FTX, a two-year-old crypto exchange, has raised $900 million in a new funding round. With this round, the company reaches a valuation of $18 billion, making it the largest private equity fundraising in crypto history.
FTX was only worth $1.2 billion 12 months ago. It is now one of the world’s top crypto companies. With this new valuation, the market is much more likely to accept it mainstream, especially in the United States.
The funding round attracted more than 60 investors. There were several investors, including Japanese multinational holding company SoftBank Group Corp. and other venture capital firms based in the U.S., including Thoma Bravo, Daniel Loeb’s Third Point, and British hedge fund manager Alan Howard.
In addition to Israel Englander, Coinbase Ventures and other hedge-fund billionaires participated in the round.
What is the FTX exchange?
The FTX exchange was founded by a group of successful crypto traders in 2019, with the goal of providing more trading options and better security to fellow traders.
The platform initially specialised in crypto futures markets, where traders can create a contract, stipulating that they will buy or sell a certain amount of an asset, at a certain time in the future.
Once the predetermined market conditions come to pass, the buyer and seller are obliged by smart contracts to fulfill their part of the deal. This is a popular type of trade for those who wish to speculate on the price movement of an asset, without having to hold the asset itself.
Now, an even-more popular futures vehicle on the FTX exchange is the perpetual futures market, the main difference being that the trade is settled in the asset itself, for example Bitcoin. One advantage of this is that traders need never sell their BTC, but can continue to accumulate more and more of the scarce cryptocurrency with every successful trade.
Advantages of Using FTX over other Exchanges?
Another advantage is that users can trade with higher leverage, meaning that the potential profits are higher, but also potentially magnifying the losses.
FTX currently offers over 150 perpetual futures markets, with the most popular ones being ETH-PERP, BTC-PERP and DOGE-PERP.
One of the main advantages of using FTX is its low fee structure. They have a tiered fee structure starting at tier 1. It has a trading fee of 0.02% for makers and 0.07% for takers. The average industry trading fee is about 0.02%.
Therefore, we can see that FTX offers substantially low trading fees as compared to their competitors. Moreover, this trading fee can be reduced further depending on the volume of trade by the user. The highest tier has offered the lowest fee, i.e., 0.01% for makers and 0.04% for takers.
Do I need KYC verification to trade on FTX?
You need to pass KYC to access all the features of the FTX platform. If users want to withdraw more than $1,000 per day, then they will be required to verify themselves by the KYC protocol.
To do this, users can go to the identity verification page. They will have to provide some standard documents to make their account verified. They will be required to give proof of their address, an identification document that is legally recognized, and their own picture with the date and FTX written on it.