Bankruptcy of FTX

[9] Bankman-Fried's net worth, estimated at $16 billion prior to the collapse, was reported as having been wiped out,[10] and several institutional investors of FTX wrote off their investment stakes in the company.

[13] The collapse of FTX has resulted in a ripple effect across cryptocurrency markets, with the price of Bitcoin falling to its lowest level in two years.

[19] Bankman-Fried was the CEO of both companies until he formally stepped down from his position at Alameda in October 2021, promoting traders Caroline Ellison and Sam Trabucco to co-CEOs.

[27] On 12 November 2022, the Wall Street Journal reported that anonymous sources had said that Alameda CEO Caroline Ellison said that she, Bankman-Fried, Gary Wang, and Nishad Singh were aware of that decision.

[36] Bloomberg and TechCrunch reported that any sale by Binance would likely have an outsized impact on FTT's price, given the token's low trading volume.

[41] Zhao announced on Twitter that the company would complete due diligence soon, adding that all crypto exchanges should avoid using tokens as collateral.

[40] Bankman-Fried said that although the firm's assets were worth more than its clients' deposits, it would need funds from outside to meet demand for withdrawals due to a lack of liquidity.

[61] Though Bankman-Fried said that FTX.US customers did not have reason to worry on Twitter on 10 November, employees began attempting to sell assets belonging to the firm on the same day.

[66] Anonymous sources cited by the Wall Street Journal said the funds were used in part to pay back loans Alameda had taken to make investments.

[69] On the same day, a team running the FTX Future Fund, a charitable group bankrolled by Bankman-Fried, announced their collective resignations.

[71] Bankman-Fried resigned as CEO and was replaced by John J. Ray III, a corporate restructuring specialist who previously oversaw the liquidation of Enron.

[84] In January 2024, the U.S. Department of Justice indicted three individuals for running a SIM swap scam operation that allegedly stole “over $400 million in virtual currency” from an unspecified company between November 11-12, 2022.

[93] A decline in the value of Cronos, the token of exchange Crypto.com, triggered fears of the potential for a collapse similar to that of FTX and spurred withdrawals from the platform.

[95] BlockFi, a cryptocurrency lender, filed for Chapter 11 bankruptcy protection on 28 November; the firm had earlier begun preventing withdrawals.

[98] This halt caused Gemini, an exchange owned by the Winklevoss twins, to cease allowing redemptions for clients using a service provided through a partnership with Genesis.

On 9 March 2023 Silvergate Bank announced it would wind down its operations and undergo liquidation, in turn creating a domino effect of chain insolvencies.

[102][103] On 12 March 2023, Signature Bank, which catered to operators such as Binance and Celsius Network, collapsed after being closed by the New York State Department of Financial Services after being designated a systemic risk following a run.

CEO John J. Ray III estimated that "customers and digital asset loan creditors will recover between 118% and 142% of their Petition Date claim values.

[107][27] Anonymous sources cited by Bloomberg said that the office of the United States Attorney for the Southern District of New York had begun an investigation into FTX's collapse as of 14 November.

[108] On 15 November 2022, a class-action lawsuit was filed in Miami against Bankman-Fried and several celebrities, including American football quarterback Tom Brady and comedian Larry David, alleging the company engaged in deceptive practices; they are seeking damages.

[109] The lawsuit also named Gisele Bündchen, Steph Curry, Shaquille O'Neal, Udonis Haslem, David Ortiz, Trevor Lawrence, Shohei Ohtani, Naomi Osaka, and Kevin O'Leary.

[110] On 21 December 2022, both Caroline Ellison (former CEO of Alameda) and Gary Wang (former Chief Technology Officer of FTX) pled guilty to fraud and other charges and were cooperating with federal investigators in criminal case against Sam Bankman-Fried.

In the signed agreements Ellison and Wang agreed to "cooperate fully" and "truthfully and completely disclose all information concerning all matters".

The cryptocurrency exchange company Gemini, owned by Cameron and Tyler Winklevoss, announced that it would be pausing withdrawals on its Earn program, which uses Genesis as a lending partner.

[115] Institutional investors that stand to lose money due to their stakes in FTX include Tiger Global Management, the Ontario Teachers' Pension Plan, SoftBank Group, BlackRock, Lightspeed Venture Partners, Temasek, and Sequoia Capital.

[130] Anthony Scaramucci, founder of SkyBridge Capital, announced the firm was attempting to buy back a 30% stake in the business owned by FTX.

[132] Richard Handler, CEO of American financial firm Jefferies Group, tweeted on 10 November that he had attempted to meet with Bankman-Fried in July and again in September as he perceived he was "in over his head".

[136] Rostin Behnam, the Chairman of the Commodity Futures Trading Commission, called for Congress to grant the organization more power to regulate cryptocurrencies.

Prior to the collapse, Bankman-Fried and other senior leaders of FTX and Alameda were altogether worth approximately $16.5 billion, making them the second-largest group of benefactors to the EA movement after Open Philanthropy and Good Ventures.

[142] On 10 November, the team running the FTX Future Fund, a charitable group bankrolled by Bankman-Fried, announced that they had resigned earlier that day.