Obituaries

FTX Was Worth $32 Billion in January and Bankrupt by November

Customer deposits were supposed to sit untouched at the exchange. Instead they went on a field trip to a hedge fund next door.

Photo by Arturo Añez / Unsplash

FTX built its reputation on being the responsible crypto exchange — the one with the boyish, disheveled billionaire founder who testified before Congress about regulation and gave interviews about effective altruism. By January 2022 it was valued at $32 billion. By November, it was bankrupt, and its customers were missing an estimated $8 billion.

The mechanism was almost old-fashioned: customer deposits that were supposed to stay at FTX were quietly funneled to Alameda Research, a trading firm run by the same founder, Sam Bankman-Fried, and used to cover Alameda's own bad bets, buy real estate, and fund political donations. The collapse itself, once it started, took ten days — November 2 to November 12, 2022 — to go from "liquidity concerns" to full bankruptcy filing.

Bankman-Fried gave a widely watched interview shortly after, in which he described the situation as having gotten "a little cocky." He was arrested in the Bahamas in December 2022, convicted in November 2023 on seven counts including wire fraud and conspiracy, and sentenced in March 2024 to 25 years in prison. An appeals court rejected his bid to overturn the conviction in 2026.

The part that made it land differently than a normal financial collapse was the marketing: FTX had spent heavily positioning itself as the trustworthy adult in a famously untrustworthy industry. It turned out to be untrustworthy in the most traditional way possible — someone was just quietly moving the customers' money.

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A Hand-Tightened Blind Flange and a Botched Shift Handover Killed 167 Men on Occidental Petroleum's Piper Alpha Platform in 22 Minutes. No One at the Company Was Ever Criminally Charged.

Netflix Spent Six Years Telling Customers Love Is Sharing a Password. Once It Started Charging $7.99 a Month Per Shared Password Instead, Subscriber Growth Hit Its Best Year Since the Pandemic.

New York Paused Congestion Pricing for 'Affordability' Weeks Before a 2024 Election, Then Relaunched It at a Lower Price Once Voting Was Over. A Year Later, Traffic Was Down 11 Percent and the Federal Government Was Still in Court Trying to Kill It.

Twitter Cut Off the Third-Party Apps That Built Its Developer Ecosystem in January 2023 With No Warning. One of Those Apps Coined the Word Tweet and Designed Twitter's Bird Logo Before Twitter Had Either.