FTX's collapse

FTX, founded by Sam Bankman-Fried in 2019, grew rapidly into one of the world's largest cryptocurrency exchanges, reaching a peak valuation of roughly $32 billion by early 2022 on the strength of aggressive marketing and Bankman-Fried's carefully cultivated reputation as a responsible, safety-focused figure in an otherwise freewheeling industry. That reputation collapsed within days in November 2022, after a report revealed that Alameda Research, a trading firm also controlled by Bankman-Fried, held an outsized position in FTX's own token, FTT, raising doubts about the exchange's solvency; a subsequent wave of customer withdrawal requests and a failed rescue deal with rival exchange Binance exposed that FTX had covertly used customer deposits to fund Alameda's trading activities and cover its losses. Both FTX and Alameda filed for bankruptcy on November 11, 2022, with up to $9 billion in customer funds unaccounted for, and Bankman-Fried was arrested in the Bahamas the following month. He was convicted on fraud and money-laundering charges in November 2023, one of the largest financial-fraud cases since the era of Bernie Madoff.