The FTX Saga: From Losing Out On A Deal With Binance To Getting Hacked, A Timeline Of Events
The cryptocurrency exchange FTX, which was among the largest exchanges on the planet, crashed completely in just a few days' time.
In less than just a week, Sam Bankman-Fried, the billionaire creator of FTX, went from a beloved visionary in the crypto industry to one of the most controversial and hated figures and lost the majority of his net worth, as the FTX crypto exchange collapsed. So how did one of the biggest crypto exchanges in the world collapse as fast as it did? Let’s take a closer look at the timeline of events that transpired.
FTX Saga: A Timeline of Events
November 2, 2022: On November 2, the crypto news website CoinDesk released an article that highlighted the relationship between Sam Bankman-Fried’s two ventures; FTX (the exchange) and Alameda Research (the trading company). The report released by CoinDesk stated that a very large portion of assets under Alameda Research consisted of the FTT token, which is the native cryptocurrency of the FTX exchange. This was concerning since the FTT token was made up out of thin air to work on the FTX exchange and if it collapsed, a major portion of Alameda Research’s assets would collapse too.
Also Read: FTX Latest: Binance CEO Zhao Plans Recovery Fund
November 6, 2022: Binance CEO, Changpeng Zhao announced that Binance would be selling off all their remaining FTT token holdings due to the recent revelations that came to light. Alameda Research’s CEO Caroline Ellis then tweeted that their company would be willing to buy up Binance’s FTX tokens at $22 each. Due to this back and forth and Binance’s decision to sell off their FTT token, the value of the FTT token started to fall due to speculation of what was really going on.
November 8: As the wider cryptocurrency market was also crashing, people began to withdraw their funds from the FTX exchange for the fear of a ‘withdrawal run’ on the exchange. This also sent the price of the FTX token crashing below as the crypto market grew and started getting concerned about FTX’s liquidity. FTX users also started reporting delays in fiat currency withdrawals. On November 8, Binance announced a non-binding letter of intent to purchase the FTX exchange, after doing their due diligence, which helped stabilise the recent fears in the crypto market.
November 9: Binance officially walked away from the FTX acquisition deal citing that the FTX exchange’s issues are beyond their help to control or assist in. A spokesperson from Binance said that as a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, Binance has decided that it will not pursue the potential acquisition of FTX.com.
November 10: Sam Bankman-Fried announced that Alameda Research would be shutting down shop one way or another and that he would do everything possible in his power to repay the users who had funds invested in the FTX exchange, even though FTX was facing liquidity issues. On the same day on November 10, the Securities Commission of the Bahamas and Bahamian regulators froze all the assets of FTX and said that it is the prudent course of action in order to preserve assets and stabilise the company.
November 11: On November 11, the FTX crypto exchange filed for bankruptcy protection in the United States. CEO Sam-Bankman Fried also stepped down from his position but promised that he would assist in an ‘orderly transition. An individual named John Ray III was appointed the new CEO. The bankruptcy filings revealed that FTX had around $10 billion to $50 billion in liabilities and a similar amount in assets. John Ray III assured the exchange users that they would do everything to help recover their assets.
November 12: An FTX account administrator wrote on Telegram chat that the FTX exchange had been hacked and crypto assets worth nearly $600 million had been withdrawn. FTX officials urged users to uninstall all FTX apps from their devices. Many members of the crypto community suspect that this hack and stealing of crypto assets was more likely an inside job than an outside hack.