FTX filed for bankruptcy in November 2022 during a major cryptocurrency-market crash.
FTX and affiliated companies filed for Chapter 11 bankruptcy protection on November 11, 2022. The exchange had been one of the world’s largest crypto trading platforms. Its collapse followed revelations about the relationship between FTX and Alameda Research, including concerns about the assets and liabilities shown on Alameda’s balance sheet.
Customers rushed to withdraw funds, but FTX could not meet the demand. A proposed acquisition by Binance was announced and then abandoned after due diligence revealed serious financial and governance concerns. The failure intensified an already weak crypto market following the collapses and insolvencies of other firms in 2022.
The bankruptcy was not itself a stock-market crash in the traditional exchange-index sense. It was a major event in the digital-asset market that affected crypto prices, lenders, venture investors, and millions of customers. In 2024, FTX founder Sam Bankman-Fried was convicted on fraud and conspiracy charges and sentenced to 25 years in prison.