund that is renowned for its volume. FTX exchange is owned by FTX Trading Limited, operates from Hong Kong, and is currently incorporated in Antigua and Barbuda.

Although the trading platform has not been in business for long, they are already at the forefront. After all, they already rank among the top 6 Bitcoin trading platforms in terms of daily trading volume (spot market and derivatives combined).

Availability

FTX services are globally available if the user doesn’t live in a restricted country, such as North Korea, Cuba, Sevastopol, Crimea, Syria, and others. The platform can be accessed by US citizens via FTX.us, and their services and fees might differ from the main platform, FTX.com.

What Can Be Traded On FTX.Com?

TFX specializes in cryptocurrency derivatives, tools that are derived from the value of the underlying product, such as Bitcoin. So, FTX trades the contracts based on the asset, not the cryptocurrency itself, allowing for increased leverage and a wider variety of products. The maximum leverage allowed is 101x on derivative products; for instance, a change of 1% in Bitcoin can lead to a 100% change in the funds, allowing traders to go for “double or nothing”. This approach is also common on BitMEX which allows for 100X leverage. The main derivatives available on FTX.com include:

• Options – a type of futures contract that allows the holder to potentially sell at a strike price in the future, usually ideal for price volatility protection;
• Perpetual Futures – a standardized forward contract that allows the holder to buy or sell at a pre-agreed price;
• Spot – market-matched order for a certain asset;
• Move – a type of contract that settles using the absolute change in the price of cryptocurrency on a daily, weekly, or even quarterly basis;

Leveraged tokens allow holders to have a leveraged exposure on the crypto market without actually having to manage the leveraged position.

FTX Options

FTX options follow the European-style contracts for Bitcoin. These offer the possibility (not the obligation, thus the name “option”), to sell or purchase the underlying asset using a pre-set price on a specific date. These contracts can be open as a put or a call, which means the right to sell (bearish) and the right to buy (bullish).

For example, if the trader opens the call (right to buy) at $7,000 strike price, but this goes up to $7,150 at the expiration date, the trader can buy the package only at $7,000, thus making a profit. Options contracts can be traded long or short with leverage.

A great aspect of FTX is that these can be customized, so you can choose any combination in terms of time and price. Once you set the option, you can request a quote from the platform that is generated within 10 seconds – then, you can accept or not the contract.

FTX Futures

As opposed to options, futures are trading tools that force the user to purchase or sell the asset at a later date. As FTX specializes in cryptocurrencies, this means that futures help to trade assets that have leverage, so you can borrow capital that increases the size of your position. When you trade using leverage, the potential profit increases exponentially, but the same can happen in case of a loss.

These perpetual futures can be used with most popular cryptocurrencies, such as Bitcoin, Ripple, Ethereum, Litecoin, but also crypto assets, such as Bitcoin SV, Chainlink, Tezos, and even EOS. One of the highlights of the platform that attracted such a large user base is the inclusion of futures for lesser-known assets with a lower market cap; for most of these, you cannot trade futures on any other platform. Overall, they have a broad collection of more than 25 futures contracts for assets, but also multiple index funds.

Leveraged Tokens

One highlight of the platform is the leveraged token, a unique feature that characterizes FTX.com. There are four main types of tokens for each future on the exchange: Bull (+3x), Bear (-3x), Half (+0.5x), and Hedge (-1x). Although it sounds more complex, this is an easy way for users to use automated leverage. The token will auto-balance itself throughout the day to keep the target leverage, which decreases the chance of liquidation. This would otherwise take effort to do manually.

FTX introduced these tokens as they are convinced that they minimize the time traders spend micromanaging the collateral or the risk. Another advantage is that they are standalone ERC20 tokens, so the bull/bear token can be transferred P2P or traded elsewhere.

MOVE Contracts

Another first in this industry, the “move” contract is based on the difference between an asset’s initial price and the price at the end of the contract. For example, if BTC is $7,000 at the beginning of the trading day and it closes at $7,150, the move contract expires at $100. This means that a long position is rewarding if the BTC has a considerable move during the day, or a short position if the asset is quite stable. Like futures, move contracts can be opened with leveraged, and there are three types: contracts that expire in one day, weekly, or quarterly (every 3 months).

Prediction Market

Another exciting feature of FTX is the prediction market. This allows users to speculate on any real-life event, such as US elections, and place a trade based on their beliefs. Unlike other trading tools, this option is binary, so you can earn 0% or 100% – either win or lose. The prediction market is an excellent and simple feature provided by FTX and its founders believe that it will become a highly popular trading instrument in the future.

Shorting Altcoins on FTX.com

One of the best features of FTX.com is its “Shitcoin Index”, a recent offering that contains a basket of 58 Altcoins. This group of cryptocurrencies consists of different types that FTX considers that are not in a good position, so they created the perfect opportunity for traders to short them.

The platform is currently the best and most innovative way of shorting alts for several reasons. Firstly, if traders want exposure to a coin offering, not the industry in general, they can short SHIT-perp, which allows them to hedge while limiting the downsides.

For general low market cap altcoins short trades, traders can use SHIT-PERP as the indexed future is one of the limited ways of shorting low cap alt markets. Finally, traders who think that bitcoin has too much dominance can simply buy all the altcoin futures indexes and sell SHIT-PERP.

Cryptocurrencies on FTX

The following altcoins can be traded on FTX in Futures markets or as leveraged Tokens:

SOL, TOMO, SNX, CREAM, BAL, MTA, DMG, RUNE, SXP, LUA, KNC, WAVES, MTA, MKR, TRUMPGO, OMG, AKRO, BYND, HNT, HXRO, CHZ, COMP, HT, SQ, MATH

The following Stocks / Assets can be traded on FTX in the form of derivatives:

BABA (Alibaba), TSLA (Tesla), PAXG (PAX Gold), PYPL (PayPal), SPY (SPDR S&P 500 ETF), FB (Facebook), AAPL (Apple), NVDA (NVIDIA), BNTX (BioNTech), UBER (Uber), AMZN (Amazon), PFE (Pfizer), NFLX (Netflix), TWTR (Twitter), ZM (Zoom), GOOGL (Google)

FTT Token

FTT is the cryptocurrency broker’s own token. Similar to Binance with their BNB token, FTX also has implemented certain measures to encourage people to use the token. FTT can be traded against USD, USDT and BTC and holders get a trading fee rebate. One big motivation for holding the token is the token burning that occurs frequently.

The platform buys back certain amounts of their own tokens from the market and burns them to constantly decrease the available supply. This increasing scarcity is supposed to help price rise in the long run. In particular, FTX buys back FTT equal to 33% of trading fees that are generated on FTX crypto markets, same applies to 10% of the additions to the in-house insurance fund and 5% of the fees that are earned from any other uses of the broker platform.

FTX.com Fees

Trading fees apply as follows, according to account Tier status:

Maker:

• Tier 1: 0.02%
• Tier 2: 0.015%
• Tier 3: 0.01%
• Tier 4: 0.005%
• Tier 5: 0.00%
• Tier 6: 0.00%

Taker:

• Tier 1: 0.07%
• Tier 2: 0.06%
• Tier 3: 0.055%
• Tier 4: 0.05%
• Tier 5: 0.045%
• Tier 6: 0.04%

Futures Trading Fees:

The platform doesn’t charge any fee on Futures settlement.

Leveraged Tokens Fees:

• 0.10% fees on creation & redemption
• 0.03% for daily management
• From 50x leverage, trading fees increase by 0.02%
• From 100x leverage, trading fees increase by 0.03%

High leverage fees are added to the FTX insurance fund.

Deposits and Withdrawals:

are free of charge. FTX even pays the miner fees that occur with every cryptocurrency withdrawal from the network’s side. Usually that fee gets subtracted from the withdrawal amount, but not with FTX.

Constant Development

Although they are mainly a cryptocurrency platform, FTX has already introduced some intriguing features and it keeps improving its offerings. For instance, following the negative WTI May contract for oil, they decided to introduce Oil Futures, which means, of course, shifting away from the crypto focus.

User Experience

Unfortunately, FTX does not have a demo account for beginners to learn how to use the platform without making an initial deposit. However, it is easy to set up an account in a couple of minutes and it does not require any complex verification.

Types of Accounts and Verification

There are three main account types available on FTX and they come with different KYC requirements. For traders who do not want to provide any name or country of residence, it is possible to create an account using only an email address and it has a $1,000 withdrawal cap. The other three types require some form of verification, ranging from simple ones to more complex:

• $2,000 daily limit/ $9,000 daily limit if the trade is higher than the transfer volume; documents required include email, name, and country of residence;
• Unlimited crypto withdrawals; documents necessary: full legal name, date, and place of birth, address and proof of address, description of the source assets, government ID, such as passport, and, finally, a picture of the trader holding the ID and a handwritten paper that includes the date and the text “FTX”;

Unlimited cryptocurrency withdrawals and OTC fiat wire transfers; additional documents needed are recent proof of address and a recent bank statement.

How to Sign-Up

Signing up on FTX.com is quite straightforward and similar to any other trading platform. You need to click on the “Register” tab, then “sign up”, and verify the email address by opening the mail received. The “Account security” section allows the trader to secure the account using SMS, Authy, or Google Authenticator.

After this, it is possible to deposit the funds and start trading, but the limit is $1,000 unless the other types of verification are performed. For higher trading limits, the account holder must open the “Settings” tab and follow the steps for KYC verification.

Is Dashboard User-Friendly?

The dashboard is quite straightforward. It has a left panel that displays the main sections, such as leveraged tokens, OTC, options, volume monitor, wallet, positions, orders, and more.

Deposits and Withdrawals

There is no minimum deposit required on FTX, while the maximum withdrawal depends on the verification step the trader completed. Also, there are no fees for deposits or withdrawals. Depositing USD, TSD, USDC, PAX, BUSD, and HUSD is considered as USD Stablecoin deposit, so any of these will be matched 1:1 with USD Stablecoins. Similarly, withdrawing USD Stablecoins as 1:1 works with USDC, PAX, TUSD, BUSD, and HUSD without incurring any fees. Traders can also deposit USDT or withdraw the coin as ERC20 or OMNI.

Order Types

All important order types for advanced trading settings are available on the platform.

The most common ones are market and limit orders; they also offer stop orders which can help traders limit their losses, even trailing stops, take profit orders, post only order setting, immediate or cancel orders and more.

Margin and Collateral

The margin is shown in the USD section of the “Wallet” on the dashboard, and this can be funded by depositing the coins discussed above. All positions use the same collateral pool, and all coins in the wallet count as collateral. Each of the subaccounts has a central collateral wallet which utilizes cross margining for the account.

Traders can switch from cross margin to isolated margin to set a tighter limit for potential losses. If you want to implement an isolated margin, all you need to do is create a subaccount for the specific position and place the collateral. In other words, the fund you can lose on a particular trade is limited to the fund in the subaccount.

It is worthwhile to understand that the account can increase the position only if the margin fraction is above the initial margin fraction. For instance, for a small position, the margin fraction can be a minimum of 5%, so accounts can have a leverage of 20x. As the position is higher, the initial margin fraction also increases.

For instance, if you have a $1,000 collateral, then the leverages are: 3x ($3,000), 5x ($5,000), 10x ($10,000), and 20x ($20,000). If the initial margin factor is 12%, then the maximum leverage is calculated as 1/12%, or 8.333x – this results in a position of $8,333 for collateral of $1,000. The maximum leverage allowed by FTX is 101x.

What About the Chart?

The charts are quite standard, such as the Trandingview.com, but it can be easily customized. The users can rearrange the order book, order entry form, and others.

Fiat Currencies and Currency Pairs

For fiat currencies, users need to be KYC level 3. Any fiat withdrawal lower than $10,000 is charged with a $75 fee; the main currencies include USD, EUR, GBP, AUD< HKD, SGD, ZAR, CAD, CHF, and BRL. These are available for both deposits and withdrawals. In terms of supported trading pairs, FTX offers one of the largest numbers of different crypto pairs, allowing users to trade any currency in any pair.

SMS/Email Trade Alerts

Unfortunately, FTX does not currently have any SMS trade alerts or email notifications.

FTX Mobile Phone App

FTX Mobile is a recently developed app for both Android and iPhone. It has a friendly user interface and it is quite straightforward to navigate on-the-go. It is also secure, featuring fingerprint support for enhanced safety, among others. It is consistently updated by its developers, boosting its performance and functionality.

FTX Security

Account Security – 2FA & Password

The FTX account is protected using different methods. Firstly, the password must have a combination of letters, numbers, and special characters, without predictable patterns. The second step is 2FA setup which is compulsory, and users can find the Two-Factor Authentication in their profile. Then, each withdrawal is thoroughly protected by 2FA and a withdrawal password. In case of a password change or 2FA removal, all withdrawals are locked for 24 hours; if required, the user can contact FTX to verify their identity and manually enable their account.

Custom Logins

There are also other security measures in place. For instance, FTX allows its users to use custom logins that can be used to allow other individuals to log in to the account. The original user can set up configurable permissions for each additional user.

Whitelisting

The whitelisting feature is also quite comprehensive. Each user can access their profile to set up their own security permissions. For instance, IPs can be whitelisted in that the API key can be used only from a certain IP address. Additionally, wallet addresses can also be whitelisted, so all withdrawals go to a pre-selected whitelisted address.

FTX Customer Support

FTX can be contacted via email at support@.. or Telegram. They typically reply within a few hours, ideal for beginners who are just starting on their platform and require a quick assistance. The website also features a detailed FAQ section that includes numerous common questions and detailed articles regarding the use of FTX, KYC, futures, leveraged tokens, and many more.

Security Breaches and Hacking

As it was established in 2019, FTX is a quite recent trading platform. Therefore, there have not been any security breaches. Despite this, the company is a recent player on the market and security remains a hot topic for all exchanges that trade cryptocurrencies. Fortunately, they have numerous protection layers that ensure user safety and security, and most of these are even customizable, such as whitelisting IPs, for instance. Given the fact that FTX is backed by Alameda Research, this can provide extra insurance that the company benefits not only from strong security, but is also managed by some of the most experienced traders.

Pros

• Wide range of trading products, including unique ones
• Low trading fees and no withdrawal/deposit charges
• Up to 101x leverage
• Robust security layers
• Anonymous trading available using only an email address

Cons

• No demo account is available
• Might be discouraging for first-timers due to the numerous features available

Summary

All in all, FTX is by far one of the most advanced platforms nowadays due to the extensive range of trading products. And it’s THE place to go for all professional traders who don’t hesitate to perform short trades in altcoins markets. This bitcoin and altcoin trading broker platform is suitable for both beginners and more seasoned traders due to the different instruments they offer, making the experience as complex or as simple as you need.