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Cryptocurrency

SBF is awaiting 12 counts of fraud after the collapse of FTX (Michael M. Santiago/Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

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Jun 28, 2023

Details About the Last Days Of FTX 

A new episode of Bloomberg’s podcast Spellcaster: The Fall Of Sam Bankman-Fried was released Monday, and discusses the chaotic final days of the crypto exchange giant—as investors and executives scrambled to save themselves. 

Key Details

  • On November 2, 2022, CoinDesk broke the story about FTX and Alameda Research’s incestuous financial relationship and the fact that both organizations were shifting money to each other. 
  • The company had an $8-billion hole in its finances and was being held up by the inflated values of its proprietary FTT crypto token. 
  • On November 7, rival exchange Binance sold its supply of FTT. Within a week, FTX was bankrupt, its accounts were frozen, and the federal government seized it—after attempting to sell the company to Binance and failing.  
  • FTX leaders like Sam Bankman-Fried (SBF) and Caroline Ellison attempted to stem the bleeding of the collapse. They commanded Alameda to sell assets and raise capital to save FTX—but SBF did not even know how much money his company owed.  
  • Technicians and executives avoided the office in the final days, fearing that the exchange was on the verge of collapse.

Why It’s Important 

The collapse of FTX marks the largest financial failure in decades. FTX is alleged to be guilty of either massive incompetence or massive fraud, and the federal government is preparing to charge the exchange’s founder SBF with 13 counts of fraud. 

The newest episode of Spellcaster lays out the final days of the exchange in detail, showing just how chaotic the situation was from the standpoint of the average crypto investor and describing the known chain of events leading up to the crypto exchange’s collapse, with internal staff scrambling and panicking to right the ship against all odds—and ultimately failing. 

SBF is set to go to trial in October, with a recent motion to drop all of his charging being denied on June 22 by federal prosecutors. Many of his colleagues have been largely absolved of legal consequences by working with prosecutors on the case in exchange for plea deals. 

Notable Quote 

“I laughed a deep, uncontrollable laugh for a couple of minutes. It looks nothing like a traditional balance sheet from a real company, so when you see this thing, you ask if it’s a real document. But then you look into what it actually means and go, ‘Wow.’ My source said, ‘Do you want to see this balance sheet’ and I said, yah. It’s literally just a piece of paper with tokens assigned to them. I search a couple I had never heard from before … It was easy to show they owned all the tokens in existence, that the market was practically zero, and that there was no way they could realize any value,” says anti-crypto blogger James Block. 

Home / News / Details About the Last Days Of FTX 
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