FTX

He founded a popular crypto exchange, amassing incredible wealth and political clout in just a few years. In one week, everything collapsed.

NEW YORK (AP) — It took less than a week for FTX to go from the third-largest cryptocurrency exchange in the world to bankruptcy court.

FTX’s bankruptcy is certainly to be one of the most complicated bankruptcy cases in years. However, after Binance took a look at FTX’s books, it concluded that the smaller exchange’s problems were too big to solve and backed out of the deal. The person could not discuss details of the investigations publicly and spoke to The Associated Press on condition of anonymity. On Thursday, a person familiar with the matter said the Department of Justice and the Securities and Exchange Commission were looking into FTX to determine whether any criminal activity or securities offenses were committed. And this latest crisis has put pressure on the prices of bitcoin and other digital currencies. FTX US, which originally was not expected to be included in any financial rescue, was also part of the company’s bankruptcy filing.

Once the white knight of crypto, Sam Bankman-Fried now needs someone to bail him out. Illustration by Gracelynn Wan for Forbes; Photos by Saul Loeb/Getty Images.

At that juncture, FTX thought it had enough [money](https://www.forbes.com/sites/mariagraciasantillanalinares/2022/09/27/ftx-pays-14-billion-to-get-voyagers-crypto-customers/?sh=15fe5c744168) to return most of the assets to Voyager owners in hopes of retaining some of them as clients. If it turns out that FTX used them for its own purposes, including possibly lending them to Alameda, that would lift the clients in the hierarchy of who is owed money during the bankruptcy. Despite Bankman-Fried owning a 7.6% stake in the brokerage after he invested around $650 million in May, Tenev insisted there was no direct or material exposure to FTX, adding that his brokerage has seen crypto inflows increase as a result of the turmoil. “FTX was sort of the white knight in Voyager,” says Gayda. With roughly $6 billion in cash at the end of the latest quarter, Robinhood likely won’t be hurt badly even if Bankman-Fried is forced to unload his stake as part of bankruptcy proceedings. If the FTX customers, who will be treated as unsecured creditors in bankruptcy, want to be proactive, they can do more than wait to be rescued. Over 63% of the assets are stablecoins, including tether and dai, which are meant to be fully collateralized with liquid assets and thus shielded from an event like the selloff that has wiped about 20% off of crypto values in the past week. “There’s really a crisis of confidence with respect to customers in the crypto industry,” says Gayda. Investors should “brace themselves for contagion from FTX’s bankruptcy,” Anto Paroian, CEO of crypto hedge fund ARK36, said in emailed comments. Valued at $32 billion in its latest funding round, FTX’s worth has crashed in the span of one week. The main option for FTX customers to recoup at least some of their holdings, says Robert Gayda, partner at Seward & Kissel corporate restructuring and bankruptcy group, is for a “Voyager-style sale” of any remaining crypto assets. Assets still under the company’s control would be put up for sale to the highest bidder.

Cryptocurrency exchange FTX, which filed for bankruptcy Friday, is investigating whether crypto assets were stolen and has moved all its digital assets ...

We'll send you a myFT Daily Digest email rounding up the latest FTX Trading Ltd news every morning. Sam Bankman-Fried's main international FTX exchange held ...

Reuters reports that at least $1 billion worth of customer funds have vanished from the failed crypto exchange.

FTX-affiliated crypto trading firm Alameda Research's Chief Executive Officer Caroline Ellison and senior FTX officials knew that the crypto exchange had ...

FTX is the third crypto company to seek bankruptcy protection this year, following Voyager Digital and Celsius Network. The filing also clouds the fate of ...

More than $500 million appears to be missing from the crypto currency exchange, following a bankruptcy filing Friday.

Several wallets belonging to FTX were rapidly drained before midnight. An FTX Telegram admin called it a hack and warned users not to visit the site.

Ray said FTX and FTX US are making “every effort to secure all assets, wherever located.”

The document, shared with prospective investors before the bankruptcy, provides a detailed picture of the financial hole in the FTX crypto empire and suggests ...