A Timeline of FTX’s Collapse

The primary twelve days of November have been maybe the darkest for 30-year-old Sam Bankman-Fried (SBF), as he not solely misplaced his crypto empire however went from being a Bitcoin billionaire and crypto’s white knight to submitting for chapter and owing prospects at the very least $3 billion.

The subsequent eight days revealed that SBF’s once-powerful crypto change FTX was not what everybody believed it to be.

Right here’s the timeline of the occasions that led to the autumn of FTX within the final 20 days.

The Starting of the Finish

Nov 2: Troubles began for the exec and his empire after crypto media CoinDesk published a controversial report highlighting vital particulars within the stability sheet of SBF’s buying and selling agency Alameda Analysis. The article revealed that Alameda is closely invested in FTX’s change’s native token, FTT.

The report raised issues as FTX and Alameda operated as separate entities although SBF created each companies. 

The Battle of Two Crypto Giants 

Nov 6: Alameda Analysis CEO Caroline Ellison dismissed issues in regards to the agency’s stability sheet as rumors. In line with her, the Coindesk report solely coated a subset of Alameda’s stability sheet. She famous that the buying and selling agency had greater than $10 billion of belongings that didn’t mirror within the report.

A few hours later, FTX’s main rival Binance introduced it deliberate to liquidate all of its remaining FTT holdings, which the corporate had acquired as a part of its 2021 investments in FTX. 

Binance CEO Changpeng Zhao (CZ) mentioned the choice stemmed from “latest revelations which have come to mild” about FTX. He later tweeted that his firm wouldn’t help “individuals who foyer towards different trade gamers behind their backs,” with out straight naming FTX. Nonetheless, speculators consider CZ was referring to FTX’s shut ties with regulators and a few of SBF’s controversial tweets. 

Ellison shortly provided to purchase again Binance’s FTT holdings for $22 per token to scale back the affect of the liquidation available on the market. CZ would later reject the supply, saying his agency prefers to remain within the free market.

Zhao additionally confirmed the switch of $584 million value of FTT from an unknown pockets to Binance as a part of the liquidation course of. 

SBF: FTX is Fantastic, Property Are Fantastic

Nov 7: FTX’s Sam Bankman-Fried continued throwing shades at CZ and Binance on Twitter after he beforehand known as for peace and requested that CZ and others ought to “make love (and blockchain), not battle.”

He reassured prospects that FTX and belongings on the change have been fantastic, including that his firm had greater than $1 billion in extra money. However the subsequent few days would reveal that nothing was ever fantastic with FTX, at the very least not customers’ deposits and buyers’ cash. 

With out mentioning Binance, SBF mentioned in a now-deleted tweet {that a} competitor was going after his firm with “false rumors.”

Later that day, Zhao rejected Ellison’s supply to purchase again Binance FTT holdings, and the token’s value plunged 80% as buyers started to promote their very own. 

FTX Halts Withdrawals, Binance Affords Bailout

Nov 8: Lower than 24 hours after SBF tweeted that belongings have been fantastic, experiences confirmed that his change had stopped processing customers’ withdrawals. That was the primary seen signal of FTX’s predicament because the fiasco began on Nov 2. 

A few hours later, FTX noticed a ray of hope as Binance got here to the rescue. CZ tweeted that his change had signed a nonbinding settlement to buy FTX after SBF requested for assist. 

The crypto market reacted positively to the information, however little did everybody know that the love wouldn’t final and the high-profile bailout would by no means occur.

Binance Makes U-Flip, Contagion Units In

Nov 9: Whereas many individuals have been anticipating CZ’s subsequent massive announcement to be the completion of the takeover, Binance made a u-turn and walked away from the deal. Zhao mentioned his firm realized FTX’s monetary bother was past its “management or means to assist” after conducting “company due diligence.”

Information about Binance’s determination to again out of its FTX rescue mission despatched the whole crypto market into chaos. FTT crashed additional, bitcoin dropped beneath $16,000 for the primary time since 2020, and SBF noticed 95% of its web value evaporate, shedding his billionaire standing. 

Just a few hours later, the crypto trade began seeing the chain response from FTX’s liquidity crunch. The Solana blockchain took a major hit, contemplating the position of FTX and Alameda within the Solana ecosystem. A number of crypto platforms will later halt withdrawals, citing extreme publicity to FTX. 

In the meantime, FTX’s authorized and compliance staff reportedly resigned from the change earlier than Binance pulled out of the deal.  

SBF Apologizes, Hunts for Buyers

Nov 10: With Binance now not an possibility, SBF needed to search for assist elsewhere, together with reaching out to different rivals and crypto figures equivalent to OKX and Tron’s founder Justin Solar. 

He additionally apologized on crypto Twitter, the place he admitted a number of errors, together with failing to calculate FTX’s liquidity correctly, which led to the corporate’s downfall. 

SBF additionally vowed to make FTX prospects complete, noting that he was doing every thing potential to lift liquidity however couldn’t make guarantees about that. He then revealed that Alameda Analysis would halt buying and selling as a part of an effort to rescue FTX.

Regardless of claiming that FTX US, the American affiliate of FTX, was “100% liquid” and was not “financially impacted” by FTX’s liquidity crunch, the U.S. change later posted on its web site that it might droop buying and selling inside the subsequent few days. 

“Buying and selling could also be halted on FTX US in a couple of days. Please shut down any positions you wish to shut down. Withdrawals are and can stay open,” the web site acknowledged.

Shortly after SBF’s tweets, on-chain knowledge confirmed that FTX had resumed withdrawals after 48 hours of suspending the service. 

SBF Resigns and Information for Chapter

Nov 11: SBF couldn’t discover anybody to rescue his crypto empire, so his final transfer was to resign as FTX CEO after submitting for Chapter 11 chapter safety for FTX, FTX US, Alameda Analysis, and about 130 affiliated corporations. 

Though John J. Ray III changed SBF as CEO, the corporate mentioned the previous chief will stay to “help in an orderly transition.”

Later that day, crypto lending agency BlockFi halted withdrawals, citing uncertainty surrounding FTX’s liquidity disaster. 

Recall that the crypto lender obtained a $250 million revolving credit score facility from FTX in June throughout the first wave of the crypto winter that stemmed from Terra’s crash. 

In July, each events agreed to lift the credit score facility to $400 million, with FTX having the choice to accumulate BlockFi for $240 million sooner or later. 

Nonetheless, FTX’s downfall has left BlockFi excessive and dry, with the lender exploring chapter.

$477M Goes Lacking as Regulators Step In

Nov 12: Lower than 24 hours after FTX filed for chapter, about $500 million value of belongings have been suspiciously withdrawn from the change and accounts belonging to FTX US. Many speculated that hackers exploited the businesses to steal the funds, however experiences later revealed that the Securities Fee of the Bahamas executed large withdrawals. 

Later that day, Bloomberg reported SBF was interviewed by the Bahamas police and securities watchdog as a part of an investigation into FTX for prison misconduct.

FTX Contagion Continues

Nov 13: Reports emerged that the FTX crash additionally affected the corporate’s staff as SBF and his interior circle promoted the crypto empire internally and externally. 

In line with info shared by an worker, FTX staff have been inspired to speculate and obtain their bonus in FTX inventory and FTT tokens. Thus, staff’ funds have been saved on the platform, and when the corporate sunk, they misplaced entry to their investments. 

That very same day, crypto change AAX halted withdrawals however denied any publicity to FTX. The buying and selling platform claimed the suspension was on account of a “third-party companion” present process a system improve. AAX later famous that it’s on the lookout for new funding as a few of its buyers withdrew their capital from the corporate as a result of FTX saga.

Nov 14: Extra crypto companies with publicity to FTX began having liquidity points. Crypto brokerage agency Genesis International Buying and selling paused withdrawals for its lending unit on account of “irregular withdrawal requests,” the corporate introduced Wednesday. 

Shortly after, crypto buying and selling platform Gemini introduced that it might now not course of withdrawals from its Earn program. Gemini and Genesis are enterprise companions within the lending product. 

FTX’s non-crypto companions, together with Visa and NBA groups Golden State Warriors and Miami Warmth, began reducing their ties with the change. 

Nov 15: FTX-acquired Japanese crypto change Liquid International was subsequent in line to pause withdrawals. The platform mentioned the transfer was in compliance with FTX’s Chapter 11 chapter submitting in america. 

Crypto lending platform SALT additionally halted withdrawalс, citing important publicity to FTX. 

Critical Fraud and Mismanagement of Customers’ Funds

Nov 16: FTX’s Bahamas entity, FTX Digital Markets Ltd., filed for Chapter 15 chapter safety in america.

Nov 17: Court docket-appointed liquidators cited severe fraud and mismanagement of customers’ funds within the chapter doc. 

Additional examination of the chapter submitting revealed some stunning particulars about FTX, together with not correctly recording customers’ deposits, approving bills with emojis through disappearing chats, and executives lavishing company funds on private belongings. 

Nov 20: FTX revealed that it owed 50 of its largest collectors over $3 billion, with the 2 prime largest single claims being $226 million and $203 million.

Nov 21: FTX Japan, the Japanese subsidiary of FTX, is reportedly planning to renew withdrawal by year-end.