FTX Collapse · 9 Days From $32B to Bankruptcy

The balance sheet that got out

On Sunday, November 6, 2022, CZ posted a tweet; on Friday, November 11, FTX filed for bankruptcy. Counting from CoinDesk's report on November 2, that is nine days. This volume lays those nine days out one at a time, then covers what set them up (the rescue spree after LUNA in May 2022) and what came after (SBF's 25-year sentence, the sale of the Anthropic stake, and the progress of customer recoveries).

On November 2, 2022, CoinDesk reporter Ian Allison published an article titled "Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet." The article itself accused no one of wrongdoing, but it was based on an internal Alameda Research balance sheet dated June 30, 2022. How that document reached the reporter, CoinDesk has never said.

The figures that stand out on that sheet: total assets of $14.6 billion, of which $3.66 billion was "unlocked FTT" and $2.16 billion was "FTT collateral." In plain English, this market-making firm held roughly 40% of its balance sheet in the exchange-issued token of its own sister company. Drill down further and the sheet also showed $3.37 billion of "crypto held"; the tokens the report named were SRM (Serum, another FTX-ecosystem token), MAPS, OXY and FIDA — all FTX-ecosystem tokens. SOL was listed separately across several lines, and unlocked, locked and collateral SOL together came to about $1.2 billion (CoinDesk · the original November 2, 2022 report). The report did not say how much each token made up, but put "self-issued" and "self-ecosystem" together and a large share of Alameda's reported assets sat in the category of "if FTX dies, there is no bid for any of this."

Four days later, CZ posted that he was liquidating Binance's FTT position. If you want only the day-by-day timeline of those nine days, jump to Section III. For the criminal trial and recoveries, jump to Section V. For the checklist, jump to Section VI · After FTX: what to check about an exchange.

I. How the empire was stacked

SBF the person

Sam Bankman-Fried was born in 1992; his parents, Joseph Bankman and Barbara Fried, are both professors at Stanford Law School. He graduated from MIT in 2014, joined Jane Street afterwards and left in September 2017; he publicly embraced the "earning to give" idea associated with Effective Altruism (Wikipedia · Sam Bankman-Fried). Company records disclosed after the collapse showed that Alameda's loans to SBF personally came to $1 billion as of September 30, 2022 (Wikipedia · FTX); the total giving his philanthropic Future Fund said it had committed as of September 1, 2022 was about $160 million (Wikipedia · Sam Bankman-Fried).

In 2017 he founded Alameda Research together with Tara Mac Aulay (Wikipedia · Alameda Research). In January 2018 he organized an arbitrage trade on the gap between bitcoin prices in Japan and the United States, at its peak moving about $25 million a day (Wikipedia · Sam Bankman-Fried). FTX was founded in 2019 by SBF and Gary Wang; in September 2021 it moved its headquarters from Hong Kong to the Bahamas (Wikipedia · FTX).

FTX passed one million users in 2021, and before the collapse it was handling about $10 billion in trading volume a day (Wikipedia · FTX). Alameda traded on FTX during the same period, and the two firms were publicly described as operating independently. FTX signed celebrity endorsers including Tom Brady, and in February 2022 it ran a Super Bowl ad starring Larry David (Wikipedia · Larry David).

FTX and Alameda: independent on paper only

FTX and Alameda always described themselves as independent of each other. What the trial and the bankruptcy proceedings disclosed was different:

• FTX co-founder Gary Wang testified that in 2019, at SBF's direction, he changed FTX's code so that Alameda could draw nearly unlimited funds from FTX without triggering automatic liquidation (Wikipedia · United States v. Bankman-Fried).
• Alameda's CEO Caroline Ellison joined Alameda in early 2018 from Jane Street, became co-CEO in October 2021 and sole CEO from August 2022; when FTX collapsed, she, SBF and several friends and coworkers were still sharing the same penthouse apartment (Wikipedia · Caroline Ellison).
• After taking over, John J. Ray III wrote in his first declaration, filed with the US Bankruptcy Court for the District of Delaware on November 17, 2022, that he had never in his career seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information (the original wording appears in Section III).

None of this was known outside the firm before November 2. FTX raised $900 million in July 2021 at an $18 billion valuation, and $400 million in its January 2022 Series C at a $32 billion valuation. Its investors included Sequoia Capital (about $214 million, written down to zero on November 9, 2022), Temasek (which announced its write-down on November 16), SoftBank, Tiger Global, BlackRock, Lightspeed and the Ontario Teachers' Pension Plan (OTPP) (Wikipedia · FTX).

II. November 2 · The Coindesk article

First, the six months from May to October 2022. In May 2022 LUNA / UST collapsed and wiped out close to $45 billion of market value within a week (Wikipedia · Terra). Over the following weeks Three Arrows Capital (3AC), Celsius and Voyager Digital failed one after another. During this stretch SBF stepped in as a rescuer: he gave BlockFi a $400 million credit line with an option to acquire it for about $240 million, and after Voyager went bankrupt, FTX won the auction for its assets at a total deal value of about $1.42 billion — a deal that fell through when FTX itself went bankrupt (Wikipedia · FTX).

What came out later is that during the very stretch when it was rescuing others, Alameda was losing money itself: it took a run of losses in May and June 2022, and FTX was reportedly lending it more than half of its customer funds (Wikipedia · Alameda Research).

On November 2, 2022, CoinDesk ran Ian Allison's report stating that 40% of Alameda's $14.6 billion in assets was FTT (Wikipedia · Bankruptcy of FTX).

The article made no accusation of wrongdoing, but it put these figures on the record:

• Alameda total assets: $14.6 billion
• Of which: $3.66B unlocked FTT, $2.16B FTT collateral, $3.37B "crypto held"
• Liabilities: $8 billion, of which $7.4 billion was "loans"
• Book net value: roughly $6.6 billion ($14.6 billion minus $8 billion), but the bulk of the asset side was FTT plus related tokens such as SRM and SOL

Put together, the figures say one thing clearly: Alameda's net assets depended heavily on the FTT price. If FTT went down together with SRM and SOL, its net value would be eaten away.

On November 6, Alameda CEO Caroline Ellison responded publicly that the balance-sheet information that had come out included only some of Alameda's assets, and that the firm had more than $10 billion of assets not reflected there (Wikipedia · Caroline Ellison).

III. Nine days, day by day

What follows goes day by day, listing only the key events of each day. The run starts with CZ's tweet on November 6 and ends with FTX's bankruptcy filing on November 11. The key tweets are linked to the original posts.

"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

John J. Ray III, First Day Declaration, US Bankruptcy Court, District of Delaware, November 17, 2022

IV. After the collapse: witnesses, charges, and the takeover

Caroline Ellison, Gary Wang, Nishad Singh: testimony and sentences

Caroline Ellison (Alameda CEO) pleaded guilty in December 2022 to seven counts, including conspiracy to commit wire fraud against FTX customers, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering; she testified for the prosecution in October 2023; and on September 24, 2024 she was sentenced to 24 months in prison (Wikipedia · Caroline Ellison). She told the court that SBF had directed her to commit the crimes (Wikipedia · United States v. Bankman-Fried).

Gary Wang (FTX co-founder) testified that in 2019, at SBF's direction, he changed FTX's code so that Alameda could draw nearly unlimited funds without triggering automatic liquidation (same source). On November 20, 2024 he was sentenced to time served plus three years of supervised release (Wikipedia · FTX).

Nishad Singh (FTX engineering director) also testified, including about SBF's heavy spending on campaign donations and other things (Wikipedia · United States v. Bankman-Fried). On October 30, 2024 he was sentenced to time served plus three years of supervised release (Wikipedia · FTX).

DOJ, SEC and CFTC file on the same day

About a month after the bankruptcy filing — December 13, 2022 — the Department of Justice, the SEC and the CFTC all filed against SBF on the same day, each under its own statutes:

• DOJ (criminal) filed Indictment 22-cr-673 (LAK) in the Southern District of New York. Lewis A. Kaplan, presiding. He was initially charged with eight counts of fraud and conspiracy; one was later dropped, and seven went to trial in 2023 (Wikipedia · United States v. Bankman-Fried). Of the three filings, this was the only criminal one.
• SEC (civil) filed Complaint 22-cv-10501 in the SDNY, alleging that SBF violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 (SEC press release 2022-219).
• CFTC (civil) filed a separate complaint in the SDNY, alleging that the defendants committed fraud and made material misrepresentations in connection with the sale of digital commodities, in violation of the Commodity Exchange Act and CFTC regulations (CFTC press release 8638-22). What stands out on the CFTC side is that it treats assets like BTC and ETH as "digital commodities" — the press release names both.

John J. Ray III's first week

John J. Ray III took over as CEO on November 11, 2022, the day FTX filed for bankruptcy. His best-known earlier job had been chairman of Enron Creditors Recovery Corp. from 2004 to 2009, in charge of recovering assets after Enron's collapse (Wikipedia · John J. Ray III). On November 17 he filed his first declaration with the US Bankruptcy Court for the District of Delaware, which contains the "never in my career" sentence (original wording in Section III).

The declaration is publicly available through PACER (the federal courts' electronic filing system) and through Kroll Restructuring Administration, the official notice site for the FTX case (restructuring.ra.kroll.com/FTX), in the docket of Case 22-11068-JTD.

V. After: criminal trial, sentence, recoveries

What does "recovery above 100%" mean? John J. Ray III estimated that, measured in petition-date dollars, customers and digital-asset lending creditors would recover 118% to 142% (Wikipedia · Bankruptcy of FTX). On the surface creditors were being "over-repaid" — but the principal was converted into dollars at November 2022 prices. BTC rose sharply after that, and the dollars creditors received buy back fewer coins than they originally deposited. This is the opposite of how Mt.Gox turned out: after Mt.Gox moved from bankruptcy back to civil rehabilitation in 2018, its creditors were paid by number of coins (see Shipwreck Annals · Volume One · Mt.Gox). Whether an estate pays out in fiat terms or in crypto in kind can make a very large difference to the result.

Where the recoveries came from

After John J. Ray III's team took over, it raised money for repayments by selling equity stakes and tokens and by pursuing assets. Below are the sources that can be traced to a citation.

• Anthropic equity: in April 2022 Anthropic announced a $580 million raise, of which about $500 million came from the FTX side led by SBF. In March 2024 the FTX estate sold most of that stake for about $884 million, with the largest buyer from the UAE (according to CNBC on March 25, 2024; see Wikipedia · Anthropic). The sale price was above the original investment, but it was only one of several sources of recovery.
• Solana holdings: FTX / Alameda held a large amount of SOL, much of it under lock-up. As the SOL price recovered from 2023 on, those holdings became one of the important sources that pushed customer recoveries above 100% (Wikipedia · Bankruptcy of FTX).
• Robinhood stock: the roughly 7.6% stake in Robinhood held on the Alameda side was seized by the US government at the time of the FTX bankruptcy, and was later bought back by Robinhood for about $605 million ($10.96 a share) (Wikipedia · Robinhood). These shares went down the government-seizure track, not entirely through the bankruptcy proceedings.
• The roughly $470 million moved out on the night of the filing (a loss, not a recovery): late on November 11, 2022, about $473 million of FTX assets was moved out in "unauthorized transactions." In January 2024 the US Department of Justice charged three people with running a SIM-swap theft ring; the indictment says they stole more than $400 million in crypto from an unnamed company on November 11–12, 2022 (Wikipedia · Bankruptcy of FTX).

SBF's custody and appeal (checked September 2026)

After his December 22, 2022 extradition to the United States, SBF was first released on bail; in August 2023 his bail was revoked and he was held at the Metropolitan Detention Center in Brooklyn (MDC). In 2025 he gave an interview to Tucker Carlson from prison without the prison's approval; he was put in solitary confinement afterwards and then transferred to FCI Terminal Island, a low-security federal prison in Los Angeles (Wikipedia · Sam Bankman-Fried).

SBF appealed his conviction and sentence on April 11, 2024. The US Court of Appeals for the Second Circuit heard oral argument on November 4, 2025, and on June 12, 2026 issued its ruling upholding the conviction, the 25-year sentence and the roughly $11 billion forfeiture order (Wikipedia · Sam Bankman-Fried). In September 2026 he petitioned the US Supreme Court (Wikipedia · Sam Bankman-Fried).

How to check a customer claim (checked September 2026)

• Small accounts: under the reorganization plan, customers with account balances below $50,000 are repaid in full at petition-date prices (Wikipedia · FTX).
• Distributions in batches: the different classes of creditors receive distributions in batches; for the dates and percentages of each batch, go by FTX's official notices.
• Checking your own status: claimants have to complete identity verification through the Kroll platform. For claim status, filing deadlines and the latest notices, go by the official Kroll portal at restructuring.ra.kroll.com/FTX.

VI. After FTX: what to check about an exchange

1. "Independent operations" needs outside verification behind it. FTX and Alameda described themselves as independent in every public statement, but never produced a third-party report to show it. When an exchange leans only on its own announcements to claim independence and cannot produce a report from an independent third party, treat the claim as unproven.
2. Check who holds the platform token. Alameda alone held a large amount of FTT, and carried it among its assets at market price. Concretely: paste the token contract into Etherscan, Solscan, or BscScan and look at how much the largest addresses hold on the "Top Holders" tab. The exchange's own cold wallets and burn addresses will also rank near the top, so count them separately — the figure is whatever you find at the moment you check.
3. "Customer assets are fully segregated from corporate funds" in the terms of service proves nothing; look at the proof of reserves. Check whether the exchange publishes a Proof of Reserves on a regular schedule. A report issued by an independent third party is more credible; where there is none, all you can do is check the on-chain addresses yourself and use the page's own lookup to see whether your account was counted. On how to read one, see What Is Proof of Reserves (PoR)?; for the criteria one by one, see Lesson Two · From Mt.Gox to FTX: Shared Warning Signs Before 8 Exchange and Lending-Platform Failures.
4. Celebrity endorsements and advertising say nothing about the balance sheet. FTX signed celebrity endorsers and bought a Super Bowl ad. That shows PR spending; whether the money is there is a separate question.
5. A "non-binding letter of intent" in the middle of a run is first of all a sign that liquidity is in serious trouble. CZ announced the non-binding letter of intent on November 8; the next day Binance said it would not go ahead, and the outcome did not change.
6. A list of institutional investors is no substitute for your own checks. Sequoia wrote its roughly $214 million investment down to zero on November 9, 2022, and Temasek announced its write-down on November 16 (Wikipedia · FTX) — however long the list, these institutions did not avoid the loss themselves.
7. Outsiders cannot see lending between institutions; public signals are all there is to watch. Alameda's funding hole existed before the November run; the outside world only saw the full picture after the bankruptcy, from charging documents and later reporting. Ordinary users cannot see lending between institutions, but they can watch whether the platform token is being moved or pledged in size, whether the proof of reserves is updated on schedule, and whether withdrawals are starting to slow.