FTX — What Actually Happened?

Contentworks Agency
4 min readDec 5, 2022


You’ve probably heard a little bit about FTX recently, but do you really know what happened? Today, we’ll explain everything. After that, we’ll assess the outlook, and then give you the lowdown on market events this week.

Wait, what’s FTX?

FTX was one of the most popular crypto exchanges in the world. Its user base peaked in 2021 with over 1 million active users. At its height, it was the third-largest crypto exchange by volume and had over 300 employees.

Okay, so you noticed the use of the past tense there? Yeah, there’s a reason for that…

FTX is no more.

Where did FTX go?

Last month, the once super-popular Bahamas-based crypto exchange imploded almost overnight when it failed to meet a run on deposits that left the company with a GIGANTIC $8 billion hole in its accounts.

CEO Sam Bankman-Fried admitted that the company did not have sufficient assets in reserve to meet customer demand. The company then filed for bankruptcy on 11 November.

What happened though?

There’s another company you should know about, Almeda Research. This is another crypto trading firm, also owned by FTX founder and CEO Sam Bankman-Fried. If that already sounds a bit dodgy, that’s because it probably is.

The two crypto ventures were heavily related, as the latter relied on FTX’s native token, FTT, which prompted fears of artificially inflated token prices. When that came out, CZ — founder of the world’s leading crypto exchange, Binance, said he’d sell Binance’s FTT holdings. And then everyone lost their minds.

FTT holders desperately attempted to cash in their tokens, which caused a run on the bank, with FTX processing more withdrawals than it could actually handle.

FTT price

Source: CoinMarketCap

That bankruptcy filing shed some more light on things. In it, the company’s leadership admitted to using software to “conceal the misuse of customer funds”. It also admitted to not having an “​​accurate list of bank accounts and account signatories”. That’s really, really bad.

John Ray, who took over as the company’s new CEO after the bankruptcy filing, added that he’d “never seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.” Ouch.

So, corporate mismanagement, poor bookkeeping, possible token price fixing, potential insider trading… What a list.

How did the market take it?

Not well. Crypto investors are more than a little concerned. If this can happen to FTX, it can happen to any exchange and that’s scary.

It’s pushed some exchanges to publish proof of reserves, to calm their traders down. This is actually good and helps to legitimise the key players who do all they can to avoid an FTX-style meltdown.

The crypto market is currently in the midst of a downturn as it is.

What happened to the CEO?

Ah, Sam Bankman-Fried. The founder and former CEO of FTX took to Twitter to explain his side:

Source: Twitter

According to Bloomberg, Bankman-Fried’s net worth plummeted by 94% in a single day, going from around $16 billion to $1 billion. How was it ever $16 billion? Let’s not open that can of worms.

It’s difficult to predict what will happen to him. He may be extradited to the US for question over this debacle.

Any thoughts?

What did you make of the FTX implosion? Were you a trader there? We’d love to hear from you. Ping us your thoughts at @_contentworks; and please start following us while you’re there!

Top trading events week commencing 05.12.22

There’s a fair bit going on this week, here’s everything you need to know.


● USD — ISM Non-Manufacturing PMI (NOV)


● AUD — RBA Interest Rate Decision

● CAD — Balance of Trade (OCT)


● AUD — GDP Growth Rate YoY (Q3)

● EUR — GDP Growth Rate QoQ 3rd Est (Q3); GDP Growth Rate YoY 3rd Est (Q3)

● CAD — BoC Interest Rate Decision


● JPY — GDP Growth Annualised Final (Q3)


● CNY — Inflation Rate YoY (NOV)

● USD — PPI MoM (NOV); Michigan Consumer Sentiment Prel (DEC)

Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here.

Speak soon,

The Contentworks team



Contentworks Agency

Contentworks Agency provides compliance friendly content to banks, forex brokers, fintechs and many other sectors.