Incubated by Alameda Research, a quantitative trading firm that trades up to $1 billion per day and manages over $100 million in digital assets, FTX was developed by an experienced team of traders from traditional financial institutions like Jane Street, Susquehanna, and Optiver. FTX’s motto is “by traders, for traders.”
FTX provides traders and investment professionals with a futures trading exchange for digital assets. Its easy-to-use platform offers futures trading, leveraged tokens, and an over-the-counter (OTC) portal.
The round was led by Proof of Capital, a blockchain-focused fund launched by HTC’s chief decentralized officer Phil Chen; Greylock Capital’s Chris McCann; and 500 Startups partner Edith Yeung. Other investors include Consensus Lab, FBG, and Galois Capital.
“I’m personally very passionate about trading, so FTX is a platform built by traders, for traders,” said Sam Bankman-Fried, CEO of FTX, in a statement. “In creating FTX, I wanted to build a platform for professional traders like me, while also bringing crypto trading to the mass market and first-time users.”
FTX was founded by a diverse team of Wall Street and Silicon Valley alumni. Bankman-Fried was previously a trader on Jane Street Capital’s international exchange-traded fund (ETF) desk, where he traded a variety of ETFs, futures, currencies, and equities and helped design the firm’s automated OTC trading system.
FTX’s founding members, including chief technology officer Gary Wang and chief operating officer Andy Croghan, bring decades of combined experience from leading organizations such as Optiver, Susquehanna, Google, and Facebook.
“I am thrilled to partner with Sam and his team. His love for trading really shows in their product and Proof of Capital is honored to help the company go to market in Asia,” said McCann, in a statement.
FTX supports quarterly and perpetual futures on major cryptocurrencies and altcoins like Bitcoin (BTC), Ether (ETH), Binance Coin (BNB), and Tether (USDT), along with various altcoin, midcap, and other indices. In addition to the futures market, investors can also use the FTX platform to make OTC trades on over 20 coins with no fees and instant settlement.
The platform’s proprietary technology and trading features make it one of the most liquid cryptocurrency exchanges in the market. For example, FTX’s liquidation engine prevents clawbacks by slowly closing overleveraged positions while minimizing market impact.
The platform’s backstop liquidity provider system also prevents accounts from going below bankruptcy level by automating liquidating and closing down at-risk accounts. FTX’s leveraged tokens, on the other hand, provide a way for traders to get up to three times leverage without having to manage margin or risk getting liquidated.
Leading up to the capital raise, FTX recently crossed $300 million in total trading volume and launched several new features and products, including spot orders, leaderboards, altcoin index futures, and more. The exchange also issued its native utility token, FTT, which provides holders with a number of unique benefits, such as one-third revenue buy and burn, lower trading fees, OTC rebates, and collateral for futures trading.