In a very short period, FTX has made a name for itself and emerged as one of the fastest-growing crypto derivatives platforms. It is consistently ranked within the top-5 crypto derivatives platform by volume.
With its unique positioning and several industry-first derivatives products, FTX is becoming one of the favorite crypto margin trading platforms among retail and institutional class traders.
So, what makes this exchange a unique one? And, as a trader, should you use this platform? Is the platform safe and legit? Let’s have an in-depth review of FTX.
What is FTX?
FTX is a crypto derivatives platform founded in 2018 and launched its services in May-2019. It was originally incubated by Alamanda Research, a global liquidity provider to crypto exchanges.
In its website, it mentions that FTX is built by traders for traders and strives to build a powerful platform for professional institutional firms.
Yes, it is true. The co-founder and CEO Sam Bankman-Fried was once a trader at Jane Street Capital’s international ETF desk. Another co-founder and CTO Gary Wang is an ex-Google executive.
FTX is one of the most well-funded crypto exchange platforms, successfully raising $8 million in various funding rounds. The funding rounds were participated by Binance, FBG Capital, Greylock Partners, Kinetic, One Block Capital, and many others.
Leverage offerings, Supported Coins, & Contracts
The FTX features a large number of derivatives trading products in different categories including futures, options, spot, index futures, commodities, and MOVE contracts.
MOVE contracts are a version of futures, which expires to the amount of underline that has moved. It lets users trade on bitcoin contracts without having to know the direction of price.
It supports all the major cryptocurrencies including BTC, ETH, BNB, LINK, FTT, BCH, USDT, XRP, etc.
It offers perpetual swaps in over 30 major cryptocurrencies, spot trading in 28 tokens, leveraged trading in 45 tokens, 12 index futures, 9 MOVE contracts, 4 bitcoin volatility token, BTC option contract, and fiat contract.
FTX offers up to 101X leverage but by default, the maximum leverage is set at 10X on all accounts as a risk management practice.
FTX is also known for its unique product offering like prediction contracts, which allows placing bids on candidates of the upcoming US presidential election
FTX offers all the standard as well as advanced order types to its users. The different order types include market, limit, stop market, stop limit, take-profit, take-profit limit, and trailing stop.
It also offers three order life options viz immediate-or-cancel order, post, and reduce only orders.
Platform Trading Fees
FTX has a tiered-fee structure for the spot as well as the futures market. It follows a maker fee-taker fee pricing model and the rates are dependent on the last 30-day trading volume. It starts with a maker fee of 0.02% and a taker fee of 0.07%. The trading fees decrease with an increase in trading volume. For users falling in the last category, i.e, with more than $35 million in trading volume, he/she pays a maker fee of 0.01% and a taker fee of 0.04%.
FTX token holder (FTT) gets a discount of up to 60% on trading fees plus other privileges.
Regarding funding options, it processes both fiat and crypto deposits. It supports fiat deposits in USD, EUR, GBP, AUD, CAD, CHF, HKD, SGD, and ZAR. While crypto deposits include, BTC, ETH, BCH, BNB, LTC, FTT, BTMX, BiLira, and USD stablecoins.
There are no limits and fees on both fiat and crypto deposits.
FTX has a very robust trading platform and is very different from other crypto exchange platforms. First-time users will find it complicated at first sight and it takes a little bit of time to get familiarized with the processes.
The platforms list all the coins available for trading in the ticker slide present on the top of the website. Now, if you want to trade in BTC perpetual, go to the BTC symbol present in the ticker slide and select BTC-PERP from the list of contracts available under the coin.
Upon selecting, the platform gets updated with the relevant data and chart, where you can analyze and place your trade orders. The trading interface includes only four widgets viz charts, order book, order form, and recent trades.
TA tools and charts
FTX offers charting solution from tradingview.com, a leading charting solution provider. It offers all the major and advanced technical indicators required for advanced technical analysis. You can use multiple technical indicators at once for more comprehensive price analysis.
You can fully customizable your charting screen and adjust according to your preferences.
FTX has a pretty simple and easy to understand order book that allows you to make an informed decision. One of the unique features it offers is, you can group the order in nine different multiples. For example, you can see the price of an asset can be set nearest to 1, 2.5, 5, 10, 25, 50, 100, 250, and 500 multiples.
How To Start Trading On FTX
FTX requires KYC verification of its individual users and has three different tiers of KYC verification which provides different capabilities. The following are the different KYC verification levels.
Level 0: It requires only email verification, but it allows only $1,000 as a lifetime withdrawal limit.
Level 1: It requires your email, identity, and country of residence verification. It will give you a daily withdrawal limit of $2000 and $9000 if daily higher trade than transfer value.
Level 2: It requires your full KYC verification including the source of income, passport, and picture of you holding your ID and a handwritten note with today’s date and FTX. It will give you unlimited withdrawal capability.
Level 3: Apart from all the documents required in level 2, you need to provide recent address proof and bank statements. It will give you unlimited crypto withdrawals and unlimited OTC fiat wire transfers.
Now, coming to the registration process, it’s very quick and easy. Click on the “register” button on the top right corner of the website.
Enter your email id and password to create an account. After successful registration, it will ask you to set up your 2FA for account security.
Go to the profile page and under “Two-factor authentication”, click on Authy/Google Authenticator or SMS to set up your 2FA. Simultaneously, you can also complete the Level 1 KYC verification.
Also, under Margin, select the leverage level as per your preference from the given options (1X, 3X, 5X, 10X, 20X, 50X, 100X, 101X).
The profile page allows you to manage your account settings. Now, Your account creation process is complete.
Click on the “Wallet” option present in the menu bar to deposit your funds. Select the crypto coin you want to deposit and proceed accordingly.
Once you have deposited the funds successfully, click on “Market” to start your trading journey.
Customer Support & Assets Security
FTX offers extensive customer support to its account holders. It provides assistance through live chat, email support, FTX Telegram communities, and different social media platforms. It offers assistance in over 10 different languages.
It also has a detailed knowledge base, explaining different features of the platform and how to operate.
Now, speaking of the platform and asset security, it has a pretty robust risk management system in place. FTX team uses SSL encryption to secure its website traffic, 2FA for account security and follows other risk management processes.
It uses a unique liquidation engine and backstop liquidity provider system to handle margin calls and limit clawbacks. Apart from this, it sends warnings to close any positions if maintenance margins fall below 4.5%.
An insurance fund in place to cover for any loss arising due to sudden market movement or market manipulation. Also, it discourages users to make high leveraged trades by imposing higher trading fees on high leverage trades.
FTX secures backing from some of the leading names in the crypto market segment and all their deposits and withdrawals are subject to third-party audits from blockchain analysis firm Chainalysis.
Conclusion: Is FTX Safe & Legit?
FTX is a fully legit and safe crypto derivatives exchange platform and is more suitable for serious traders who want to profit immensely from the crypto revolution. With several industry-first crypto derivatives products, it has not only expanded the market but established its unique identity in the market. However, the platform may look a bit complicated at first look but is very easy to understand and manage it.
Let’s have a look at the pros and cons of FTX:
- Fiat support
- Competitive trading fee
- High leverage and can adjust the default leverage level
- Wide range of trading assets
- Deep liquidity level
- Robust and reliable trading platform
- Strong risk management processes in place
- Suitable for retail and institutional class traders
- No deposit/withdrawal fees
- Good customer support
- No anonymity/ KYC verification required
- Not suitable for beginners
- Few complex trading assets
- A relatively new exchange platform
FTX provides institutional-grade services and is suitable for high-frequency traders. In short, FTX is a very solid platform and gives you a rich trading experience in the evolving crypto margin trading segment.
If you want to share your views, do write it in the comment box below.