The crypto world has been busy! Not only did the Crypto Year 2022 saw monumental events like the Ethereum Merge, and Cardano Vasil Hard Fork taking place, but it also encountered a prolonged crypto winter since the crypto market crash took place in May 2022. Now joining the list of crypto events that took place in 2022, the FTX fiasco is one of them. Starting from its acquisition by the biggest crypto exchange in the world, Binance, to them calling off on the acquisition, to FTX soon getting hacked and billion of funds drained to the company announcing the Chapter 11 bankruptcy last week. It has been a lot of events too soon for the crypto world to comprehend. As we try to understand the steps and what led to what, here is a quick recap of the FTX events that took place.
TIMELINE OF THE FTX COLLAPSE: IN BRIEF
|2 November, 2022||CoinDesk publishes a document containing the balance sheet of Alameda Research that shows how overleveraged they are FTT tokens.|
|6 November, 2022||Binance CEO Changpeng Zhao announces that the company will be offloading all its reserves of FTT.|
|7 November, 2022||FTX’s Sam Bankman-Fried claims all is well with the crypto exchange and that assets are safe.|
|8 November, 2022||FTT token falls below the $22 level announced by the CEO of Alameda Research, resulting in a 75% freefall. Shortly after, Binance’s CZ announces its intention to acquire FTX post due diligence.|
|9 November, 2022||Binance officials backed out of the deal post the corporate due diligence over the mishandling of customer funds.|
|10 November, 2022||Tron’s founder Justin Sun announces a solution to help FTX. SBF announces that they are shutting down operations at Alameda Research.|
|11 November, 2022||FTX releases an official press release stating they have filed for Chapter 11 of the United States Bankruptcy Code.|
The collapse of FTX and the numerous incidents that followed the incident right from the start is most likely to point out and rise a number of criminal and civil actions against the exchange and its executives, like the former FTX CEO Sam Bankman-Fried. Speculations about the FTX funding have already started to flow in the market, however, no solid proof has been shared yet. The whole FTX incident is also likely to propel actions regarding actual regulatory changes.
Following the declaration of bankruptcy, few days after the FTX exchange had halted withdrawals for over a week, several state and federal agencies launched or expanded their investigations further into the company. The agencies looking into the matter includes the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Securities Commission of the Bahamas and the Bahamas’ Financial Crimes Investigation Branch; as FTX.com is based out of the Bahamas. Ron Hammond of the Blockchain Association has also said to CoinDesk that some lawmakers are suggesting to holding hearings, potentially by the end of the year!
10) That doesn’t mean crypto will be an afterthought til 2023. In fact, it is very likely that hearings will be held this month or next on this. Every Member will ask “what happened and how can we prevent this from occurring again.” Some may propose ideas, but action now unlikely
— Ron Hammond (@RonwHammond) November 10, 2022
Sen. Patrick Toomey (R-Pa.), the ranking member on the Senate Banking Committee, tweeted: