FTX
Tue, Apr 15FTX is a centralized cryptocurrency exchange (CEX) based in The Bahamas, established by Sam Bankman-Fried and Gary Wang in 2019. Initially located in Hong Kong, the exchange relocated to The Bahamas following regulatory actions from China, the U.S., South Korea, and Thailand.
At its height in 2022, FTX boasted over one million users globally and recorded an average daily trading volume of USD $10 billion. The platform facilitates spot market cryptocurrency trading and also functions as a derivatives exchange and clearinghouse, offering trading in cryptocurrency futures and options.
Non-U.S. users have the option to stake FTT, the utility token of FTX, which can be utilized to lower trading fees on the platform and serve as collateral for futures positions. Additionally, staking FTT allows users to earn interest.
FTX operates two platforms: FTX.com for international users and FTX.us for clients in the U.S. Unlike their international counterparts, FTX.us clients can explore, buy, and sell NFTs.
The exchange is regulated by the Commodity Futures Trading Commission (CFTC) and caters to both retail and institutional investors. Bankman-Fried and FTX successfully raised significant funds from investors, including $900 million at an $18 billion valuation in July 2021, followed by an additional $400 million in January 2022. By September 2022, FTX was seeking to raise $1 billion at a valuation nearing $32 billion.
In August 2020, FTX acquired Blockfolio, a cryptocurrency portfolio tracking application, for $150 million. However, on November 11, 2022, FTX filed for Chapter 11 bankruptcy in the United States due to a liquidity crisis and mismanagement of customer funds. It was also revealed that Sam Bankman-Fried would resign as CEO amid allegations of transferring $10 billion in user-deposited funds from FTX to his hedge fund, Alameda Research, to support operations.
In November 2022, Jon Ray was appointed to replace Sam Bankman-Fried, with the aim of maintaining the existing structure as much as possible.
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