The FTX bitcoin exchange’s narrative has suddenly come to light and upended the cryptocurrency industry. Here is a summary of how it got started and where it is right now.
Coordinated Universal Time is used for all dates (UTC). The most recent modifications are shown first in reverse order of when they were made.
Nov. 13: Accounts connected to the FTX and Alameda Research cryptocurrency exchange are frozen by Kraken.
On November 13, Kraken said that it has suspended the accounts of “FTX Group, Alameda Research, and their executives” on its exchange “to safeguard their creditors” after speaking with the relevant authorities.
Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.
— Kraken Exchange (@krakenfx) November 13, 2022
Other Kraken clients are not affected. Kraken maintains full reserves.
According to a Kraken spokesperson, certain funds that it “suspected to be associated with “fraud, negligence, or misconduct” related to FTX” were frozen from accessing certain accounts.
On November 13, FTX was the subject of a criminal investigation in the Bahamas.
Financial detectives and the Bahamas’ securities authorities are looking into potential criminal activity related to the collapse of the cryptocurrency exchange FTX, according to the Royal Bahamas Police Force.
On November 12, the regulator forbade Bahamian customers from making withdrawals.
The Securities Commission of The Bahamas (SCB) has denied giving the cryptocurrency exchange FTX instructions or authorization to provide priority to withdrawals from Bahamian customers. The securities commission fiercely refuted a claim made by FTX on Twitter on November 11 that it had received orders from “Bahamian HQ’s regulation and regulators” to make it easier for Bahamians to withdraw their money.
Securities Commission Addresses FTX Statement on Bahamian Withdrawals pic.twitter.com/OZKWwicSuN
— Securities Commission of The Bahamas (@SCBgov_bs) November 12, 2022
12 November: In the Bahamas, SBF is “under surveillance.”
According to a person with knowledge of the situation, Sam Bankman-Fried, FTX co-founder Gary Wang, and director of engineering Nishad Singh are believed to be in the Bahamas and are “under monitoring” by the local law enforcement.
Nov. 12: SBF disputes that he fled to Argentina.
Sam Bankman-Fried disputed in a text message to Reuters that he had gone to Argentina after resigning as CEO of FTX on November 11. The suspicions began when somebody used the flight monitoring website ADS-B Exchange to locate his private plane’s location. The tracker indicated that SBF’s Gulfstream G450 had arrived in Buenos Aires early on November 12 after arriving directly from Nassau, Bahamas.
Nov. 12: FTX confirms hack, $31.4M USDT is blacklisted by Tether.
Tether aggressively blocked $31.4 million worth of USDT tokens tied to the transactions after FTX confirmed the attack on Telegram.
According to blockchain analytics company Elliptic, a total of $477 million is believed to have been taken, with the remaining funds being transferred by FTX itself into secure custody.
Nov. 12: FTX money’ suspicious move is noted.
A popular Ethereum wallet address that had acquired over 83,878.63 ETH (worth over $105.3 million) in only two hours commencing at 2:20 am UTC on November 12 was the recipient of millions of dollars in transfers from wallets connected to FTX.
FTX's bankruptcy process appears to be starting as funds from both international and US wallets are being sent to 0x59abf3837fa962d6853b4cc0a19513aa031fd32b pic.twitter.com/hJ2JOTTMjj
— Steven (@Dogetoshi) November 12, 2022
On November 11, FTX US suspends withdrawals, and the head of FTX Ventures resigns.
Less than 24 hours following the platform’s alert advising users to close trading positions, it was suspended. After it was revealed that FTX will proceed with bankruptcy proceedings in the US, Amy Wu resigned from her position as CEO of FTX Ventures. Wu has been working out of FTX Venture’s headquarters in The Bahamas since January, according to her LinkedIn page.
Nov. 11: SBF resigns and FTX, FTX US, and Alameda file for Chapter 11 bankruptcy in the US.
About 130 FTX Group firms, including FTX Trading, FTX US, which operates under West Realm Shires Services, and Alameda Research, have begun the process of filing for bankruptcy in the United States, according to a tweet from FTX on November 11. Sam Bankman-Fried, the CEO of FTX, has also left his job; John Ray will take over as CEO going forward.
2) I'm really sorry, again, that we ended up here.
— SBF (@SBF_FTX) November 11, 2022
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.
Ultimately hopefully it can be better for customers.
Nov. 11: According to Zane Tackett, FTX’s liabilities are around $8 billion.
Zane Tackett, the former head of FTX’s institutional division, verified on Twitter that the exchange does indeed have $8.8 billion in liabilities, despite several speculations to the contrary.
2/ There's no way to paint a pretty image out of these numbers, but when I saw the balance sheet this evening i thought it was going to be much worse. Now, granted, there's a massive hole in liquid assets, there is a pretty big chunk of change in the ventures portfolio.
— Zane Tackett (@tackettzane) November 11, 2022
On November 11, the head of FTX Institutional resigned barely one day following the exchange’s collapse.
A letter sent to institutional clients claims that Zane Tackett, FTX’s institutional head of crypto, resigned on November 8, the day the entire FTX scandal began.
According to the paper, his staff was “totally in the dark” regarding the company’s impending insolvency and was told that the exchange had enough money to support customer withdrawals.
On November 11, following a meeting, all of the Alameda staff quit.
The trading company’s entire staff reportedly resigned jointly during a group meeting, according to reports quoting Alameda inside sources.
The news of the Alameda workers’ resignations comes just one day after CEO Sam Bankman-Fried announced that Alameda Research’s activities will shortly be discontinued.
11 November: Rumors of FTX CEO Sam Bankman-detention Fried’s stoke community outrage.
As the fourth day of FTX’s decline comes to an end, the crypto community is still inundated with rumors and theories. The most notable one is that Sam Bankman-Fried was detained on the airport tarmac in the Bahamas on November 11.
The first person to retweet a picture of a Flightradar24 map indicating that a private plane was grounded for around 40 minutes while en route to Miami from Nassau — the capital of the Bahamas, where FTX is located — was the creator of the nonfungible token (NFT) project, Not Larva Labs.
Nov. 11: California officials are looking into the collapse of the FTX cryptocurrency exchange.
On Nov. 10, the Department of Financial Protection and Innovation (DFPI) of the state of California declared that it will look into the collapse of the FTX cryptocurrency exchange.
Anyone in the state who has been impacted by the continuing FTX saga’s events is asked to phone a special hotline, according to the DFPI. It has now joined the growing number of American agencies looking into the collapse of the FTX exchange.
Nov. 11: A Bahamas-based FTX account uses NFTs to withdraw millions of dollars for other users.
On Nov. 10, FTX reopened withdrawals, but only for users from the Bahamas. A Bahamian account is purportedly withdrawing money on behalf of customers from various jurisdictions by selling nonfungible tokens on FTX’s NFT marketplace, getting around the internal balance transfers restriction.
The trapped user purchases the NFT with their whole money once the Bahamian account generates it. The money is subsequently sent from the Bahamian account to the buyer’s preferred decentralized wallet address.
On November 10, the Bahamian securities regulator froze FTX assets.
On November 10, the Bahamas’ securities watchdog, the Securities Commission of The Bahamas, suspended FTX’s registration in the nation and froze the assets of its local affiliate, FTX Digital Markets, and “associated parties.”
The freeze was justified by “public remarks indicating that customers’ funds were managed improperly,” and it was decided that putting FTX into provisional liquidation was the “prudent course of action.” Assets belonging to FTX cannot be transferred without the written consent of the interim liquidator, who was appointed by the Bahamian Supreme Court.
Nov. 10: FTX US declares that it could stop trading on its platform soon.
Trading may be suspended on FTX US in a few days, according to a banner at the top of the website for this exchange. Users were advised to “please shut down any positions” they may wish to close, but were also assured that “withdrawals are and will stay available” by the notification.
10 November: FTX US leaves the Crypto Council for Innovation.
On Nov. 10, CCI CEO Sheila Warren informed Cointelegraph that the council has accepted FTX US’ departure as an associate member of the organization. In order to create genuine change, Warren added, “We are dedicated to working toward creating legislation that protects users and preserves innovation.” Although the news this week has been distressing, we have also seen a strong sense of community. We have a historic chance to implement the best policies.
Nov. 10: A Republican legislator says SEC Chair Gary Gensler was collaborating with FTX “to acquire a regulatory monopoly.”
Emmer blasted Gensler in a tweet from November 10 for “running[ning] to the media” when FTX’s liquidity concerns caused tremors in the crypto market. The SEC chair’s alleged collusion with SamBankman-Fried and FTX was being investigated, the Republican legislator said, but his staff merely highlighted reports that were sent to his office as proof without going into more detail.
Nov. 10: CZ interacts with the president of El Salvador, who confirms there was no FTX exposure in that nation.
Changpeng “CZ” Zhao, CEO of Binance, responded to speculations concerning El Salvador on Twitter by stating that “the quantity of disinformation is absurd” and that he “exchanged messages with President Nayib [Bukele] only a few seconds ago.” According to what he said Bukele informed him, “we never did any business with them and we don’t have any Bitcoin in FTX. God is good!
Man, the amount of misinformation is insane.
— CZ 🔶 Binance (@cz_binance) November 10, 2022
I exchanged messages with President Nayib a few moments ago. He said "we don’t have any Bitcoin in FTX and we never had any business with them. Thank God!" https://t.co/CrM5wd24Ha
Nov. 10: Citing FTX, Maxine Waters warns that customers of unregulated cryptocurrency companies face “serious repercussions.”
In light of FTX’s liquidity difficulties, the head of the US House of Representatives Financial Services Committee argued for more government regulation of cryptocurrency trading platforms and consumer protection.
In a statement on Nov. 10, Waters pointed to FTX’s problems as the most recent illustration of incidences “including the collapse of cryptocurrency enterprises” and how such occurrences may have an effect on American consumers. The committee’s chair advocated for legislation to provide a framework for digital assets, praising her collaboration with Patrick McHenry, the ranking member of the Financial Services Committee, on a stablecoin regulation bill.
Nov. 10: According to blockchain statistics, FTX may have begun withdrawals.
As of 3:50 pm UTC, the exchange’s hot wallet address has resumed activity after being offline since FTX declared on November 8 that it would be stopping all user withdrawals. According to blockchain statistics, the hot wallet, which had a balance of $469 million at the time of publishing, has since been empty of several kinds of tokens and significant amounts of transactions.
Nov. 10: Japan’s financial regulator tells FTX Japan to stop doing business.
The FSA said on Nov. 10 that administrative procedures had been launched against FTX Japan as a result of FTX Trading Limited’s suspension of withdrawals “without fully disclosing the reasons to investors.” According to the financial regulator, it had issued business improvement and suspension orders in compliance with Japanese law, including the Financial Instruments and Exchange Act and the Payment Services Act.
On November 10, Sam Bankman-Fried issued an apology for the FTX liquidity situation, saying, “I messed up twice.”
CEO Sam Bankman-Fried, often known as SBF, has apologized in one of his first public remarks after the crypto market was inundated with rumors and worries about FTX’s collapse. SBF acknowledged to investors that he “could have done better” in terms of being transparent about the issue with FTX in a post on Twitter on November 10.
Nov. 10: Sequoia Capital declares its whole $214 million investment in FTX to be worthless.
Sequoia Capital, a venture capital company, said in a letter to its partners on November 10 that it had written down to $0 and declared a full loss on its $213.5 million investments in FTX and FTX US. The letter claims that although FTX’s exposure to the exchange is “minimal” in its Global Growth Fund III, where its cost basis for the FTX part of the fund amounted $150 million, the issue affecting the company has “generated a solvency risk.”
Nov. 9: The FTX website advises against making deposits because it cannot handle withdrawals.
On Nov. 9, FTX’s website was out for almost two hours, and when it came back up, it had a notice that strongly discouraged deposits and said that the exchange couldn’t handle withdrawals.
A pinned message on FTX’s official Telegram channel from its administrator further verified the warning, stating that both crypto and fiat withdrawals were impacted and that they did not know when the exchange would resume operations. They added that they “had a lack of knowledge at this juncture.”
On November 9, SBF allegedly informs investors that he needs $8 billion in urgent cash.
On Nov. 9, it was reported that Bankman-Fried had sent out an appeal to investors seeking $8 billion in emergency finance to address the “liquidity bottleneck” brought on by customer withdrawals during the previous few days.
According to reports, Bankman-Fried wanted to collect up to $4 billion from investors and cover the remaining amount with debt financing and even even his own riches to make sure that clients were satisfied.
Nov. 9: A sea of crimson on the cryptocurrency market.
The revelation had a negative impact on the cryptocurrency market, with investors becoming apprehensive and Bitcoin’s price falling to a multiyear low of $15,600. Analysts predicted an additional decline, speculating that Bitcoin may end up at the $12,000 level.
On November 9, Binance officially breaks the deal.
On Nov. 9, Binance declared that it will not be pursuing the purchase of FTX, less than 48 hours after Binance CEO Changpeng Zhao first said that the company may seek to acquire FTX.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
The exchange said that “the problems are beyond our control or capacity to assist” and noted the purported “[mishandling] of client cash and suspected US government investigations.”
8–9 November: SBF takes down the “assets are OK” tweet, and FTX websites fall down.
Sam Bankman-Fried, the CEO of FTX, removed his inflammatory Twitter thread on November 8 a few hours after announcing the company’s partnership with Binance. FTX Ventures and Alameda’s websites were taken down on November 9 as rumors that the company’s legal and compliance employees had resigned on November 8 circulated. On Nov. 9, rumors about Binance potentially wanting to break the deal started to circulate.
Nov. 8: FTX plans to sell exchange to Binance because to a “liquidity shortage.”
On Nov. 8, FTX CEO Sam Bankman-Fried made the startling revelation that FTX and Binance had “reached to an agreement on a strategic transaction” for the exchange to support what he termed a “liquidity crisis.” The key justification given by FTX for asking Binance to intervene, he said, “all assets will be covered 1:1.”
Changpeng Zhao, the CEO of Binance, said soon after that the company had signed a non-binding letter of intent to purchase the exchange but cautioned that it maintained the right to “back out of the agreement at any moment.”
Nov. 8: The FTT price and the cryptocurrency markets begin to sag.
As a result of the succession of disclosures, several experts started to issue warnings on November 7 that FTX Token will see a substantial price fall. On November 8, the price of FTT fell by over 30% in a couple of hours, from $22 to around $15.40. Bitcoin’s price began to fall as well as a result of worries that FTX would soon fail.
Nov. 7: CZ rejects the over-the-counter agreement with Alameda.
Binance CEO Changpeng Zhao responded to an inquiry on Twitter by indicating his unwillingness in pursuing the prior agreement Ellison had reached to purchase Binance’s FTX Token holdings for $22 per token, adding, “I believe we will remain in the free market.”
Sounds like you want Alameda to buy $580m of BNB and then do a swap for the FTT?
— db (@tier10k) November 7, 2022
Nov. 7: SBF declares that “assets are good” and implores CZ to unite.
A rival “is attempting to go after us with false rumors,” according to FTX CEO Sam Bankman-Fried, in a series of tweets he sent out shortly after the exchange addressed customer concerns. The assets are good.
He said that the exchange does not “invest customer money,” has “enough to support all client holdings,” and has been “processing all withdrawals, and will continue to be.” Announcing that FTX has $1 billion in extra funds, Bankman-Fried urged Changpeng Zhao, CEO of Binance, to “work together for the ecosystem.”
Nov. 7: The FTX “bank-run” starts, as the exchange deals with slow withdrawals.
Users of FTX started to withdraw their money from the exchange out of worry that it would fail as a result of the circulating stories and rumors, and commenters urged those who hadn’t done so previously to do so.
Get your funds out of FTX. This is financial advice.
— Ran Neuner (@cryptomanran) November 6, 2022
The data that was reported by Nansen on November 7 showed that stablecoin withdrawals on FTX reached $451 million over a period of seven days. At the same time, users started reporting sluggish withdrawals on FTX, and the exchange responded to the withdrawal complaints by assuring users that everything was operating smoothly.
Nov. 6: The CEO of Alameda offers to purchase Binance’s FTT holdings.
Shortly after Binance CEO Changpeng Zhao made the announcement on November 6 that Binance would be liquidating its FTX Token position, Alemeda CEO Caroline Ellison tweeted at Zhao that Alameda would “happily buy it all” for $22 per share. Ellison said that Alameda would “buy it all” for $22 per share.
Nov. 6: In response to “new disclosures,” Binance decides to sell its FTT holdings.
Later on November 6, Binance CEO Changpeng “CZ” Zhao made the announcement that his company will be selling out all of its FTT assets. He cited “recent disclosures that have come to light,” which is widely assumed to be a reference to the Alameda balance sheet. Zhao said that Binance had around $2.1 billion equal in Binance USD (BUSD) and FTX Token as a result of its FTX disposal from the previous year; however, Zhao did not explain Binance’s current FTT holdings.
He also said that the tokens will be sold in a manner that “minimizes market effect,” and that the company anticipated it would take “a few months to complete” the token sales.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Additionally, he verified that the transfer of roughly 23 million FTT that took place on November 5 was a part of Binance’s liquidation maneuver.
Zhao said subsequently that the decision was “simply post-exit risk management” and that he was referring to the lessons gained from the collapse of Terra’s LUNA, which is now known as Luna Classic (LUNC), and its influence on the market rather than being the result of a dispute that took place on Twitter.
Nov. 6: Alameda CEO describes the company’s financial sheet.
In a tweet sent out on November 6, Alameda CEO Caroline Ellison attempted to allay any fears that may have been sparked by the publication of a leaked balance sheet. In the tweet, she stated that the sheet in question was only for “a subset of our corporate entities,” and that other assets with a value of more than $10 billion “aren’t reflected there.” In addition, she noted that the sheet in question was only for “a subset of our corporate entities.”
- the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed
— Caroline (@carolinecapital) November 6, 2022
- given the tightening in the crypto credit space this year we’ve returned most of our loans by now
Nov. 5: Trackers see a big FTT transfer to Binance
The Twitter account Whale Alert, which monitors significant on-chain cryptocurrency movements, alerted its users on November 5 that nearly 23 million FTX Tokens, worth more than $584.5 million, had moved onto Binance. Whale Alert is an account that tracks significant on-chain cryptocurrency movements.
The sum was approximately equivalent to 17% of the total FTT supply that was circulating at the moment.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 22,999,999 #FTT (584,818,174 USD) transferred from unknown wallet to #Binancehttps://t.co/Nm2jz9MKW0
— Whale Alert (@whale_alert) November 5, 2022
Nov. 2: According to reports, a corporation created by SBF had substantial sums of FTT.
The saga began on November 2, after reports that a balance sheet from the trading firm Alameda Research, which was founded by Sam Bankman-Fried, had been stolen and leaked. The sheet suggested that the company held a significant amount of FTX Token, which is the native token of the FTX cryptocurrency exchange.
The cryptocurrency community expressed alarm with a huge trading business having such a significant quantity of a single asset, which led to queries over the link between Alameda and FTX.
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