🏛️ Anatomy of an Empire: How FTX Collapsed in 10 Days
A detailed timeline of how the third-largest crypto exchange went from $32B valuation to bankruptcy in less than two weeks.
From $32B to Zero: The FTX Timeline
FTX was the future. Sam Bankman-Fried was on magazine covers, meeting world leaders, and donating millions to politicians. Then it all unraveled in 10 days.
The Players
- Sam Bankman-Fried (SBF) - Founder, CEO, now serving 25 years
- Caroline Ellison - CEO of Alameda Research, cooperating witness
- Gary Wang - Co-founder, cooperating witness
- CZ (Changpeng Zhao) - Binance CEO, lit the match
The Timeline
November 2, 2022 - The Leak CoinDesk publishes explosive report: Alameda Research's balance sheet is mostly FTT tokens (FTX's own token). The empire is circular.
November 6, 2022 - CZ Pulls the Trigger Binance CEO announces Binance will liquidate all FTT holdings (~$500M). Panic begins.
November 7, 2022 - The Bank Run $6B in withdrawal requests in 72 hours. FTX doesn't have the funds.
November 8, 2022 - The Bailout Mirage Binance announces potential acquisition. FTX celebrates. Hope lasts 24 hours.
November 9, 2022 - The Collapse Binance walks away after seeing the books. FTX halts withdrawals. Users are trapped.
November 10, 2022 - The Hack $400M mysteriously drained from FTX wallets. Was it an inside job?
November 11, 2022 - Bankruptcy FTX files Chapter 11. SBF resigns. $8B in customer funds missing.
Where Did the Money Go?
- $8B in customer funds transferred to Alameda Research
- Used for trading, investments, loans to executives
- $40M Bahamas penthouse
- Private jets
- Political donations
The Lessons
- Proof of Reserves should be standard - Exchanges must prove solvency
- Separation of trading and custody - Alameda had backdoor access
- Regulatory theater isn't regulation - FTX lobbied for rules it didn't follow
- Celebrity endorsements mean nothing - Tom Brady, Larry David, and Gisele all promoted FTX
- Not your keys, not your coins - Self-custody is the only custody
The Aftermath
- SBF: 25 years in federal prison
- Caroline Ellison: Cooperating, reduced sentence
- Gary Wang: Cooperating, no prison
- Users: Still fighting for funds back
- Crypto: Trust shattered, regulation incoming
Never forget: If you don't control the keys, you don't control the crypto.
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