FTX
Web3 / crypto history
FTX was a cryptocurrency exchange and derivatives trading platform founded by Sam Bankman-Fried and Gary Wang in 2019 that became one of the cryptocurrency industry's most prominent and well-capitalized companies, valued at $32 billion at its peak. Operating with aggressive marketing, prominent celebrity endorsements, and political donations, FTX offered spot trading, derivatives contracts, and various financial products to millions of users globally. In November 2022, investigative journalism revealed that FTX had secretly transferred billions of customer assets to Alameda Research, a cryptocurrency trading firm also owned by Bankman-Fried, to cover risky trades and personal investments. The subsequent collapse triggered one of the largest corporate bankruptcies in history, with FTX customers losing approximately $8 billion and Bankman-Fried facing criminal charges including wire fraud and conspiracy. Example: On November 8, 2022, Changpeng Zhao announced Binance would sell its FTX holdings, sparking a bank run that exposed FTX's insolvency within 48 hours as customer withdrawals exceeded the exchange's actual assets. Why it matters for crypto history: FTX's collapse demonstrated that even major, well-funded cryptocurrency platforms can mask systematic fraud and misappropriation. It prompted demands for improved exchange custody standards, regulatory oversight, and highlighted the importance of transparent blockchain verification of customer asset backing.
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