FTX History Timeline
2017 – Sam Bankman-Fried (SBF) co-founds a cryptocurrency hedge fund called Alameda Research. Despite doing well, the company struggles to find a continuous source of lending to boost its trading activity.
2019 – At age 27, SBF founds The Futures Exchange, or FTX, a centralized exchange to buy and sell crypto assets, rather than a cryptocurrency itself. The digital platform FTX.COM quickly rises to become one of the leading players in the new crypto economy. FTX is registered in Antigua and Barbuda, and based in Hong Kong.
2020 – A separate silo, FTX.US, is created as US citizens are not legally able to use the FTXCOM international exchange due to crypto trading regulations.
2021 – The FTX group generates about $1bn of annual revenue, through fees charged to customers for trades made on the platform. SBF raises $420m at a $25bn valuation in October. There are little to no financial controls in place over what happens to the funds. FTX moves its headquarters from Hong Kong to The Bahamas.
By 2022 – The FTX group grows to more than 130 subsidiaries and investment vehicles, created across 4 separate FTX silos.
Jan 2022 – FTX raises $400m in Series C funding at $32bn valuation; $400m at $8bn valuation for FTX.US.
November 2022 – The Collapse
2 Nov 2022 – Details of Alameda’s balance sheet are leaked, revealing the extent to which it is reliant on FTT (FTX’s native token) to meet its liabilities.
6 Nov 2022 – The CEO of FTX’s competitor, Binance, tweets that they intend to liquidate their entire holding of FTTs. This triggers fears around the solvency of the FTX group and the value of FTT.
It causes a run on FTX as customers request to withdraw their funds in huge numbers, with requests aggregating to $6bn. FTX is unable to process this because Alameda doesn’t have enough liquid assets to pay those fees back to FTX.
Over the next few days, SBF tries and fails to find bailout support from investors.
10 Nov 2022 – FTX halts all withdrawals from the platform.
11 Nov 2022 – SBF accepts that FTX is insolvent and signs papers putting the company into Chapter 11 bankruptcy proceedings and is replaced as CEO. It is estimated that FTX has more than 1 million creditors and owes more than $8bn.
Dec 12, 2022 – SBF is arrested by Bahamian authorities for financial offenses, at the request of the US government.
What happened next?
In our webinar, ‘Breaking down the FTX Collapse through Visual Modeling’, we took a closer look at the events of the FTX collapse and its ramifications so far.
Hosted by StructureFlow Head of Customer Success Owen Oliver, the panel included guest speakers Alex Zerden, Founder and Principal of boutique risk advisory firm Capitol Peak Strategies, and Tariq Khan, Partner at Outrun Ventures and active angel and crypto investor.
Using powerful visual modeling (created entirely using StructureFlow), the panel identifed and discussed three core themes:
- Absence of corporate governance
- The issue of trust and legitimacy facade
- Lessons for investors and their advisors
In this exclusive webinar, Owen Oliver and an expert panel discussed the rise and fall of FTX using the power of visualization and modeling. View the webinar recording, Breaking down the FTX Collapse through Visual Modeling, by clicking the button below.
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