Leaked documents show the tremendous growth the trading platform FTS has had in 2020-2021. This growth was in both their operating income, which showed the biggest growth, as well as their revenue.

Leaked documents show crazy growth

The leaked documents were for the Financial Year 2020-2021. And that means from April 1 2020 to March 31, 2021, it is an accounting thing.

In the documents, we can see the staggering growth FTX went through. Going from $14M to $272M, or 1842.85%. This increase was to their operating income. Operating income is the profit realized after deducting operating expenses such as wages, depreciation, and cost of goods sold (COGS).

This is one of the most important numbers, if not the most important number, for any company. This is because you can still increase your profitability even if your revenue does not increase. And increasing this number is much harder than increasing your revenue. In general of course.

But FTS also showed a very impressive increase in its revenue as well. Increasing it from $90 million in 2020 to $1.2 billion in 2021. This is also an impressive 1 333.33%.

FTX showed an even bigger increase in its net income, going from $17 million in net income last year to $388 million this year. A massive 2182.35% increase.

Operating Income vs. Net Income: An Overview

• Operating income is revenue less any operating expenses, while net income is operating income less any other non-operating expenses, such as interest and taxes. 
• Operating income includes expenses such as selling, general & administrative expenses (SG&A), and depreciation and amortization.  
• Net income (also called the bottom line) can include additional income like interest income or the sale of assets.

Source: Investopedia, link down below

Is all a dance on roses, or are there dark clouds on the horizon?

Binance CEO Changpeng ‘CZ’ Zhao recently expressed concerns about a phenomenon known as "jitters". This is where an existing trade order gets postponed, to allow the completion of newer trades. This is basically the same thing as when someone cuts in line. Only here you are not very likely to notice and the one cutting in line can stand to make a lot of money from doing so.

It is basically the same thing that was highlighters in the BIS report published earlier this year. But there it was reported with regards to mining. Where miners can choose the order trades to get executed. Thus enabling them to place their own orders in front of large orders. Effectively allowing them to cut in line in a similar way. The difference here is it is the trading platforms that are cutting in line. If you want to read more on the BIS report I have a link to my post about it here:

BIS report highlights alarming problems with mining, it could potentially get banned

While the Binance CEO never singles out FTX in his tweet. He does mention he has talked with some of the bigger traders on Binance and they reportedly have known about the issue.

The Federal Deposit Insurance Corporation, or FDIC issued a press release targeting FTX US and four other websites SmartAssets, FDICCrypto, Cryptonews and Cryptosec. People were quick to assume that it was FTX that CZ was referring to. A link to the FDIC´s press release is down below.

This was simply based on the timeline matching up. But the FDIC letter mentions nothing about any "jitters". But it does, however, mention misleading investors by claiming that investors' money, or crypto, was SIPC-insured. The Securities Investor Protection Corporation (SIPC) is what guarantees that your money is safe if the bank or financial institution goes bankrupt. 

The reality is, sadly, the opposite. In fact, to my knowledge no crypto company is SIPC-insured. Despite what they claim. And FTX is not the only company who have used this claim to "reassure" investors. Or I would argue deceive is a more accurate way to describe their actions.

Do this mean that FTS is, as we say in Sweden, up as the sun and down as a pancake. Or if you will, the next company that joins Celsius and other sh*ty companies who defraud and deceive their users. I guess it is still a bit too early to say. But the writing on the wall is not looking that great if you ask me. There are a bit too many red flags that are popping up for my liking. 

And while you are free to spend and do whatever you want with your crypto and money. I for one will not be putting it anywhere near FTX as things are now.

What is your thought on this whole situation? Are things with FTX looking too good to be true, or are they just that good? And everyone is just jealous and spreading FUD, and all red flags are near coincidence and misunderstandings? Please share your thought on this and any other DEX or CEX-related thoughts in the comment section down below.

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See you on the interwebs!

Picture provided by: https://help.ftx.com/hc/en-us/articles/360036096791-Media-Kit