Is FTX A Scam? What It Is & Why You Should Care

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Mrcoin

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I. What is FTX?

FTX is a cryptocurrency derivatives exchange launched in April, 2019 by Sam Bankman-Fried and Gary Wang who are currently CEO and CTO respectively that offers futures and leveraged tokens on both individual and baskets of crypto assets, over-the-counter (OTC) trading, and binary options on the outcome of the 2020 American Presidential election.

It is backed by Alameda Research, a trading firm accounting for between $600 million and $1 billion of volume a day or roughly 5% of global volume.

FTX was designed to prevent clawbacks using a three-tiered liquidation model that closes positions with rate-limited orders and leverages an insurance fund to prevent customer losses. Rather than fracturing liquidity across various tokens, collateral is shared in one universal stablecoin wallet to mimic the traditional futures market.

FTX Token also allows traders to take leveraged or short positions without trading on margin or futures with their Leveraged Tokens that mimic the experience of trading on spot markets but allow 3x, -1x or -3x on various tokens. The FTX OTC desk is powered by Alameda and trades around $30 million per day with no fees.​
  • FUTURES: Over 250 perpetual and quarterly futures markets.​
  • SPOT: Over 100 spot markets​
  • LEVERAGED TOKENS: ERC20 assets that can give you leveraged exposure to cryptocurrency markets.​
  • VOLATILITY: Daily, weekly, and quarterly MOVE contracts, plus BVOL/IBVOL volatility tokens.​
  • PREDICTION MARKETS: Markets on the outcome of real-world events.​
  • FIAT: USD, EUR, GBP, AUD; 11 fiat currencies in total.​
  • STAKE: Earn rewards by staking digital assets.​
  • FTX PAY: Receive payments with our fast, secure, and low-fee payment processor.​

II. Cryptocurrencies Available At FTX




More than 300 different cryptocurrencies are available for spot trading on the FTX platform. The following is a selection of the assets that can be purchased on this exchange:​
  • Bitcoin (BTC) (BTC)​
  • Solana (SOL)​
  • Ether (ETH)​
  • Ripple (XRP)​
  • Litecoin (LTC)​
  • Dogecoin (DOGE)​

III. Is FTX exchange safe? FTX Exchange Review Security

Security is always a top concern when dealing with cryptocurrencies, and FTX takes the security of its platform extremely seriously. One of the steps they’ve taken is to provide the FTX wallet for each user to have a secure place for storing their digital assets.

2-Factor authentication is available and highly encouraged. This type of authentication requires a code, which is generated within a third-party app on the user’s device, to be used when accessing trading funds and when making withdrawals.

FTX also has a requirement for minimum password complexity which is a good thing so users cannot simply use “password” as a password, which is just asking for trouble.

FTX have also taken additional steps which allow users to enable 2FA for withdrawals and have added an optional withdrawal password. This is a great second line of defense, if somehow your password to login gets compromised and someone gains access to your account, they will not be able to withdraw any funds without using an additional 2FA and a withdrawal password if these features are enabled.

Users should take full advantage of these additional security features if they want to turn their FTX exchange account into the Fort Knox of safety.

There is also a feature to have a 24-hour lock placed on the account any time there is a 2FA removal or password change. This is also a smart feature to have and will leave bad guys really banging their heads because in the unlikely event they go through all that work and manage to break into your account and remove the need for a withdrawal password or 2FA, now they need to wait 24 hours before they can do anything, and as these shenanigans are going on the user would have been notified of these actions via email so they have 24 hours to go in and secure their account without losing any funds.

Anytime there is suspicious activity on a users’ account such as unusual login attempts, or there is a login attempt without the 2FA, FTX will notify the owner so they can take necessary precautions.

IV. Is FTX Scam?

First of all, we know who the founder of FTX is: Sam Bankman-Fried. In a world of anonymous programmers, transactions, and investors (we still don’t know who invented Bitcoin!) knowing the person behind the project is an important sign of legitimacy.

Second, we’ve spoken about the three levels of users’ verification that FTX applies: FTX applies a lot of bank-like security features to keep users’ funds and information secure. The verification process also prevents malicious or fake accounts from accessing the platform.

Also, if we look at its history, FTX has never reported any hacks or security incidents since its foundation.

FTX has distinguished itself as a crypto-exchange platform by providing fresh and innovative products in various areas, including derivatives and matching currency markets. For all the reasons above, FTX can be considered 100% not a scam.​
 

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