Sam Bankman-Fried's FTX Exchange Collapses, $8 Billion in Customer Funds Missing; SBF Arrested and Sentenced to 25 Years
Incident Details
Summary
On November 11, 2022, FTX — the world's second-largest cryptocurrency exchange with up to 9.7 million customers — filed for bankruptcy after an extraordinary crisis of confidence. FTX founder Sam Bankman-Fried (SBF) had secretly commingled billions of dollars in customer deposits with his affiliated hedge fund Alameda Research, which used the funds for investments, political donations, and personal expenditures. When FTX's insolvency was exposed by a CoinDesk report and Binance announced plans to liquidate its FTT holdings, a bank run began. Over $5 billion was withdrawn in a single day. FTX could not cover withdrawals, stranding an estimated $8 billion in customer funds. SBF was arrested in December 2022, extradited to the U.S., convicted of seven counts of fraud and conspiracy, and sentenced to 25 years in federal prison in March 2024. FTX's collapse became the defining fraud case of the 2022 crypto winter.
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