FTT Token (FTT)

What is FTX Token (FTT)?

FTX Token (FTT) is a cryptocurrency token created by the FTX derivatives exchange. It is utilised for paying transaction fees, serving as collateral for margin trading, and purchasing products and services on the FTX platform. Despite the exchange's collapse, FTT aimed to provide holders with a share of the exchange’s revenue and to incentivise liquidity on the platform.

What is FTX platform?

Originally, FTX was a leading cryptocurrency derivatives exchange offering futures, options, and leveraged tokens for trading. Founded by Alameda Research, a significant crypto market maker, it was designed to enable traders to speculate on the price movement of crypto assets. The platform's diverse range of financial products included options, derivatives, and leveraged tokens, tailored to assist traders in managing risk.

What Happened to FTX?

The collapse of FTX unfolded rapidly over a 10-day period in November 2022, triggered by a report revealing that Alameda Research's significant holdings were in FTT, the native token of FTX. This disclosure raised concerns about the undisclosed leverage and solvency of FTX and Alameda Research, leading to a crisis of confidence.

Timeline of FTX Collapse

• November 2: Concerns about FTX and Alameda Research's solvency emerged following revelations about their reliance on FTT as a major asset.
• November 6: Binance announced its intention to sell approximately $530 million worth of FTT, precipitating a sharp decline in the token's value and a mass withdrawal of funds by investors, creating a liquidity crisis for FTX.
• November 8: Binance's initial agreement to acquire FTX fell through amid revelations of mishandled customer funds and potential investigations by U.S. agencies.
• November 11: FTX and its subsidiaries filed for bankruptcy, marking a significant event in the cryptocurrency sector.
• November 14: BlockFi paused customer withdrawals due to its exposure to FTX, later filing for bankruptcy on November 28.

Recent statements and developments indicate ongoing efforts to address the aftermath of FTX's collapse, including discussions about potential repayments to customers and speculation about the exchange's future operations​​​​​​.

Who created FTX ?

FTX was established by Sam Bankman-Fried and Gary Wang in May 2019, aiming to offer an advanced trading platform for cryptocurrencies. Despite its innovative approach and rapid growth, the exchange's fall illustrates the volatile and uncertain nature of the crypto market, compounded by issues of transparency and financial management.