FTX Collapse

2022

Date: 2-11 November 2022 · Place: FTX, Bahamas · Alameda Research · Crypto Twitter · Figures: Sam Bankman-Fried, founder · Caroline Ellison, Alameda CEO · CZ (Changpeng Zhao), Binance · Tags: Black Swan, SBF, Centralization 01. The CoinDesk Leak To Chapter 11 In Eight Days On 2 November 2022 CoinDesk publishes a leaked Alameda balance sheet showing its assets are mostly FTT, the exchange token of its sister company FTX. On 6 November CZ tweets Binance will liquidate its FTT bag. Bank run hits FTX within hours. By 8 November withdrawals freeze. By 11 November FTX files Chapter 11. Sam Bankman-Fried, valued personally at $26B a year earlier, is wiped out in a week. He spends the next month giving press interviews from his Bahamas penthouse, an unprompted apology tour that hands the prosecution most of its evidence. 02. The Memes That Survive Him Sam coins, the tokens FTX and Alameda inflated, become a slur for any centralized-exchange listing. SBF's hair becomes its own meme genre, the unbrushed mop framed against Vogue photoshoots from June 2022. It was a bad month, his catch-all summary, becomes a CT punchline for any disaster. Caroline Ellison's Tumblr surfaces. The polycule rumors run for weeks. FTX is the first crypto collapse where the personal lives of the founders are as much of the story as the balance sheet. 03. The Era Closes FTX is the official close of Era VII. After 11 November 2022 nobody on CT can argue the bull market is sleeping. SBF is convicted on seven counts on 2 November 2023, exactly a year after the CoinDesk leak, and sentenced to 25 years. The memes outlive him. The era's vocabulary, born on /biz/ and WSB, persists into 2024 AI Twitter and 2025 prediction markets. Every meme economy after this one is, in some way, a child of cryptomemes. Sources • CoinDesk, 'Divisions in Sam Bankman-Fried's Crypto Empire Blur' (2 November 2022) • US v. Samuel Bankman-Fried, SDNY, indictment and conviction (December 2022 / November 2023) • Michael Lewis, 'Going Infinite' (W.W. Norton, 2023)