On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the U.S., and its CEO Sam Bankman-Fried stepped down as CEO. FTX US Derivatives is one of the few FTX-related properties that were not a part of its bankruptcy proceedings. The company remains operational today.
What Is FTX US Derivatives (Formerly LedgerX)?
FTX US Derivatives (formerly LedgerX) is a digital currency futures and options exchange and clearinghouse. It was regulated by the Commodity Futures Trading Commission (CFTC).
The exchange offers physical settlementsof all contracts, block trading, and algorithmic trading opportunities for institutional investors. It alsoallows direct accessfor all traders.
Key Takeaways
- FTX US Derivatives (formerly LedgerX) is a regulated platform for trading Bitcoin and Ether derivatives such as futures, options, and swaps.
- FTX US Derivatives (formerly LedgerX) acts as a clearinghouse for institutional investors who negotiate cryptocurrency block trades directly with one another.
- In November 2022, FTX filed for bankruptcy, but FTX US Derivatives is one of the few FTX-related properties that were not a part of its bankruptcy proceedings.
Understanding FTX US Derivatives (Formerly LedgerX)
FTX US Derivatives (formerly LedgerX) was the first exchange to offer cryptocurrency contracts in the U.S. Contracts for bitcoin, called mini-contracts, sold in increments of 0.01 BTC; ether contracts are called deci-contracts and sold in increments of 0.10 ETH. These fractional contracts enabled investors to make granular trades and allow for scalability as the markets fluctuate.
FTX US Derivatives was registered with the CFTC as a Designated Contract Market, Derivatives Clearing Organization, and a Swap Execution Facility.
In October 2021, FTX US acquired LedgerX, which changed its name to FTX US Derivatives. FTX US Derivatives offers cryptocurrency futures, options, and swaps—all of which were physically delivered instead of cash-settled.
In November 2022, FTX went bankrupt and its founder Sam Bankman-Fried stepped down as CEO. FTX US Derivatives, however, was not a part of its bankruptcy proceedings.
The CFTC approved LedgerX (now FTX US Derivatives) for futures trading in September 2020.
Futures Trading
Like a regular futures contract, the company's cryptocurrency futures contracts allows investors to buy or sell at a predetermined price and time in the future. Contract sizes depend upon the cryptocurrency and move in $1 increments. FTX US Derivatives offers contracts for the current and following month and two quarterly settlements.
Swaps
The swap contracts from FTX US Derivatives offers investors an inexpensive way to buy or sell cryptocurrency. Swap contracts are priced at $0.05 eachAll futures and swap contracts are fully collateralized. A service for institutional investors allows for the direct negotiation of block trades, with FTX US Derivatives acting as the clearinghouse.
What Happend to FTX?
FTX filed for bankruptcy in November 2022 and its founder Sam Bankman-Fried stepped down as CEO. FTX US Derivatives, a FTX-related property, was not a part of the bankruptcy proceedings and remains operational today.
Who Was the CEO of FTX?
John J. Ray III, who led therestructuring of Enron, became CEO of FTX in November 2022,
Does Sam Bankman-Fried Face a Lawsuit?
In November 2022, FTX founder Sam Bankman-Fried, Tom Brady, and other celebrities were named in aclass-action lawsuiton behalf of FTX token (FTT) purchasers.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author does not own Bitcoin.
Correction—Feb. 8, 2023: This article has been corrected to reflect that FTX US Derivatives is one of the FTX-related properties that were not a part of its bankruptcy proceedings. The company remains operational today.
