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A timeline of FTX’s collapse
FTX, once among the world’s largest cryptocurrency exchanges, said this week that nearly all of its customers will receive back money they are owed, two years after its monumental collapse.
FTX said in a court filing late Tuesday that it owes about $11.2 billion to its creditors. The exchange estimates it has between $14.5 billion and $16.3 billion to distribute to them.
Here’s a timeline of what led to this week’s announcement after an implosion at FTX kicked off what many expected to become a “crypto winter.”
2022
November 2: Coindesk reports that Alameda Reseach, Bankman-Fried’s cryptocurrency trading firm, holds a large amount of FTT, a token issued by FTX, suggesting the two’s finances are intertwined and Alameda is facing a crisis liquid assets. The report scares cryptocurrency market participants.
November 6: Rival cryptocurrency exchange Binance announces that the company plans to sell all of its holdings in FTT. The price of FTT tanks.
Nov. 8: Binance founder and CEO Changpeng Zhao said his company signed a letter of intent to buy FTX because the smaller exchange was experiencing a “significant liquidity crisis.” Such a deal, however, would depend on a look at FTX’s books. The price of bitcoin drops by 13%.
November 9: Cryptocurrency prices collapse and after taking a closer look at FTX’s finances, Binance backed down and said there would be no acquisitions. “Originally, our hope was that we could support FTX customers by providing liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement. Bitcoin prices drop another 14%.
November 10: Cryptocurrency lender BlockFi announced that it is “unable to do business as usual” and suspended customer withdrawals following the implosion of FTX.
November 11: FTX files for Chapter 11 and Bankman-Fried resigns. John Ray III, a longtime bankruptcy lawyer best known for cleaning up the mess created after Enron’s collapse, is named the new CEO.
In its bankruptcy filing, FTX listed more than 130 affiliates worldwide. The company has valued its assets at between $10 billion and $50 billion, with a similar estimate for its liabilities. Bitcoin drops 10%.
Nov. 17: Ray provides a damning description of FTX’s operations under Bankman-Fried, from the lack of security controls to the company funds used to buy employees’ homes and luxury goods.
November 30: As part of a media blitz, Bankman-Fried tells The New York Time’s Andrew Ross-Sorkin, “Look, I made a mistake” and did not knowingly misuse client funds.
December 12: Bankman-Fried is arrested in the Bahamas, where FTX is based.
Dec. 13: The U.S. government charges Bankman-Fried with a series of financial crimes, alleging he intentionally deceived clients and investors to enrich himself and others while playing a central role in the company’s multibillion-dollar collapse.
Federal prosecutors said Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors starting the year it was founded. He illegally diverted their money to cover expenses, debts and risky trades at Alameda Research, and to make lavish real estate purchases and large political donations, prosecutors said in a 13-page indictment.
Dec. 22: Bankman-Fried’s parents agreed to sign a $250 million bond and keep him in their California home while he awaits trial.
2023
Aug. 11: The judge revoked Bankman-Fried’s bail and sent him to prison after concluding that he had repeatedly tried to influence witnesses against him.
October 3: Jury selection for the trial began.
October 27: Bankman-Fried took the stand in the trial. He again acknowledged the failures but denied defrauding anyone.
November 3: Bankman-Fried is convicted of fraud for stealing at least $10 billion from clients and investors.
2024
March 28: Bankman-Fried is sentenced to 25 years in prison. Bitcoin has recovered from the massive sell-off that occurred during the scandal. Prices have increased by almost 70%.
April 30: Changpeng Zhao, the founder of Binance, is sentenced to four months in prison for looking the other way as criminals used the platform to move money linked to child sexual abuse, drug trafficking and terrorism.
May 8: FTX says nearly all of its customers will get back the money they are owed, two years after the cryptocurrency exchange imploded, and some will get more.