Rebooting FTX faces cold reality as its technology wasn’t well-regarded
- March 23, 2023
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According to former clients who spoke with CoinDesk, FTX suffered from high latency, API bugs, and coding mishaps.
FTX’s new boss, John J. Ray III, told The Wall Street Journal in January that he was considering rebooting the disgraced cryptocurrency exchange.
Before spectacularly collapsing in November, FTX had been one of the largest players in crypto. As Ray’s job is to maximize the amount of money creditors recover, and as a result, for its former customers, a resurrection was tantalizing.
There have been no public progress since Ray’s ear-catching comments two months ago, according to interviews with people at major trading firms that once did business at FTX.
While the financial woes that ultimately wrecked FTX became clear in late 2022, these interviews with CoinDesk make it clear the technical side of the exchange was weak since its inception, a thorn in Ray’s revival plan. A number of former clients, who spoke with CoinDesk, complained about high latency, bugs in FTX’s application programming interface (API) and coding problems.
According to Max Boonen, the founder of B2C2, one of the most active FTX market makers, FTX was “slow, incomplete, buggy, and coded by people who had never coded before.”
Another speed-sensitive former customer, Abraham Chaibi, co-founder of Dexterity Capital, said round-trip latency on FTX – how long it took for a customer’s trade to appear in the exchange’s order book – was 150 milliseconds typically and 600 to 800 milliseconds during busier periods. Approximately 1,000 milliseconds make up a second.
He noted that Binance’s round-trip latency is about 5 to 10 milliseconds, which is much slower.
If you wanted to know promptly that your order had been filled, you had to repeatedly query the status of your order” every millisecond, Chaibi said.
As market makers such as B2C2 and Dexterity, speed is very important to them. The volume at FTX during its glory days gave them good reason to do business there, regardless. But market makers are a key group of firms an exchange needs to thrive, providing liquidity by purchasing from essentially anyone who wants to sell, and selling to those who want to buy.