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I have had no axe to grind with FTX until now. They are supposed to be a futures platform, however, it appears that they are willing to ex-post-facto arbitrarily alter the settlement terms of their futures products. This has bad implications for them and shows a short shortsightedness that somewhat boggles the mind since issuing futures products fundamentally depends on confidence that the institution will make good on the contract based on the original terms of the contract in the future. Here’s what went down.

Prior to the 2020 US elections FTX created the President2020 futures contracts. This featured such products as TRUMP, BIDEN, shortBiden and also some derivatives in the form of ERC20 tokens called TRUMPWIN and TRUMPLOSE which potentially allowed trading outside of FTX. FTX published the rules of how the contract/token’s final value of $1 or $0 would be paid out via their blog. …

Richard L. Clarke

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