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FTX is Legit. Here’s Why You Should Be Using It

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TL;DR- There are an incredible amount of exchanges out there- and as an investor you should be able to trust your exchange. FTX has had over $1B in funding from VCs, proactively works with the US and other governments, has extremely low trading fees, and uses cold storage and other security features to keep its investors assets safe.

Things frequently can go wrong in crypto, and it’s always nice to have a solid customer support team to help if anything happens. FTX is one of the few exchanges that does this well.


Why use FTX


FTX is unique in that it has been proactive in initiating conversations with regulators/governments across the world. This can’t be said for exchanges like Binance, who have experienced regulatory issues from the start. In the US, FTX has a fully different arm- FTX.US. FTX.US is fully licensed and has decent customer service should anything go wrong with your account or experience.

Why do I think stuff like this is a big deal? Things are relatively quiet now, but governments will eventually have massive incentive to regulate or even try to get rid of cryptocurrency all together. This is because crypto is going to remove government’s power to weaponize finance and interest rates. Not to mention all the legacy finance institutions that crypto is going to disrupt.

Should the cryptopocalypse come, you want to be invested in the most resilient coins and trust the most future-prepared exchanges. As a white male in my 30s, I realize I’m already in the ‘at-risk’ group for falling prey to conspiracy theories. Seriously though- cryptocurrency poses a grave threat to some deeply entrenched institutions. Don’t expect those institutions to go down without a fight. Use coins and exchanges that you trust.

A little about FTX


FTX was founded in May 2019 in Hong Kong by MIT graduates Sam Bankman-Fried and Gary Wang. Given the encroachments on the freedom of enterprise in Hong Kong, the company decided to leave. The company has since relocated its international headquarters to the Bahamas, and is incorporated in Antigua and Barbuda.

Check out FTX’s website. Although FTX’s web and mobile interfaces aren’t quite as sexy as Coinbase and Coinbase’s app, there’s so much more about it that beats Coinbase.

An important distinction to make here is that the US arm of the of FTX is FTX.US.
FTX.US’s HQ is right across the San Fransisco Bay from Coinbase’s headquarters in Berkeley, California. FTX.US has completely separate order books from FTX international.

Impressive backing


FTX has raised over $1 billion dollars in funding from investors and venture capitalists. Sam Bankman-Fried, who used to work on Wall Street prior to founding FTX is worth nearly $9 billion. Bankman-Fried also founded Alameda Research, a top cryptocurrency trading firm. FTX also owns BlockFolio, and nifty app that you can use to track all your cryptos.

FTX has been gaining some clout lately. FTX was the official sponsor of the 2021 World Series of Major League Baseball. The Umps calling pitches behind the plate had the FTX logo on their chest. FTX also owns sponsorship of FTX Arena, home of the giant NBA franchise the Miami Heat. NFL phenom Tom Brady is also one of FTX’s largest shareholders.


FTX is valued at nearly $20 billion dollars. This means you can probably trust FTX with your capital. Here’s a quick comparison of which exchanges have received how much money in investments.

Although Coinbase has raised less private funding, it’s now a publicly traded company and has access to billions in capital.


Why does this matter? When shit goes south- whether it’s extremely high volume or regulatory trouble of technical difficulties, companies with heavier backing and more cash are likely to pull through better.

Can I use FTX in the US?


Yes! You must use FTX.US instead of FTX.com or ‘FTX international’. What are the differences? For those of us who love futures trading, you can only use 10x leverage on FTX vs. up to 101x on FTX international. But believe me- this is a good thing. Leverage gets you wiped out quickly. Crypto is volatile enough as it is! Other than that there are a handful of cryptocurrencies offered on FTX international that are not offered on FTX.US. If you’re on the hunt for some exotic alt coins though, you’d be better off setting up an account on KuCoin and checking out their selection. FTX is a younger exchange (only 2 years old versus Coinbase’s 8 years in the game) and has yet to introduce a more robust coin offering.


Is FTX safe?


About as safe as it gets for a cryptocurrency exchange. For one, FTX uses cold storage solutions for the storage of its investor’s crypto. I would still advocate you use a hardware wallet once you purchase your crypto though, since all you have from an exchange is an “I owe you” when you purchase crypto from them and let them keep custody. FTX also has mandatory two-factor authentication which makes is damn near impossible for someone to hack your account unless they have your phone or personal device in hand.


FTX has super low trading fees


The highest fee you’ll ever pay for a trade on FTX is 0.07%. This is less than 1/7th of Coinbase’s trade fees. If you’re a trader, this can really add up over time. I used to not thing trading fees were too big of a deal when I got into the crypto game, but now looking back I realize that if I had stayed away from Coinbase a lot earlier I’d have enough to book some plane tickets to NYC for New Year’s from here in Colorado. Coinbase’s fees are astronomical. Here’s a quick comparison for some of the other fees you’ll pay around the crypto space:

FTX has lower fees than every other major crypto exchange

FTT Token

There are many different types of cryptocurrencies, but the FTT token is one of my favorite kinds- an exchange token. An exchange token is a cryptocurrency that is most like a stock- it’s essentially like owning a small piece of a crypto exchange. If the exchange does well and grows, the price of the exchange token (FTT in this case) will appreciate. I happen to have a small long position on FTT because I like what the exchange has been doing.

Hold FTT Token to virtually erase any trading fees

Something pretty special about holding the FTT token is that if you hold at least $100 worth you will begin to gain a discount on trading fees. These discounts are small, but can really begin to add up after a while. Check out the discount schedule for the amount of FTT you hold:

Someday we’ll all have that ‘VIP 2’ status when the rest of the world catches up to crypto 🙂

KYC & Account Set Up


For exact instructions on the KYC process, head to the 10 minute mark on this FTX Guide Video by Guy over at the Coin Bureau. In the video he also shares an affiliate link that gets you a discount on trading fees. I have no financial affiliation with Coin Bureau- I haven’t even spoken to them- but I love their content and my goal is to provide you with the best and most informative content there is. You’ll need to have some ID, proof of address, and be ready for a selfie.

Drawbacks to FTX


If you’re in the US and looking to withdraw funds from FTX, there’s a fat $75 fee for doing so. I still haven’t figured out why FTX is doing this- if I were a trading platform and wanted to grow my user base, I wouldn’t have fees as high as a weekly grocery bill. Hopefully this will change with time. Then there’s Know Your Customer. KYC means that FTX will also be issuing you a tax form at the end of the year and allegedly sending that same form to your government’s tax agency if your crypto profits were over $600 (may vary in your locality). FTX also won’t get you access to a lot of the smaller alt coins that could deliver some big gains for you.

Conclusion

As much as I love chasing exotic alt coins that could 100x, I only trade on a handful of exchanges, which I think are reputable. I have accounts on Coinbase, Binance, Kraken, Voyager, Gemini, BlockFi, KuCoin, and Uniswap.
So far I like KuCoin best for leveraged trading and shorts, Coinbase for its mobile UX, and BlockFi for its lending and returns. In the future I plan on Dollar Cost Averaging through FTX because their fees and lending are great.

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The Fear & Greed Index

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