Is FTX Safe? An Honest Review
When it comes to finding a reliable cryptocurrency exchange you can trust, many questions probably come to mind. Is the exchange safe? Is it legit? Can I trust the platform to protect my money?
If you’ve been researching top crypto exchanges, then you may have come across FTX. Founded in 2019, FTX is a Bahamian cryptocurrency exchange that offers a range of assets to trade, including leveraged tokens, futures, options, and spot markets.
But is FTX safe? Yes, you’ll find that the platform is one of the safest on the market. Find out how.
Is FTX Safe? How is FTX Protecting Your Money?
Since its launch in 2019, FTX has maintained a reputation as a safe cryptocurrency exchange, with no history of being hacked or compromised. However, this could be because the exchange is relatively young. But so far, FTX has shown great promise as a secure exchange that customers can trust to store and secure their coins.
Employing a number of security measures to protect users’ information and assets held on the exchange, FTX is an up-and-coming exchange that seems to be doing well to build trust with its clients.
How Is FTX Regulated by Governments?
The company running the FTX platform is registered in Antigua and Barbuda, with its headquarters in Hong Kong. FTX is regulated by the Cyprus Securities and Exchange Commission (CySEC), with license number 273/15.
FTX is currently not regulated in the U.S. A separate exchange, FTX.US is available. However, the exchange has fewer crypto offerings and features. This is because the U.S. heavily regulates cryptocurrency trading. This platform is designed specifically for U.S. based traders.
Has FTX Had Any Security Compromises?
No, since its inception in 2019, FTX hasn’t had a security incident such as cyber attacks. There have been no security compromises that have placed client information or funds stored on the exchange at risk.
Can I Use FTX (FTX US) In the US?
The FTX platform is currently not regulated in the U.S. due to strict regulations. Therefore, U.S. customers aren’t allowed to trade on the platform. As an alternative, residents in the States can use FTX.US, a partner entity servicing U.S. citizens. FTX.US is a regulated company.
FTX also prohibits residents of the following countries:
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Cuba
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Iran
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Afghanistan
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Syria
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North Korea
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Antigua
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Barbuda
FTX Security Rules
FTX has taken various security measures to ensure its clients’ information and assets are safe on the platform.
For example, the exchange is protected with two-factor authentication. So, in order to make any type of transaction, a customer must have two-factor authentication enabled. Customers can also enable two-factor authentication and password protection for cryptocurrency withdrawals.
An extensive multi-factor KYC process adds another layer of security. KYC means Know Your Customer or Know Your Client, and involves identifying and verifying a user’s identity when they attempt to open an account with a crypto exchange like FTX.
This is to limit fraud and identity theft. So, if you fail to prove your identity, you won’t be able to access the platform.
FTX has three different tiers of KYC requirements, which include:
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Unverified: By only providing your email, you’ll just be able to explore the site. You won’t be able to trade, deposit, or withdraw funds.
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Tier 1: By providing your email, full legal name, date of birth, and country of residence, you can make crypto only withdrawals, with a $2,000 limit per day. You can’t make fiat deposits or withdrawals.
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Tier 2: This tier allows you to make unlimited crypto and fiat deposits and withdrawals. But in addition to completing Tier 1 KYC requirements, you also must provide proof of address, description of source assets, passport, ID, and facial verification.
FTX also provides withdrawal lock when the status of a client’s account changes. For example, if you (or a potential hacker) remove two-factor authentication or change your password, FTX will temporarily prevent withdrawals for a total of 24 hours.
Whitelisting wallets is yet another security feature customers can leverage to keep their funds safe. This means that you can prevent a third party—in the event the third party has gained access to your account—from withdrawing funds to an undesired wallet address.
Whitelisting wallets adds an extra layer of security against any illegitimate activity. So, FTX will only allow crypto withdrawals to authorized (whitelisted) wallets.
FTX also tracks and notifies users of any suspicious activity. So, for example, if FTX detects that someone has made an unusual login attempt on your account, they’ll notify you so that you can take the necessary precautions.
You can also benefit from FTX’s use of anti-money laundering (AML) software. This allows the exchange to monitor suspicious crypto transactions in real-time. For example, they’ll be able to detect any large or suspicious deposits and withdrawals, providing you with an extra layer of protection.
Furthermore, FTX provides a backstop liquidity fund. This means that they have a backstop liquidity provider that instantly injects liquidity from other exchanges into FTX in an emergency. By giving FTX a chance to manage a trading position that goes wrong and hedge their books on other venues, this can prevent a dangerous account from going bankrupt.
Other security features FTX offers include:
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Custom-built hot and cold wallet technology
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Complete external backing of all hot wallet funds
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Partnership with industry-leading custodians
FTX Pros and Cons
👍 FTX Pros
👎 FTX Cons
• Relatively new platform in the crypto space
• Not available in the U.S.
Is FTX Good For Beginners?
While FTX isn’t the most easy-to-use crypto trading platform out there it offers a range of features. But the exchange is not specifically targeted at beginner traders.
However, the platform can be suitable for both novice and experienced traders. For example, its relatively low fees can be a nice advantage to beginners just getting started. FTX offers other features that new traders can leverage such as spot trading.
Spot trading involves buying a cryptocurrency at its current price, and then selling it later at its price at that time. This is a more simple than more advanced options like the trading of futures, stocks, and leveraged tokens, which FTX also offers. Trading these products requires a deep understanding of the underlying asset and the market itself.
Summary
Whether you’re a beginner or a more advanced trader, you may be researching different crypto exchanges you can trust to trade and store your coins. With a plethora of security and account protection measures, it’s easy to see why FTX is one of the most trusted crypto platforms out there. And this is even with being in operation for a short period of time.
Plus, the exchange offers various trading features that set it apart from other crypto exchanges on the market, including its own cryptocurrency. These features coupled with tight security, make FTX a crypto exchange that’s worth registering for.
Top 10 FTX Reviews
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Comment
At first, there were login issues (it worked only intermittently), but simply changing my password resolved the problem; there haven't been any glitches since. I chose the FTX exchange because of its reasonable fees, but it turned out to be nothing more than a money-laundering scam. Eventually, the exchange burst like a soap bubble, and I—along with many other users—was left with nothing.
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Comment
Evaluated trading at FTX as negative. It is impossible to place orders normally. I traded with problems. I leaked 600 bucks here and that's it, I decided that I would no longer trade here. And I don't recommend it to others.
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Comment
I left a couple of negative reviews about these comrades, I traded with them for 6 months, at first everything suited me, once I withdrew money to e-wallets normally. They didn't give me anything else...
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Comment
Who does not know who these FTX are, I will tell. If you have not heard, then I will say that this broker is classified as a financial pyramid and not without reason. Lack of registration. Unable to contact the office. Some of them are secretive, I read about them and did not even register on the site.
FAQs
Is FTX for crypto trading trusted?
Yes, FTX is a legitimate cryptocurrency exchange that has many security features. With two-factor authentication, identity verification for certain account features, hot and cold wallet technology, and other security features, FTX offers a safe platform for investors to buy, sell, and store crypto.
What makes FTX futures different from other futures?
The futures on FTX differs from other major cryptocurrency futures in three ways. For example, FTX futures are stablecoin settled. This means as collateral, you can deposit stablecoins for all of the futures. Your profit and loss is settled in stablecoins.
Another key feature that differentiates FTX futures from others is that they have a backstop liquidity provider program. This helps accounts facing bankruptcy avoid clawbacks.
Has FTX been hacked?
Since its founding in 2019, FTX hasn’t been hacked. Therefore, it’s reasonable to conclude that FTX is one of the safest exchanges out there. But unfortunately, no exchange is 100% safe from hacks and other security compromises.
So, one of the best ways to safeguard against potential security issues, you can keep your cryptocurrency offline on a hardware wallet.
Can I open an FTX account if I live in the United States?
No, if you live in the United States, you won’t be able to open an FTX account. This is because the exchange isn’t regulated in the U.S. However, you can use FTX.US, the U.S. equivalent to FTX international. Because the U.S. heavily regulates crypto exchanges, some features may not be available on the platform.
Glossary for novice traders
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Futures contract
A futures contract is a standardized financial agreement between two parties to buy or sell an underlying asset, such as a commodity, currency, or financial instrument, at a predetermined price on a specified future date. Futures contracts are commonly used in financial markets to hedge against price fluctuations, speculate on future price movements, or gain exposure to various assets.
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2
Crypto trading
Crypto trading involves the buying and selling of cryptocurrencies, such as Bitcoin, Ethereum, or other digital assets, with the aim of making a profit from price fluctuations.
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3
Cryptocurrency
Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.
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4
Options trading
Options trading is a financial derivative strategy that involves the buying and selling of options contracts, which give traders the right (but not the obligation) to buy or sell an underlying asset at a specified price, known as the strike price, before or on a predetermined expiration date. There are two main types of options: call options, which allow the holder to buy the underlying asset, and put options, which allow the holder to sell the underlying asset.
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5
Leverage
Forex leverage is a tool enabling traders to control larger positions with a relatively small amount of capital, amplifying potential profits and losses based on the chosen leverage ratio.
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Team that worked on the article
Dwight specializes in risk, corporate finance, alternatives, fintech, general business trends, and financial markets, and he has broad experience managing complex projects. Dwight is an author for the Traders Union website.
Dwight was a financial columnist for The Wall Street Journal and The New York Times during the Great Financial Crisis. He has served as Editor-in-Chief of Worth, a personal finance magazine for the wealthy, and as Editor of Risk, the premiere global publication about derivatives, risk management, and quantitative finance, based in London.
He has also served as Managing Editor at The Economist Group and ran the Americas operations of two British trade publications.
For the last 12 years, Dwight has worked as a freelance writer and editorial project manager, serving clients in the financial technology, banking, broker/dealer, consulting, asset management, and corporate sectors. This has given him considerable experience in idea generation and project management, working collaboratively to help clients meet their goals with little or no supervision.
Ivan is a financial expert and analyst specializing in Forex, crypto, and stock trading. He prefers conservative trading strategies with low and medium risks, as well as medium-term and long-term investments. He has been working with financial markets for 8 years. Ivan prepares text materials for novice traders. He specializes in reviews and assessment of brokers, analyzing their reliability, trading conditions, and features.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
