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FTX

For other uses, see FTX (disambiguation).

FTX Trading Ltd.
Company typePrivate
IndustryCryptocurrency
FoundedMay 2019 (2019-05)
FoundersSam Bankman-Fried
Gary Wang[1]
FateFiled for Chapter 11 bankruptcy in November 2022
Headquarters
Nassau, New Providence
,
The Bahamas
Key people
John J. Ray III (CEO)[2]
Products
RevenueIncrease US$1.02 billion (2021)[3]
Increase US$272 million (2021)[3]
Increase US$388 million (2021)[3]
Number of employees
c. 300 (2022)[4]

FTX Trading Ltd., commonly known as FTX (short for "Futures Exchange"),[5] is a bankrupt company that formerly operated a cryptocurrency exchange and crypto hedge fund.[6][7] The exchange was founded in 2019 by Sam Bankman-Fried and Gary Wang and collapsed in 2022 after massive fraud perpetrated by Bankman-Fried and his partner Caroline Ellison forced the company to file for Chapter 11 bankruptcy.

At its peak in July 2021, the company had over one million users and was the third-largest cryptocurrency exchange by volume.[8][9] As of November 2022, FTX was the third-largest digital currency exchange boasting an active trading volume of USD 10 billion and a valuation of USD 32 billion.[10] FTX is incorporated in Antigua and Barbuda and headquartered in the Bahamas.[11] FTX is closely associated with FTX.US, a separate exchange available to US residents.[12]

Since November 11, 2022, FTX has been in Chapter 11 bankruptcy proceedings in the US court system.[13][14][15][16] Public concern began with rumors of unethical and fraudulent inter-company transfers of client funds. In November 2022 CoinDesk also raised concerns stating that FTX's partner firm Alameda Research held a significant portion of its assets in FTX's native token (FTT).[17][18] Following this revelation, rival exchange Binance's CEO Changpeng Zhao announced that Binance would sell its holdings of the token, which was quickly followed by a spike in customer withdrawals from FTX.[19]

FTX was unable to meet the demand for customer withdrawals.[20] Binance signed a letter of intent to acquire the firm, with due diligence to follow, to ensure that customers could recover their assets from FTX in a timely manner, but Binance withdrew its offer the next day, citing reports of mishandled customer funds and U.S. agency investigations.[21] On December 12, 2022, founder Sam Bankman-Fried was arrested by the Bahamian authorities for financial offences, at the request of the US government.[22] The current CEO of FTX is John J. Ray III, who specializes in recovering funds from failed corporations.

  1. ^ "FTX raises $900M". inside.com. Archived from the original on July 27, 2022. Retrieved July 28, 2021.
  2. ^ "Enron's Liquidator to Oversee FTX's Massive Crypto Bankruptcy". bloomberglaw.com. Archived from the original on March 23, 2023. Retrieved November 11, 2022.
  3. ^ a b c Rooney, Kate (August 20, 2022). "FTX grew revenue 1,000% during the crypto craze, leaked financials show". CNBC. Archived from the original on March 30, 2023. Retrieved August 22, 2022.
  4. ^ Mccrank, John; Davies, Megan (July 6, 2022). "Crypto exchange FTX has "a few billion" to support industry – Bankman-Fried". Reuters. Archived from the original on February 28, 2023. Retrieved August 22, 2022.
  5. ^ Cite error: The named reference wsj_overview_111122 was invoked but never defined (see the help page).
  6. ^ Osipovich, Alexander (July 20, 2021). "Crypto Exchange FTX Valued at $18 Billion in Funding Round". The Wall Street Journal. ISSN 0099-9660. Archived from the original on November 18, 2022. Retrieved October 7, 2021.
  7. ^ "FTX Deal Gives Institutions New Access to Crypto Markets". Bloomberg.com. July 13, 2021. Retrieved October 7, 2021.
  8. ^ "Crypto firm FTX Trading's valuation rises to $18 BLN after $900 MLN investment". Reuters. July 20, 2021. Archived from the original on February 8, 2022. Retrieved September 26, 2021.
  9. ^ "The downfall of FTX's Sam Bankman-Fried sends shockwaves through the crypto world". NPR. November 14, 2022. Archived from the original on November 14, 2022. Retrieved November 14, 2022.
  10. ^ Vidal-Tomás, David; Briola, Antonio; Aste, Tomaso (September 1, 2023). "FTX's downfall and Binance's consolidation: The fragility of centralised digital finance". Physica A: Statistical Mechanics and Its Applications. 625: 129044. arXiv:2302.11371. Bibcode:2023PhyA..62529044V. doi:10.1016/j.physa.2023.129044. ISSN 0378-4371.
  11. ^ Ossinger, Joanna (September 24, 2021). "Bankman-Fried's Crypto Exchange FTX Leaves Hong Kong for Bahamas". Bloomberg. Archived from the original on September 24, 2021. Retrieved September 26, 2021.
  12. ^ Hajric, Vildana (July 29, 2021). "Crypto Exchange Competition Heats Up With FTX.US Growth Spurt". Bloomberg.com. Archived from the original on November 12, 2022. Retrieved July 29, 2021.
  13. ^ Cite error: The named reference nyt Embattled Crypto Exchange FTX Files for Bankruptcy was invoked but never defined (see the help page).
  14. ^ Ostroff, Caitlin; Ge Huang, Vicky; Gladstone, Alexander (November 11, 2022). "FTX Files for Bankruptcy; Sam Bankman-Fried Steps Down as CEO". The Wall Street Journal. Archived from the original on November 11, 2022. Retrieved November 11, 2022.
  15. ^ Cite error: The named reference bloomberg_bankruptcy was invoked but never defined (see the help page).
  16. ^ Cite error: The named reference ft FTX crypto empire files for bankruptcy was invoked but never defined (see the help page).
  17. ^ Allison, Ian (November 2, 2022). "Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet". CoinDesk. Archived from the original on November 8, 2022. Retrieved November 9, 2022.
  18. ^ Macheel, Tanaya (November 8, 2022). "Bitcoin briefly touches a new low for the year, FTX token plunges more than 75% in broad crypto sell-off". CNBC. Archived from the original on November 8, 2022. Retrieved November 18, 2022.
  19. ^ Lagerkranser, Philip; Nicolle, Emily; Shukla, Sidhartha (November 7, 2022). "Tensions Between Crypto's Two Richest CEOs Spill Into Markets". Bloomberg News. Archived from the original on November 8, 2022. Retrieved November 18, 2022.
  20. ^ Wilson, Tom; Berwick, Angus (November 8, 2022). "Crypto exchange FTX saw $6 bln in withdrawals in 72 hours". Reuters. Archived from the original on November 18, 2022. Retrieved November 18, 2022.
  21. ^ Rooney, MacKenzie (November 9, 2022). "Binance backs out of FTX rescue, leaving the crypto exchange on the brink of collapse". CNBC. Archived from the original on November 19, 2022. Retrieved November 18, 2022.
  22. ^ "Sam Bankman-Fried: FTX founder arrested in Bahamas". December 13, 2022. Archived from the original on December 13, 2022. Retrieved December 13, 2022.

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