Glossary
FTX Collapse
The November 2022 implosion of FTX — Sam Bankman-Fried's $32B exchange — after revelations that customer funds had been lent to sister hedge fund Alameda Research.
FTX was the third-largest crypto exchange in the world when a CoinDesk article on November 2, 2022, revealed that Alameda Research's balance sheet was concentrated in FTX's own token, FTT. A run on FTX began within days; CZ at Binance announced he was selling his FTT, accelerating the collapse.
By November 11, FTX, Alameda, and ~130 affiliates filed for bankruptcy. Roughly $8 billion of customer funds had been used to backstop Alameda's losses. Sam Bankman-Fried was convicted of fraud in November 2023 and sentenced to 25 years. The collapse reshaped industry self-regulation and accelerated proof-of- reserves adoption.