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FTX.com Alters Settlement Terms of Election Futures Contract 100% PROOF

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.

Sometime on 11/7/2020 FTX suspended trading on their platform for President2020 futures contracts as well as TRUMPWIN and TRUMPLOSE ERC20 tokens citing that Biden had been declared the victor of the US presidential race by media outlets as laid out in the rules so the contracts would then pay out accordingly. However in their original rules they stated that if there was no clear winner by November 5th 2020 the contract would then settle on the 1st of Febuary 2021.

By those rules trading should not currently be terminated. They altered their posts about the token and removed the November 5th guideline and then later added a new November 9th deadline. So anyone who purchased the TRUMPWIN future at great discount (sub 5 cents) between the 5th and today on the unlikely event he remains president got rug pulled.

To add to this injury they offered a new product at a price of 10 cents per token to holders of TRUMPWIN called TrumpFEB which will pay out at $1 if Trump is president on February 1st 2021… Many holders of TrumpWIN converted their TRUMPWIN to TRUMPFEB. One user in their Telegram channel (which I was banned from for posting screenshots of the original rules and questioning moderators) reported that he had 7000 TrumpWin tokens and due to the pegged 10 cent conversion received less than 1000 TrumpFEB tokens in return. Mind you that according to the original rules the current function of TrumpFEB contract/token should simply be that of the TrumpWIN token that the user already held.

Due to outcry from a lot of people they first offered to instead have a 1:1 swap of the TrumpWin to TrumpFeb. I have since heard that they may now just be rolling back the entire decision and keeping trading open until January 31st 2020.

So all is well then, right? They have corrected the error after all. I would perhaps consider letting this not bother me however FTX’s response on Twitter has been to ‘victim blame’ with statements such as:

“1) FTX president2020 contracts: The conditions for expiring them have now been met. However, we understand that some people refused to respect the rules of the contracts which have always been there. As such, here is what we will do:” [Source]

“6) So we have, this once, given in to the trolls. We regret deeply doing this.

In the future, we will not do this. We will never again allow users’ baseless complaints to influence the outcome of prediction market contracts on FTX.” [Source]

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Screen Capture of Above Referenced Tweets

Here’s the link to the archive.web archive of the original post. Note part 5) for the November 5th deadline. This is also pictured just below for you.

Here’s the current iteration: click here

In summation, even though this may not matter at all since the chances of a Trump victory are indeed low they have clearly an knowingly defrauded their users and even attempted to further extract value from them through the terrible conversion rate to the TrumpFEB token. This has not only affected FTX users. Several secondary markets existed for this token i.e. Poloniex.com and C2CX.com and the abrupt and unannounced halting of trading by FTX forced those secondary markets to also cease their trading and affected their users as well. I’d also like to point out that this is a terrible business decision on so many levels. Under the TrumpFEB token regime in the event that Trump remained the president they would have already paid out $1 each to TRUMPLOSE holders and then have to pay again to TrumpFEB holders. The public should be made aware of these attempted blatant improprieties of a platform with such a large user base and who deals in similar products as a main part of their business.

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Original Rules

Special thanks to The Way Back Machine for archiving the original rules. I believe it may have made a great difference in this case

clarkecrypto.com

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