FTX Collapse: Sam Bankman-Fried Arrested After $8 Billion Customer Funds Missing
Incident Details
Summary
On November 8, 2022, Binance CEO CZ publicly announced Binance would liquidate its FTX token holdings, triggering a bank run on FTX. Within 72 hours, the second-largest crypto exchange filed for Chapter 11 bankruptcy. FTX founder Sam Bankman-Fried (SBF) was arrested in December 2022 in the Bahamas and extradited to the US. Federal prosecutors revealed that SBF had systematically diverted billions of dollars in customer deposits to his hedge fund Alameda Research, using the funds for real estate, political donations, celebrity endorsements, and personal enrichment. Approximately $8 billion in customer funds could not be accounted for. SBF was convicted on 7 counts of fraud and conspiracy in October 2023 and sentenced to 25 years in prison in March 2024. Over 1 million creditors filed claims.
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