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FTX Collapse

Bankruptcies and Collapses

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Cryptocurrency exchange FTX, once valued at 32 billion dollars, collapsed within days in November 2022 after reporting revealed its founder Sam Bankman-Fried had secretly funneled billions of dollars in customer funds to his affiliated trading firm Alameda Research, triggering a bank run and the exchange's bankruptcy filing. Bankman-Fried was convicted of fraud and conspiracy in 2023 and sentenced to 25 years in prison, and the collapse became one of the largest financial frauds in U.S. history and a major setback for the cryptocurrency industry's credibility.

Facts
Event Type
Cryptocurrency collapse 1
Event Year
2022 1
Cross-Tradition Connections

Associated With

Finance, Practice Disciplines

FTX's collapse in November 2022, following revelations that customer funds had been misused, became one of the largest financial frauds in cryptocurrency history and led to its founder's criminal conviction.

Sources
1. Wikipedia, Bankruptcy of FTX
WikipediaLead section, opening paragraph
Quote, Lead section, opening paragraph
The collapse of FTX, caused by a spike in customer withdrawals that exposed an $8 billion hole in FTX's accounts, served as the impetus for its bankruptcy.
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1. Wikipedia, Bankruptcy of FTX
WikipediaAssociated With: FinanceView the Source
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