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FTX

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Summary

FTX was a major crypto exchange that collapsed in November 2022 after its founder, Sam Bankman-Fried, was caught stealing about $8 billion in customer funds. He was convicted of fraud and sentenced to 25 years in prison. Regulators won a $12.7 billion judgment against FTX and [[alameda|Alameda]]. 130 affiliated entities filed for bankruptcy.

On-Chain Risk Signals

via GoPlus Security
Ethereum0x5032…7AB5as of 4/28/2026
Token Security
90/100VERY LOW
  • Token can be minted
  • Contract is open-source
  • Listed on a DEX
Address Security
100/100VERY LOW

No signals reported.

Machine-generated risk signals from GoPlus Security. Findings are point-in-time snapshots and can change. Reviewed by an editor before publication; re-fetched weekly.

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Company History and Background

FTX was founded in April 2019 by Sam Bankman-Fried (known as SBF) and co-founder Gary Wang, opening for business the following month. Bankman-Fried had previously founded Alameda Research, a cryptocurrency trading firm, in 2017. FTX was initially based in Hong Kong before relocating its headquarters to Nassau, The Bahamas in September 2021, citing a favorable regulatory environment. At its peak, FTX was the third-largest cryptocurrency exchange by trading volume and was valued at $32 billion following a $400 million Series C funding round in January 2022. The exchange raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors, according to the SEC. Notable investors included Sequoia Capital, which invested approximately $213.5 million across two funds, SoftBank, and others. FTX operated both a global platform (FTX.com) and a U.S.-specific subsidiary (FTX US). The exchange also issued its own native exchange token, FTT, which would later become central to its collapse.

Sources

Alameda Research Relationship and Fraud Mechanism

Alameda Research, a cryptocurrency trading and market-making firm also controlled by Bankman-Fried, was the central instrument of the fraud at FTX. According to testimony and regulatory findings, FTX transferred customer assets to accounts controlled by Alameda Research through a backdoor in the exchange's accounting system. This software modification was implemented by co-founder Gary Wang and allowed Alameda to borrow customer funds without triggering margin calls or liquidations on the platform. Caroline Ellison, then CEO of Alameda Research and Bankman-Fried's former romantic partner, testified at trial that Alameda typically held 'a few billion dollar range' of FTX customer funds as a line of credit prior to the liquidity crisis. Prosecutors established that Alameda used these misappropriated funds for high-risk trading, venture capital investments in over 400 companies, luxury real estate purchases in the Bahamas totaling approximately $300 million, and political contributions exceeding $100 million. FTX falsely represented to customers and investors that it employed sophisticated risk controls and that customer assets were segregated and held in custody. The CFTC found that FTX and Alameda violated the Commodity Exchange Act through material misrepresentations, stating the companies falsely promoted the platform as 'the safest and easiest way to buy and sell crypto.'

Sources

The Collapse: November 2022

The collapse of FTX unfolded over a ten-day period beginning November 2, 2022. On that date, CoinDesk published an article by reporter Ian Allison revealing details of Alameda Research's balance sheet, showing that Alameda's largest asset was $3.66 billion in 'unlocked FTT' tokens — the exchange token issued by its sister company FTX — and its third-largest asset was $2.16 billion of 'FTT collateral.' This disclosure alarmed market participants about the circular and potentially illiquid nature of Alameda's balance sheet. On November 6, 2022, Binance CEO Changpeng Zhao announced that Binance would liquidate its approximately $529 million FTT holdings following the CoinDesk revelations. This announcement triggered a flood of customer withdrawal requests. FTX experienced approximately $6 billion in withdrawal requests in the 72 hours before the exchange halted withdrawals on November 8, 2022. A brief and ultimately failed rescue agreement with Binance collapsed after Binance reviewed FTX's books and declined to proceed. On November 11, 2022, FTX, Alameda Research, and over 130 affiliated entities filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. Bankman-Fried resigned as CEO the same day, replaced by John J. Ray III. The bankruptcy filing revealed an $8 billion hole in FTX's accounts. That same evening, unknown actors exploited FTX's wallets in a separate incident, draining approximately $400-477 million in cryptocurrency assets, later attributed by the DOJ to a SIM-swap attack carried out by three individuals who have since been indicted.

Sources

Regulatory and Criminal Charges

On December 13, 2022, the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) simultaneously announced parallel criminal and civil charges against Sam Bankman-Fried, FTX Trading Ltd., and Alameda Research LLC. The DOJ's Southern District of New York indicted Bankman-Fried on eight counts including conspiracies to commit wire fraud, commodities fraud, securities fraud, money laundering, and federal campaign finance violations. The SEC charged Bankman-Fried with violating anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, alleging that he ran FTX as a fraud 'from the start' by diverting customer funds to Alameda while misrepresenting FTX's risk controls to investors. The CFTC charged Bankman-Fried, FTX Trading, and Alameda with fraud and material misrepresentations in connection with the sale of digital commodities, alleging defendants caused losses of over $8 billion in FTX customer deposits. On February 23, 2023, additional criminal charges were filed against Bankman-Fried related to making more than 300 illegal political donations, funded by misappropriated customer money, which were falsely reported under the names of others. On August 8, 2024, the U.S. District Court for the Southern District of New York entered a final judgment ordering FTX and Alameda to pay $12.7 billion in monetary relief to victims — $8.7 billion in restitution and $4 billion in disgorgement — the largest recovery in CFTC history.

Sources

Sam Bankman-Fried: Trial, Conviction, and Sentencing

Sam Bankman-Fried was arrested in the Bahamas on December 12, 2022, and extradited to the United States, where he was released on a $250 million bail. His criminal trial commenced in October 2023 in the U.S. District Court for the Southern District of New York before Judge Lewis Kaplan. After a roughly six-week trial during which former colleagues including Caroline Ellison, Gary Wang, and Nishad Singh testified against him, a jury convicted Bankman-Fried on all seven criminal counts on November 2, 2023. The jury deliberated for less than five hours. The seven counts included two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit money laundering. On March 28, 2024, Judge Kaplan sentenced Bankman-Fried to 25 years in federal prison and three years of supervised release, and ordered him to forfeit $11 billion in illegal proceeds. Prosecutors had requested 40 to 50 years. At sentencing, Judge Kaplan stated that Bankman-Fried 'will be in a position to do something very bad in the future, and it's not a trivial risk' and criticized his lack of remorse. Bankman-Fried filed an appeal on April 11, 2024. Oral arguments in the appeal were heard before the U.S. Court of Appeals for the Second Circuit on November 4, 2025, with a ruling pending as of April 2026.

Sources

Executive Co-Conspirators: Charges and Sentences

Four FTX and Alameda executives were charged alongside Bankman-Fried and cooperated with federal prosecutors. Caroline Ellison, the CEO of Alameda Research and Bankman-Fried's former romantic partner, pleaded guilty in December 2022 to seven counts including conspiracy to commit wire fraud on FTX customers, conspiracy to commit wire fraud on lenders of Alameda Research, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. Ellison was the government's star witness at the SBF trial. On September 24, 2024, she was sentenced to two years in prison and ordered to forfeit $11 billion. Gary Wang, co-founder of FTX and the engineer who implemented the backdoor allowing Alameda to draw on customer funds, pleaded guilty in December 2022 to four counts including conspiracy to commit wire fraud and conspiracy to commit securities fraud. On November 20, 2024, Wang received no prison time, sentenced to time served and three years of supervised release. The judge stated his cooperation deserved 'a world of credit.' Wang was also ordered to forfeit $11 billion. Nishad Singh, former FTX Director of Engineering, pleaded guilty in February 2023 to six federal charges. On October 30, 2024, Singh received no prison time, sentenced to time served and three years of supervised release, also in recognition of his extensive cooperation. Ryan Salame, co-CEO of FTX's Bahamian subsidiary FTX Digital Markets, pleaded guilty in September 2023 to making tens of millions of dollars in unlawful campaign donations and conspiracy to operate an unlicensed money transmitting business. On May 28, 2024, Salame was sentenced to 90 months (seven and a half years) in federal prison — a longer sentence than prosecutors had requested — and ordered to pay more than $6 million in forfeiture and over $5 million in restitution. Salame did not cooperate with the government and did not testify against Bankman-Fried.

Sources

Political Donations and Campaign Finance Violations

Federal authorities charged that Bankman-Fried used tens of millions of dollars of misappropriated customer funds to make illegal political donations to both Democratic and Republican candidates and political organizations. Public records showed Bankman-Fried donated approximately $40 million in the 2022 election cycle alone, making him one of the largest political donors in the United States that cycle. He donated $6 million to the House Majority PAC and had given $5.2 million to the Biden 2020 presidential campaign. Bankman-Fried stated in interviews that he made equivalent dark-money donations to Republican causes but kept them undisclosed. According to the DOJ indictment, Bankman-Fried made more than 300 illegal political donations funded by misappropriated customer money, falsely reporting contributions as if they came from other individuals' names to circumvent campaign finance disclosure requirements. Ryan Salame pleaded guilty to separately orchestrating unlawful political donations on behalf of FTX executives. The total political spending funded by allegedly misappropriated FTX customer money exceeded $100 million according to prosecutors.

Sources

Bankruptcy Proceedings and John J. Ray III

On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. John J. Ray III, who had previously overseen the Enron bankruptcy, was appointed CEO. Ray stated in his initial declaration to the court that in his career involving 'many instances of corporate malfeasance,' he had never seen 'such a complete failure of corporate controls and such a complete absence of trustworthy financial information.' He reported that FTX had been down to its last 105 bitcoins when the bankruptcy rescue team arrived. The bankruptcy estate engaged in a massive asset recovery effort, ultimately recovering between $14.7 billion and $16.5 billion — substantially more than was initially expected. Key asset recoveries included the sale of FTX's stake in AI company Anthropic and its stake in brokerage firm Robinhood. In October 2024, the U.S. Bankruptcy Court for the District of Delaware confirmed FTX's Plan of Reorganization, under which 98% of creditors by number were projected to receive approximately 119% of their allowed claim amounts. Under the plan, distributions began in February 2025. The first distribution of approximately $454 million was paid February 18, 2025, followed by a second distribution of more than $5 billion on May 30, 2025, and a third distribution of $1.6 billion on September 30, 2025. By November 2025, the FTX estate had distributed over $7.1 billion to creditors. A point of controversy is that distributions are calculated based on November 2022 cryptocurrency valuations, not current market prices, meaning creditors who held Bitcoin or other appreciated assets receive dollar amounts reflecting significantly lower historical prices. John J. Ray III and his consulting firm, Owl Hill Advisory LLC, were approved for a total compensation package including a $3 million completion fee and $38 million incentive fee.

Sources

Clawback Litigation

As part of the bankruptcy process, the FTX estate has pursued extensive clawback litigation to recover funds transferred out of FTX in the period before and around the bankruptcy filing. Under U.S. bankruptcy law, the estate has standing to pursue recovery of alleged preferential or fraudulent transfers. In November 2024, two years after the bankruptcy petition date, the estate filed approximately 23 lawsuits targeting a range of recipients. Defendants include Anthony Scaramucci's SkyBridge Capital, which allegedly received $12 million in conference sponsorships and a $10 million venture investment from FTX; Crypto.com; and the lobbying group Fwd.us, which is affiliated with Meta founder Mark Zuckerberg. The estate also settled with Modulo Capital, a firm that had received $475 million from Alameda Research, recovering $404 million in cash plus $56 million in dropped claims. The estate separately reached a $228 million settlement with Bybit, recovering $175 million in digital assets and an additional $53 million in BIT tokens. Legal experts have warned that clawback litigation could extend for years and may target ordinary customers who withdrew funds in the 90 days prior to the November 11, 2022 bankruptcy filing.

Sources

FTX 2.0 Revival Attempt

Following the bankruptcy filing, CEO John J. Ray III explored the possibility of relaunching FTX as a new exchange, internally referred to as 'FTX 2.0.' Beginning in January 2023, when the estate had identified approximately $5.5 billion in liquid assets, discussions with potential investors and strategic partners began. By May 2023, the estate had contacted more than 75 potential bidders and partners. At one point, the estate reported recovering $7.3 billion in assets and plans circulated for a potential relaunch by the second quarter of 2024. However, on January 31, 2024, FTX lawyer Andrew Dietderich informed the bankruptcy court that the relaunch effort had come to a standstill. Ray told the Wall Street Journal that no credible investor was willing to provide meaningful value for the exchange, citing the complexity of restarting a major crypto exchange, obsolete technology infrastructure, and the reputational damage associated with the FTX brand. The creditors' committee agreed that pursuing a relaunch was not worth the expense and complexity. The FTX 2.0 effort was formally abandoned, and the estate proceeded with asset liquidation and distribution to creditors.

Sources

Contagion and Industry Impact

The collapse of FTX triggered a broad contagion event across the cryptocurrency industry. Several firms that had exposure to FTX or Alameda Research were forced to suspend operations or file for bankruptcy. BlockFi, a crypto lending platform that FTX had extended a $400 million credit line to in 2022 (with an option to acquire it for approximately $240 million), suspended operations on November 10, 2022 and subsequently filed for bankruptcy. Genesis Trading, the crypto lending arm of Digital Currency Group, suspended customer redemptions citing 'the sudden failure of FTX.' Voyager Digital, which had been acquired at auction by FTX.US for approximately $1.42 billion in September 2022, saw that acquisition void when FTX filed for bankruptcy; Binance US later acquired Voyager's assets for approximately $1 billion. Numerous venture capital firms, including Sequoia Capital (which wrote down its $213.5 million FTX investment to zero), suffered substantial losses. The price of Bitcoin fell to its lowest level in two years in the aftermath of the collapse. The FTX collapse is widely cited as a catalyst for heightened regulatory scrutiny of the cryptocurrency industry in the United States and internationally.

Sources

November 2022 Hack

On the night of November 11-12, 2022, simultaneous with FTX's bankruptcy filing, unknown attackers drained approximately $400-477 million in cryptocurrency from FTX's wallets. The theft occurred while the exchange's new management team was assessing the situation. On-chain analysts and FTX representatives initially characterized the movement of funds as a possible hack. The DOJ later confirmed the theft was the result of a SIM-swap attack. According to investigators, one suspect used a fraudulent identification document bearing an FTX employee's details to convince AT&T to transfer a mobile phone account to a SIM card controlled by the attackers, enabling them to bypass two-factor authentication and access FTX's cryptocurrency wallets. A federal grand jury subsequently indicted three individuals in connection with the $400 million theft. The hack was a separate criminal event from the underlying FTX fraud, though both arose in the same catastrophic collapse window.

Sources

FTX — $450.00M (2022-11-12)

DeFiLlama recorded a security incident affecting FTX on November 12, 2022, with reported losses of $450.00M on Ethereum, Solana. Classification: Infrastructure. Technique: Private Key Compromised (Unknown Method).

Sources

Timeline

2017-01-01

Sam Bankman-Fried founds Alameda Research, a cryptocurrency trading firm.

Sam Bankman-Fried - Wikipedia

2019-04-01

FTX is founded by Sam Bankman-Fried and Gary Wang, initially headquartered in Hong Kong.

FTX - Wikipedia

2021-07-01

FTX raises $900 million at an $18 billion valuation from over 60 investors including Sequoia Capital and SoftBank.

FTX - Wikipedia

2021-09-01

FTX relocates headquarters from Hong Kong to Nassau, The Bahamas.

FTX - Wikipedia

2022-01-01

FTX raises $400 million in Series C funding at a $32 billion valuation. FTX Ventures, a $2 billion venture fund, is announced.

FTX - Wikipedia

2022-11-02

CoinDesk publishes an article revealing Alameda Research's balance sheet, showing $3.66 billion in FTT tokens as its largest asset.

Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet - CoinDesk

2022-11-06

Binance CEO Changpeng Zhao announces Binance will liquidate its approximately $529 million FTT holdings, triggering a withdrawal panic.

Bankruptcy of FTX - Wikipedia

2022-11-08

FTX halts customer withdrawals after receiving approximately $6 billion in withdrawal requests in 72 hours. A Binance rescue deal is announced then quickly abandoned.

Bankruptcy of FTX - Wikipedia

2022-11-11

FTX, Alameda Research, and over 130 affiliated entities file for Chapter 11 bankruptcy. Sam Bankman-Fried resigns as CEO and is replaced by John J. Ray III.

Bankruptcy of FTX - Wikipedia

2022-11-12

Approximately $400-477 million in cryptocurrency is stolen from FTX wallets in a SIM-swap attack on the night of the bankruptcy filing.

FTX investigating a possible $473 million hack - CNN Business

2022-11-12

FTX — $450.00M (2022-11-12)

defillama.com

2022-12-12

Sam Bankman-Fried is arrested in the Bahamas and extradited to the United States.

Trial of Sam Bankman-Fried - Wikipedia

2022-12-13

DOJ, SEC, and CFTC simultaneously announce parallel criminal and civil charges against Bankman-Fried, FTX, and Alameda.

SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX

2022-12-22

Caroline Ellison and Gary Wang plead guilty to federal charges and agree to cooperate with prosecutors.

FTX's Gary Wang, Alameda's Caroline Ellison plead guilty to federal charges - CNBC

2023-02-28

CFTC files a separate fraud complaint against Nishad Singh. Nishad Singh pleads guilty to six federal counts.

CFTC Charges FTX Co-Owner with Fraud by Misappropriation and Aiding and Abetting Fraud

2023-10-01

Sam Bankman-Fried criminal trial begins in the U.S. District Court for the Southern District of New York.

Trial of Sam Bankman-Fried - Wikipedia

2023-11-02

Sam Bankman-Fried is convicted on all seven criminal counts. Jury deliberated less than five hours.

Sam Bankman-Fried found guilty on all seven criminal fraud counts - CNBC

2024-01-31

FTX 2.0 relaunch effort collapses. FTX lawyer tells bankruptcy court that reboot plans have come to a standstill due to lack of credible investor interest.

The Failure of 'FTX 2.0' - Live Index

2024-03-28

Sam Bankman-Fried is sentenced to 25 years in federal prison and ordered to forfeit $11 billion.

Samuel Bankman-Fried Sentenced To 25 Years In Prison - DOJ SDNY

2024-04-11

Sam Bankman-Fried files notice of appeal of his conviction and sentence.

FTX's Sam Bankman-Fried appeals conviction and 25-year sentence - Al Jazeera

2024-05-28

Ryan Salame sentenced to 90 months (7.5 years) in federal prison for unlawful campaign donations and conspiracy to operate an unlicensed money transmitting business.

Former FTX Executive Ryan Salame Sentenced To 90 Months In Prison - DOJ SDNY

2024-08-08

U.S. District Court enters a final $12.7 billion judgment against FTX and Alameda for the CFTC — the largest recovery in CFTC history.

CFTC Obtains $12.7 Billion Judgment Against FTX and Alameda

2024-09-24

Caroline Ellison sentenced to 2 years in prison and ordered to forfeit $11 billion.

FTX fraudster Caroline Ellison sentenced to 2 years in prison - CNBC

2024-10-01

U.S. Bankruptcy Court confirms FTX's Plan of Reorganization, projecting distributions of approximately 119% of allowed claims for 98% of creditors.

FTX Receives U.S. Bankruptcy Court Confirmation of its Plan of Reorganization - PR Newswire

2024-10-30

Nishad Singh sentenced to time served and 3 years supervised release (no prison time) in recognition of his cooperation with prosecutors.

FTX's Nishad Singh gets no jail time - CNBC

2024-11-09

FTX bankruptcy estate files approximately 23 clawback lawsuits including against Anthony Scaramucci's SkyBridge Capital, Crypto.com, and Fwd.us.

FTX bankruptcy estate sues Anthony Scaramucci, FWD.us, others - TechCrunch

2024-11-20

Gary Wang sentenced to time served and 3 years supervised release (no prison time). Judge says his cooperation deserved 'a world of credit.'

FTX co-founder Gary Wang avoids prison time for role in crypto fraud - CNBC

2025-01-03

FTX's Plan of Reorganization becomes effective. The record date is set for creditor distributions.

FTX Announces Effective Date and Record Date of January 3, 2025 - PR Newswire

2025-02-18

FTX makes its first creditor distribution of approximately $454 million, initially focusing on smaller Convenience Class creditors.

Defunct crypto exchange FTX begins to repay customers - Fortune

2025-05-30

FTX makes its second major creditor distribution of more than $5 billion.

FTX Recovery Trust to Distribute More than $5 Billion to Creditors - PR Newswire

2025-09-30

FTX makes its third major creditor distribution of $1.6 billion. Total distributions exceed $7.1 billion.

Bankrupt Exchange FTX Set to Repay $1.6B to Creditors Starting on Sep 30 - CoinDesk

2025-11-04

U.S. Court of Appeals for the Second Circuit hears oral arguments in Sam Bankman-Fried's appeal. Court appears skeptical of arguments that conviction should be overturned.

FTX founder Sam Bankman-Fried appeal heard in New York - CNBC

Research Gaps

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  • [high]
    no addresses

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  • [med]
    no regulatory

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    single source

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model: claude-code-investigator, defillama-connector

generated: 4/17/2026, 4:23:04 PM

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