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Table of Contents

FTX US Derivatives (Formerly LedgerX)

On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the U.S., and its CEO Sam Bankman-Fried stepped down as CEO.

What Was FTX US Derivatives (Formerly LedgerX)?

FTX US Derivatives (formerly LedgerX) was a digital currency futures and options exchange and clearinghouse. It was regulated by the Commodity Futures Trading Commission (CFTC).

The exchange offered physical settlements of all contracts, block trading, and algorithmic trading opportunities for institutional investors. It also allowed direct access for all traders.

Key Takeaways

  • FTX US Derivatives (formerly LedgerX) was a regulated platform for trading Bitcoin and Ether derivatives such as futures, options, and swaps.
  • FTX US Derivatives (formerly LedgerX) acted as a clearinghouse for institutional investors who negotiate cryptocurrency block trades directly with one another.
  • In November 2022, FTX filed for bankruptcy and its founder Sam Bankman-Fried stepped downs as CEO.

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.

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 allowed 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 offered contracts for the current and following month and two quarterly settlements.

Swaps

The swap contracts from FTX US Derivatives gave investors an inexpensive way to buy or sell cryptocurrency. Swap contracts are priced at $0.05 eachAll futures and swap contracts were fully collateralized. A service for institutional investors allowed 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.

Who is the CEO of FTX?

John J. Ray III, who led the restructuring 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 a class-action lawsuit on 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.

Article Sources
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  1. LedgerX. "About Us."

  2. FTX US Derivatives. "FAQ: Ledgerx Is Now FTX US Derivatives."

  3. Commodity Futures Trading Commission. "CFTC Approves LedgerX, LLC to Clear Fully-Collateralized Futures and Options on Futures."

  4. LedgerX. "Futures."

  5. LedgerX. "Swaps."

  6. LedgerX. "Institutional."

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