Timeline of the Decline
September 2021
$84.18
All-Time High - Peak euphoria
November 2, 2022
$25.00
CoinDesk exposes Alameda's FTT-heavy balance sheet
November 8, 2022
$1.00
Binance announces selling FTT holdings, triggering bank run
Current
$0.85
Post-collapse trading
What Went Wrong
-
Fraudulent Misuse of Customer Funds
FTX secretly loaned $10B+ in customer deposits to Alameda Research for trading and investments, creating a hidden insolvency.
-
Incestuous Token Economics
Alameda's balance sheet was backed by FTT tokens - essentially collateralizing loans with tokens they printed themselves.
-
Liquidity Crisis and Bank Run
When customers withdrew funds, FTX couldn't cover redemptions because the money had already been spent by Alameda.