Community Resource - FTX
Thu Aug 17 2023
About
FTX was an international cryptocurrency exchange founded by Sam Bankman-Fried and Gary Wang in 2019. It grew to become one of the biggest cryptocurrency exchange in the world, and at its peak, was valued at USD25b in 2021. The rise of FTX came to a halt when a Nov 2022 CoinDesk report expressed risks of a collapse. Nine days after the report, FTX entered and remains in Chapter 11 bankruptcy proceedings in the US court system.
Key Events
Remedies and Restructuring
- 17 Nov 2023: Larger FTX claims are being offered for as much as 60¢ – 65¢ on the dollar, marking an increase of as much as 30% when compared to about a month ago.
- 1 Aug 2023: A suggested plan by the bankruptcy administrators has been submitted, and it calls for the potential reactivation of FTX.
- 3 Jul 2023: FTX claims portal officially launched, creditors can view the claim and edit the claim.
- 28 Jun 2023: FTX begins discussing with investors about relaunching its international exchange.
- 15 Jun 2023: FTX claims portal launched, will be officially available on Jul 3.
Arrest and Charges
- Nov 2 2023:Sam Bankman-Fried was convicted on all seven counts and faces up to 110 years in prison for defrauding FTX customers out of roughly $8 billion worth of their funds.
- Dec 13 2022: The U.S. Securities and Exchange Commission charges Bankman-Fried for defrauding FTX investors.
- Dec 12 2022: Police arrest Bankman-Fried in the Bahamas, with the US expected to file for his extradition. US authorities decline to comment on potential charges, but the New York Times reports the charges include wire fraud, wire fraud conspiracy, securities.
Collapse
- Nov 30 2022: Bankman-Fried says in an interview at the New York Times Dealbook Summit that “he didn’t ever try to commit fraud”.
- Nov 17 2022: The US House Financial Services Committee says it plans to hold a hearing in December to investigate the collapse of FTX.
- Nov 16 2022: FTX outlines a “severe liquidity crisis” in US bankruptcy filings, which show the group could have more than 1 million creditors.
- Nov 15 2022: Financial regulators in the Bahamas appoint liquidators to run FTX’s unit in the country.
- Nov 13 2022: Bahamas securities regulators launch a probe over the collapse of FTX, which has its base in the Caribbean nation.
- Nov 12 2022: Reuters reports at least $1 billion of customer funds have vanished from FTX. The exchange says it has detected unauthorized transactions. Blockchain analytics firms estimate outflows between $473 million and $659 million in “suspicious circumstances”.
- Nov 11 2022: FTX starts voluntary Chapter 11 proceedings in the US, along with its US unit, crypto trading firm Alameda Research and nearly 130 other affiliates. Bankman-Fried resigns as CEO.
Rescue Attempts
- Nov 10 2022: FTX suspends onboarding of new clients as well as withdrawals until further notice. Bankman-Fried tells staff in a memo that he is scrambling to raise funds, and has discussed raising $1 billion from Justin Sun, founder of the crypto token Tron.
- Nov 9 2022: Binance decides against pursuing a bailout of FTX.
- Nov 8 2022: Unable to withdraw; Binance says it is planning a deal to acquire FTX.
Collapse Speculations
- Nov 7 2022: Bankman-Fried says “FTX is fine. Assets are fine”; Alameda willing to buy FTT from Binance; Binance announced the sale of FTT.
- Nov 6 2022: Alameda clarification; Binance CEO Changpeng Zhao says his firm plans to liquidate its holdings of FTT due to unspecified “recent revelations”.
- Nov 5 2022: Binance CEO Changpeng Zhao releases twitter: Crypto is high risk.
- Nov 3 2022: Market scare, doubt liquidity.
- Nov 2 2022: Crypto news website CoinDesk reports a leaked balance sheet that shows Alameda Research, Bankman-Fried’s crypto trading firm, was heavily dependent on FTX’s native token, FTT.
Pre-Collapse
- Sep 26 2022: FTX wins bid to buy Crypto Lender Voyager Digital’s Assets by approximately $1.4 billion.
- Aug 19 2022: A US bank regulator orders FTX to halt “false and misleading” claims it has made about whether funds at the company are insured by the government.
- Jul 1 2022: FTX signs a deal with an option to buy embattled crypto lender BlockFi for as much as $240 million.
- Jun 4 2022: FTX signs for naming rights for the home arena of basketball’s Miami Heat in a deal reportedly worth $135 million.
- Jan 31 2022: FTX raises $400 million from investors, including SoftBank, at a valuation of $32 billion.
- Jan 27 2022: FTX’s US arm puts its valuation at $8 billion after raising $400 million in its first funding round from investors, including SoftBank Group and Temasek.
- Oct 2021: FTX raises $420 million in a new round of funding valuing the company at $25 billion from investors, including the Ontario Teachers’ Pension Plan Board, Singapore’s Temasek, BlackRock and Sequoia.
- Sep 2021: FTX signs a sponsorship deal with the Mercedes Formula 1 team.
- Jul 2021: FTX concludes a $900 million funding round, which values the company at $18 billion in the fundraising round.
- Aug 2020: FTX acquires Blockfolio, a cryptocurrency portfolio tracking app, for $150 million.
- May 2019: Sam Bankman-Fried and Gary Wang found FTX, the CEO and operator of cryptocurrency exchange and crypto hedge fund.