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FTX.US funds: American affiliate not part of Binance rescue deal – are deposits safe?

By Daniela Ešnerová

12:48, 9 November 2022

A smartphone displays the FTX.US logo in front a trading chart
FTX CEO Sam Bankman-Fried has promised investors that FTX.US is operating normally – Photo: ShutterStock

FTX.US, the US arm of the cryptocurrency platform FTX, is unaffected by its parent company’s liquidity crunch and continues to process withdrawal requests.

That was the announcement made by FTX CEO Sam Bankman-Fried, also known as SBF, as he assured investors that FTX.US would not be impacted by the takeover of FTX by rival platform Binance. 

FTX.US is a separate US-regulated cryptocurrency exchange operated by the Bahamas-headquartered FTX for US residents.

FTX token (FTT) to US Dollar

FTX.US not ‘impacted’ promises Bankman-Fried

SBF’s assurance came after FTX found itself in the midst of a liquidity crisis this week as rumours of its insolvency spread and investors rushed to withdraw their funds from the platform. 

XRP/USD

0.53 Price
-1.730% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,137.56 Price
+0.180% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

BCH/USD

476.95 Price
-1.260% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

BTC/USD

63,999.55 Price
-0.230% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

The influx of redemption notices forced FTX to halt withdrawals on Tuesday 8 November. 

Later that day, SBF revealed that his company had agreed on “a strategic transaction” by a rival platform, Binance, to help with “clearing out the withdrawal backlog.” Bankman-Fried added

“This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. We apologise for that.” 

SBF went on to make it clear that FTX.US was not affected. He said: “Note that FTX.US and Binance.US – two separate companies – are not currently impacted by this. FTX.US withdrawals are and have been live, is fully backed 1:1, and operating normally.”

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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