FTX Collapse: Key Events and Players

FTX Collapse

• FTX, a leading cryptocurrency exchange, went bankrupt in November 2022.
• The CEO, Sam Bankman-Fried, was sentenced to 25 years in prison and ordered to repay $11 billion.
• The catalyst for the collapse was a report by CoinDesk revealing that Alameda Research, a sister company run by Bankman-Fried, held a majority of its assets in FTT and other tokens controlled by FTX, rather than more stable assets.
• This led to a run on FTX, as investors withdrew their funds, forcing the exchange to declare bankruptcy.

Key Players

• Sam Bankman-Fried, the former CEO of FTX, was convicted of fraud.
• Gary Wang, a co-founder, took a plea bargain and testified against Bankman-Fried.
• John J.Ray III was appointed CEO of FTX after its collapse, specializing in recovering funds from failed corporations.

Institutional Investors

• Many prominent investors, including Sequoia, SoftBank, Temasek, BlackRock, and the Ontario Teacher's Pension Plan, invested in FTX.
• Sequoia Capital wrote down its equity in FTX to 0,losing0, losing 0,losing214 million.

Public Figures

• Several public figures, like Tom Brady, Shaquille O'Neal, Stephen Curry, and Gisele Bündchen, invested in FTX or promoted the company.

Partnerships and Sponsorships

• FTX had numerous partnerships with sports teams and organizations.
• They secured naming rights for the Miami Heat's basketball stadium, becoming FTX Arena.
• FTX partnered with Major League Baseball to place their logo on umpires' uniforms.
• The professional esports organization TSM was also sponsored by FTX, becoming TSM FTX.
• FTX was even in talks with Taylor Swift for a sponsorship deal.

FTX Bankruptcy

• FTX, short for "Futures Exchange," was a leading cryptocurrency exchange that went bankrupt in November 2022.
• The bankruptcy was caused by allegations of embezzlement and misuse of customer funds by FTX's owners.
• Sam Bankman-Fried, the CEO of FTX, was sentenced to 25 years in prison and ordered to repay $11 billion.
• FTX's collapse triggered significant concern about financial mismanagement and risk within the cryptocurrency industry.
• A CoinDesk report revealed that Alameda Research, a trading firm owned by Bankman-Fried, held a substantial amount of FTT, a token invented and controlled by FTX, raising concerns about FTX's financial stability.
• FTX filed for bankruptcy and was subsequently sold.
• John J. Ray III, a specialist in recovering funds from failed corporations, was appointed CEO of FTX.
• Notable investors in FTX included Sequoia Capital, SoftBank, Temasek, BlackRock, and the Ontario Teacher's Pension Plan.
• Many public figures, including Tom Brady, Shaquille O'Neal, Stephen Curry, and Gisele Bündchen, invested in or promoted FTX.
• FTX had numerous sports sponsorships, most notably naming rights to the Miami Heat's basketball stadium (FTX Arena), a partnership with Major League Baseball, and a sponsorship with the Mercedes-AMG Petronas F1 Team.
• FTX also had a naming rights deal with the professional esports organization TSM, which was renamed TSM FTX.
• FTX was in talks with Taylor Swift for a sponsorship deal.

FTX Bankruptcy

• FTX, a leading cryptocurrency exchange, went bankrupt in November 2022 due to allegations of misuse and embezzlement of customer funds by its owners.
• The exchange was founded by Sam Bankman-Fried, who was sentenced to 25 years in prison and ordered to repay $11 billion.
• Co-founder Gary Wang, a former classmate, testified against Bankman-Fried after taking a plea bargain.
• A CoinDesk article revealed that Alameda Research, a trading firm run by Bankman-Fried, held a large portion of its assets in FTT tokens, which were invented and controlled by FTX, instead of fiat currency or established cryptocurrencies.
• Following this revelation, investors and customers withdrew their funds from FTX, leading to its insolvency and subsequent bankruptcy filing.
• FTX's reliance on Alameda Research and its precarious financial practices raised concerns regarding financial risk management in the cryptocurrency industry.
• FTX was sold following its bankruptcy. John J. Ray III, an expert in corporate recovery, was appointed its CEO.

FTX Investors and Sponsorships

• FTX attracted numerous institutional investors, including Sequoia, SoftBank, Temasek, BlackRock, and even the Ontario Teacher's Pension Plan.
• Sequoia Capital wrote down its investment in FTX to $0, losing approximately $214 million.
• Several public figures, including athletes Tom Brady, Shaquille O'Neal, and Stephen Curry, and supermodel Gisele Bündchen, either invested in FTX or received compensation for promoting the company.
• FTX secured sponsorship deals with various sports teams and organizations, including the Miami Heat, Major League Baseball, Mercedes-AMG Petronas F1 Team, and professional esports organization TSM.
• FTX was also in talks with Taylor Swift for a sponsorship deal.