FTX collapse
A major cryptocurrency exchange that collapsed into bankruptcy in November 2022. Prosecutors described an ~$8 billion shortfall in customer funds; founder Sam Bankman-Fried was convicted on seven counts and sentenced to 25 years.
Also known as: FTX, Sam Bankman-Fried, SBF, Alameda Research, FTT
Summary
FTX was an international cryptocurrency exchange that collapsed into bankruptcy in November 2022. Prosecutors said founder Sam Bankman-Fried misappropriated billions of dollars of FTX customer deposits, with reporting and trial testimony citing an approximately $8 billion shortfall in customer assets. [1][2][3]
What happened
According to the DOJ, customer funds were used to repay loans owed by Bankman-Fried's trading firm, Alameda Research, and for investments, real estate, and political contributions; investors and lenders were given false financial information. [1] The collapse followed reporting on Alameda's balance sheet and a wave of customer withdrawals. [2]
Outcome
In November 2023 Bankman-Fried was convicted on seven counts of fraud and conspiracy; in March 2024 he was sentenced to 25 years in prison and ordered to forfeit $11 billion. [1][2][3]
Bracketed numbers refer to the numbered sources listed below.
People & entities involved
- Sam Bankman-FriedFounder & CEOIndividualsFounder and CEO of the cryptocurrency exchange FTX and trading firm Alameda Research. Convicted in November 2023 on seven fraud and conspiracy counts and sentenced to 25 years in prison.
- Caroline EllisonAlameda Research CEOIndividualsFormer CEO of Alameda Research and the prosecution's star witness against Sam Bankman-Fried. She pleaded guilty to seven counts and was sentenced in September 2024 to two years in prison.
- Gary WangCo-founder & CTO
Sources (3)
See also
- Loci (LOCIcoin)TokensA 2017–2018 ICO for 'LOCIcoin' tied to the InnVenn IP-search platform. The SEC charged Loci and CEO John Wise with fraud for raising $7.6M on false claims about revenue, headcount, and user base; Wise also misused investor funds. Settled with a $7.6M penalty and an officer/director bar.
- Blockchain Terminal (BCT)TokensA 2017–2018 ICO (BCT tokens, ~$30M) for a 'Blockchain Terminal' — a Bloomberg-style crypto trading terminal. The SEC and DOJ said convicted ex-hedge-funder Boaz Manor secretly ran it under a fake identity ('Shaun MacDonald'), using associate Edith Pardo as a front, and lied about the product's adoption.
- Crowd Machine (CMCT)Tokens
This page was last updated on Jun 8, 2026. View revision history.