The fall of FTX continues to play out in spectacular fashion. As more details emerge, words such as "fraud" and "criminal misconduct" are replacing technical language such as "liquidity crisis." Indeed, the latest reporting points to corporate malfeasance on a large scale. Even the new CEO John J. Ray, who took over from founder Sam Bankman-Fried following his resignation last week, is saying as much.
In addition, the company's bankruptcy proceedings are now underway, and the first of potentially many lawsuits has been filed against the company (and even some of its celebrity supporters). To help you keep up with these fast-breaking developments, Cheddar News has updated its day-by-day timeline of the saga.
SUNDAY: NOVEMBER 6
Changpeng Zhao, CEO of competing crypto exchange Binance (the biggest crypto exchange), tweets that the firm is liquidating its holdings of FTT (a native digital token that FTX issued to customers). Zhao cited "recent revelations."
These "revelations" appear to be reference a CoinDesk report that uncovered deep financial ties between FTX and Bankman-Fried's other company, the hedge fund Alameda Research. Specifically, the fund's balance sheet is reportedly loaded with FTT tokens.
Bankman-Fried responds on Twitter that the rumors were "unfounded."
MONDAY: NOVEMBER 7
Bankman-Fried continues to deny speculation that FTX is in trouble, tweets that "a competitor is trying to go after us with false rumors" and that "FTX is fine. Assets are fine." That tweet that was widely reported on before it was deleted.
TUESDAY: NOVEMBER 8
Reuters reports that FTX customers withdrew around $6 billion from the exchange over the previous 72 hours, compounding what looks like a bank run.
Later that day, Zhao announces that Binance has signed a nonbinding agreement to fully acquire FTX.com, the unit of the company that was based outside of the United States, to ease a "liquidity crunch."
The news nonetheless rattles crypto markets. The price of FTT plunges.
WEDNESDAY: NOVEMBER 9
One day after announcing the acquisition, Binance backs out. Zhao says that the company won't move forward with the deal after doing its due diligence and seeing additional reports of FTX mishandling customer funds.
According to a Wall Street Journal report, FTX had lent more than half of its customers funds to Alameda Research, putting the hedge fund on the hook for billions of dollars. For context, crypto exchanges serve as custodians of customers' crypto assets (almost like a bank). Crucially, however, they aren't regulated like banks. In FTX's case, it was also reportedly shifting money to another firm.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) open a probe into FTX.
THURSDAY: NOVEMBER 10
FTX suspends withdrawals until further notice and stops taking on new customers. It also said customers should not deposit any additional funds.
Bankman-Fried tweets "I'm sorry" and says he's looking into raising capital to avoid a collapse.
Crypto lender BlockFi, which was recently bailed out by FTX, announces that it's suspending withdrawals.
FRIDAY: NOVEMBER 11
FTX announces bankruptcy. Bankman-Fried resigns.
Officials from Miami Dade County, which struck a deal to rename the home stadium of the Miami Heat, say they're exploring legal action if FTX can't meet its contractual obligations.
SATURDAY: NOVEMBER 12
FTX reports a cyberattack. A hacker made off with $400 million in Ethereum and other cryptocurrencies. There is speculation that it's an inside job. Whoever it is, one report says that the heist makes them one of the largest holders of Ethereum in the world.
SUNDAY: NOVEMBER 13
Bankman-Fried bizarrely tweets out "1) What" as if starting a thread, which is followed by the word "happened" one letter at a time over a 24-hour period.
After all that build-up, he tweets "I'll get to what happened. But for now, let's talk about where we are today." What follows is hardly a tell-all, but Bankman-Friend does provide some version of the company's situation.
Meanwhile, the Bahamian police say they are working with the country's securities regulator to investigate whether the company had committed any crimes.
MONDAY: NOVEMBER 14
Multiple federal agencies open probes into FTX. Now the U.S. Justice Department, the Securities and Exchange Commission and Commodity Futures Trading Commission are all investigating the company.
TUESDAY: NOVEMBER 15
The SEC of the Bahamas approves the liquidation of FTX assets PricewaterhouseCoopers is brought on to oversee the process.
Back in the United States, an attorney in Miami files a class action lawsuit against Bankman-Fried and several celebrities for promoting what it calls unregistered and unlawful securities. Some of the big names in the suit include Tom Brady, Gisele Bündchen, Naomi Osaka, Shaquille O'Neal, Stephen Curry, and Larry David, who famously appeared in a Super Bowl ad mocking crypto-skeptics.
WEDNESDAY: NOVEMBER 16
Bankman-Fried, who is reportedly still in the Bahamas, spills the beans in a Twitter DM interview with Vox reporter Kelsey Piper, who writes that she "came away from our conversation appalled by much of what he said."
Bankman-Fried is candid to say the least. In the interview, he refers to his past efforts at good public relations around ethics as being part of "this dumb game we woke Westerners play where we say all the right shibboleths and so everyone likes us."
Another gem: "f*** regulators. They make everything worse."
House and Senate leaders say they plan to hold hearings on the FTX collapse in the coming months.
THURSDAY: NOVEMBER 17
Details from FTX's bankruptcy filing emerge, and new CEO Ray doesn't mince words about the company's dire situation. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information," he says in a sworn statement. This is coming from a person who worked on Enron's bankruptcy.
Ray calls for a forensic analysis of FTX's accounting books and says the court shouldn't rely on the numbers currently being presented.
Also in the filing: details about how FTX employees and executives used company funds to buy houses and personal items in the Bahamas.
FRIDAY: NOVEMBER 18
The House Subcommittee on Economic and Consumer Policy is asking for internal documents and communications from Bankman-Friend and FTX. Democratic Rep. Raja Krishnamoorthi sent a letter Friday saying he is "extremely troubled" by the FTX bankruptcy. Those are fighting words coming from a lawmaker and don't bode well for Bankman-Fried at any future hearing.