Term of the Moment
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Definition: FTX exchange
(FuTures EXchange) A now-defunct cryptocurrency exchange headquartered in The Bahamas. FTX was global, and FTX.US served the American market. Founded in 2019 by Sam Bankman-Fried (widely known as "SBF") and Gary Wang, FTX gained prominence when it acquired the Miami Heat's basketball stadium in 2021, renaming it FTX Arena. Valued at more than $30 billion, both FTX and FTX.US were in the top 10 crypto exchanges in 2021, but things changed abruptly a year later. See major crypto exchanges.
Biggest Crypto Meltdown Ever
In November 2022, an article revealed that FTX was co-mingling customer funds with Alameda Research, a crypto hedge fund also run by SBF. Binance, the largest crypto exchange, began liquidating its FTT tokens, which represent FTX's equity, and the token's value dropped more than 90% in one week. After hearing the news, a liquidity crisis developed when FTX customers began withdrawing assets.
FTX Is Paying Its Creditors
FTX asked the bankruptcy court to approve a process that determines the debts owed, and customers are expected to be repaid in part or in full. FTX has recovered many of its assets and claims creditors will be repaid from a $5 billion pool that started in May 2025. Stay tuned!
A Promo for Decentralization
Although a lot of reaction to this debacle was "I told you crypto was a fraud," FTX is actually the classic case for using cryptocurrency in the first place, but only in a "decentralized" manner. Although blockchains are by nature decentralized, a centralized exchange (CeX) such as FTX has complete custody of the funds and has to be trusted. Days after the FTX calamity, billions were withdrawn from other centralized exchanges such as Binance and Coinbase.
Decentralized Wallets Are Not Very Cozy!
When people use a decentralized exchange (DeX), they must access their assets from their own crypto wallets (see crypto wallet). However, because people must back up and secure their secret keys, plus the fact that many of the first crypto wallets had just about the worst user interface imaginable, crypto investors often use a centralized exchange (CeX) where they can view their assets like they do on their Wells Fargo and Fidelity portals. See crypto exchange, decentralized exchange and DeFi.
Worthy of a Thriller Novel
Biggest Crypto Meltdown Ever
In November 2022, an article revealed that FTX was co-mingling customer funds with Alameda Research, a crypto hedge fund also run by SBF. Binance, the largest crypto exchange, began liquidating its FTT tokens, which represent FTX's equity, and the token's value dropped more than 90% in one week. After hearing the news, a liquidity crisis developed when FTX customers began withdrawing assets.
FTX Is Paying Its Creditors
FTX asked the bankruptcy court to approve a process that determines the debts owed, and customers are expected to be repaid in part or in full. FTX has recovered many of its assets and claims creditors will be repaid from a $5 billion pool that started in May 2025. Stay tuned!
A Promo for Decentralization
Although a lot of reaction to this debacle was "I told you crypto was a fraud," FTX is actually the classic case for using cryptocurrency in the first place, but only in a "decentralized" manner. Although blockchains are by nature decentralized, a centralized exchange (CeX) such as FTX has complete custody of the funds and has to be trusted. Days after the FTX calamity, billions were withdrawn from other centralized exchanges such as Binance and Coinbase.
Decentralized Wallets Are Not Very Cozy!
When people use a decentralized exchange (DeX), they must access their assets from their own crypto wallets (see crypto wallet). However, because people must back up and secure their secret keys, plus the fact that many of the first crypto wallets had just about the worst user interface imaginable, crypto investors often use a centralized exchange (CeX) where they can view their assets like they do on their Wells Fargo and Fidelity portals. See crypto exchange, decentralized exchange and DeFi.
The tale of FTX and Bankman-Fried has been chronicled in several books. Worth billions one day and nothing the next, Bankman-Fried was sent to federal prison in California at age 32. Depending on good behavior, he may be released when he is roughly 50 years old or possibly earlier for a period of home confinement.