FTX’s ongoing saga: Everything that’s happened until now

The story between cryptocurrency exchanges Binance and FTX has quickly unfolded and caused havoc in the crypto market. Here’s a breakdown of where it began and where it is now.

All dates are Coordinated Universal Time (UTC). Updates are in reverse order — the latest updates are at the top. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

Nov. 12: Regulator denies allowing withdrawals for Bahamian clients

The Securities Commission of The Bahamas (SCB) has denied instructing or authorizing crypto exchange FTX to prioritize withdrawals of Bahamian clients. In a statement on Nov. 12, the securities commission vehemently denied a Nov. 11 statement from FTX on Twitter that suggested it had been instructed by “Bahamian HQ’s regulation and regulators” to facilitate the withdrawal of Bahamian funds.

Nov. 12: SBF is ‘under supervision’ in Bahamas

Sam Bankman-Fried, along with FTX co-founder Gary Wang and director of engineering Nishad Singh are understood to be in the Bahamas and are “under supervision” by the local authorities, according to a source familiar with the matter.

Nov. 12: SBF denies fleeing to Argentina

After stepping down as CEO of FTX on Nov. 11, Sam Bankman-Fried has denied in a text message to Retuers that that he’s fled to Argentina. The rumors started after users tracked the coordinates of his private jet using the flight tracking website ADS-B Exchange. The tracker suggested that SBF’s Gulfstream G450 had landed in Buenos Aires on a direct flight from Nassau, Bahamas in the early hours of Nov. 12.

Nov. 12: FTX confirms hack, Tether blacklists $31.4M USDT

Following FTX’s confirmation on Telegram about the hack, Tether proactively blacklisted $31.4 million worth of USDT tokens linked to the transactions.

Blockchain analytics firm Elliptic said $477 million is suspected to have been stolen in total, while the remainder was moved into secure storage by FTX itself

Nov. 12: Suspicious move of FTX funds flagged

Wallets associated with FTX were detected transferring millions in funds to a common Ethereum wallet address, which had amassed over 83,878.63 ETH (worth over $105.3 million) in just two hours starting at 2:20 am UTC on Nov. 12. 

While some blockchain investigators saw it as the start of the bankruptcy process, speculations around ill-intent or an external hack surfaced across the crypto ecosystem.

Nov. 11: FTX Ventures head resigns: Report

Amy Wu, an investor in FTX and the head of the firm’s venture capital arm, FTX Ventures, has reportedly resigned from her position. According to a Nov. 11 report from The Information, Wu resigned as head of FTX Ventures following the announcement FTX would be moving forward with bankruptcy proceedings in the United States. According to her LinkedIn profile, Wu had been based at FTX Venture’s offices in The Bahamas since January.

Nov. 11: FTX US suspends withdrawals and FTX Ventures head resigns

The suspension came less than 24 hours after the platform issued an advisory urging its users to close down trading positions. Meanwhile, Amy Wu has resigned as head of FTX Ventures following the announcement FTX would be moving forward with bankruptcy proceedings in the United States. According to her LinkedIn profile, Wu had been based at FTX Venture’s offices in The Bahamas since January.

Nov. 11: FTX, FTX US and Alameda will file for Chapter 11 bankruptcy in US, and SBF resigns

In a Nov. 11 tweet, FTX said roughly 130 companies in FTX Group — including FTX Trading, FTX US, under West Realm Shires Services, and Alameda Research — had started proceedings to file for bankruptcy in the United States. FTX CEO Sam Bankman-Fried has also resigned from his position and will be succeeded by John Ray.

Nov. 11: FTX has liabilities roughly worth $8 billion — Zane Tackett

After several rumors about FTX facing an $8 billion hole on its balance sheet, Zane Tackett, the former head of the institutional arm at FTX, confirmed on Twitter that the exchange currently has liabilities worth $8.8 billion. 

Nov. 11: FTX Institutional head resigned just a day after the exchange’s fallout

FTX’s institutional head of crypto, Zane Tackett, reportedly resigned on Nov. 8, the day the whole FTX saga began, according to a document addressed to institutional clients.

The document notes that his team was “completely in the dark” about the firm’s potential insolvency and was assured that the exchange had enough funds to back customer withdrawals.

Nov. 11: Alameda employees resign collectively after a meeting

According to reports citing internal sources at Alameda, all employees at the trading firm quit collectively on Nov. 11 after a group meeting. 

The reports of Alameda employees resigning come just a day after CEO Sam Bankman-Fried said that the operations at Alameda Research would be shut down soon.

Nov. 11: Rumors about the arrest of FTX CEO Sam Bankman-Fried fuel community reaction

The crypto community continues to be bombarded with rumors and conspiracies entering into the fifth day of FTX’s fall. The most prominent one is from Nov. 11 and suggests that Sam Bankman-Fried was arrested on the tarmac at the Bahamas airport.

The founder of the nonfungible token (NFT) project Not Larva Labs was the first to retweet a post of a Flightradar24 map that reported a private jet was grounded for around 40 minutes while on the way to Miami from Nassau — the capital of Bahamas, where FTX is headquartered.

Nov. 11: California regulators to investigate FTX crypto exchange collapse

The state of California’s Department of Financial Protection and Innovation (DFPI) announced on Nov. 10 that it will investigate the downfall of the FTX crypto exchange.

The DFPI encouraged anyone in the state who has been affected by the events of the ongoing FTX saga to call a dedicated hotline. It joined the growing list of U.S. regulators that have joined the investigation against the FTX exchange collapse.

Nov. 11: Bahamas-based FTX account withdraws millions of funds for other users using NFTs

FTX opened withdrawals again on Nov. 10,  but only for users from the Bahamas. In order to help out users from different domiciles, a Bahamian account is reportedly withdrawing funds for others, bypassing the internal balance transfers block by selling nonfungible tokens on FTX’s NFT marketplace.

The Bahamian account creates an NFT,  then the stuck user buys the NFT with their full balance. The Bahamian account then sends the money they paid to a decentralized wallet address of the buyer’s choice.

Nov. 10: FTX assets frozen by Bahamian securities regulator 

The Bahamian securities regulator, the Securities Commission of The Bahamas, froze the assets of FTX’s local entity FTX Digital Markets and “related parties” on Nov. 10 and suspended FTX’s registration in the country.

It cited “public statements suggesting that clients’ assets were mishandled” as the reason for the freeze and determined the “prudent course of action” was to put FTX into provisional liquidation. The Bahamian Supreme Court appointed a provisional liquidator, and FTX assets can’t be moved without its written approval.

Nov. 10: FTX US announces it may halt trading on its platform in a few days

According to a banner at the top of FTX US’ website, “Trading may be halted on FTX US in a few days.” The announcement urged exchange users to “please close down any positions” they may want to close down while assuring its users that “withdrawals are and will remain open.”

Nov. 10: FTX US resigns from the Crypto Council for Innovation

In a statement to Cointelegraph on Nov. 10, CCI CEO Sheila Warren said the council had accepted FTX US’ resignation as an associate member of the group. “We remain committed to working towards building regulation that protects users and safeguards innovation, in order to bring about real change,” said Warren. “The news this week has been shocking, but we’ve also seen the community come together. We have an historic opportunity to get the policies right.”

Nov. 10: Republican lawmaker claims SEC Chair Gary Gensler was coordinating with FTX “to obtain regulatory monopoly”

In a Nov. 10 tweet, Emmer criticized Gensler for “run[ning] to the media” amid FTX’s liquidity issues causing ripples throughout the crypto market. According to the Republican lawmaker, his team was looking into the SEC chair’s alleged collaboration with SamBankman-Fried and FTX, but only cited reports presented to his office as evidence without providing details.

Nov. 10: CZ speaks with thepresident of El Salvador, confirming the country was not exposed to the FTX situation

The CEO of Binance, Changpeng “CZ” Zhao, took to his Twitter account to put rumors about El Salvador to bed, sharing that “the amount of misinformation is insane” and that he “exchanged messages with President Nayib a few moments ago.” He said that President Nayib Buckle told him, “We don’t have any Bitcoin in FTX and we never had any business with them. Thank God!”

Nov. 10: Maxine Waters warns of “major consequences” for users of unregulated crypto firms, citing FTX

The chair of the United States House of Representatives Financial Services Committee pushed for additional federal oversight of crypto trading platforms and consumer protection amid FTX facing liquidity issues.

In a Nov. 10 statement, Waters cited FTX’s difficulties as the latest example of incidents “involving the collapse of cryptocurrency companies” and how such events could potentially impact consumers in the United States. The committee chair pushed for legislation establishing a framework for crypto assets, highlighting her efforts with Financial Services Committee ranking member Patrick McHenry in a bill aimed at regulating stablecoins.

Nov. 10: Blockchain data suggests that FTX may have resumed withdrawals 

The exchange’s hot wallet address, which has remained inactive since FTX announced on Nov. 8 it would be halting all user withdrawals, has resumed activities as of 3:50 pm UTC. Blockchain data shows that multiple types of tokens and large sums of transactions have since left the hot wallet, which has a balance of $469 million at the time of publication.

Nov. 10: Japan’s financial regulator requests FTX Japan halt operations

In a Nov. 10 announcement, the FSA said it had taken administrative actions against FTX Japan following FTX Trading Limited’s suspension of withdrawals “without explaining the reasons clearly to investors.” The financial regulator said it had issued suspension orders and business improvement orders in accordance with Japan’s Payment Services Act and Financial Instruments and Exchange Act.

Nov. 10: Sam Bankman-Fried apologizes over FTX liquidity crisis: “I fucked up twice”

In one of his first public statements since rumors and concerns about FTX’s insolvency flooded the crypto market, CEO Sam Bankman-Fried, or SBF, has said “I’m sorry.” In a Nov. 10 Twitter thread, SBF admitted to investors he “should have done better” in providing transparency on the situation with FTX.

Nov. 10: Sequoia Capital marks down entire $214 million FTX stake to zero

Venture capital firm Sequoia Capital tweeted out a letter sent to its partners on Nov. 10 revealing the firm had marked its $213.5 million investments in FTX and FTX US down to $0, claiming them as a complete loss. The letter says that the crisis facing FTX has “created a solvency risk” but claimed its exposure to the exchange is “limited” in its Global Growth Fund III, where its cost basis for the FTX portion of the fund totaled $150 million.

Nov. 9: FTX website urges against depositing, unable to process withdrawals

FTX’s website experienced downtime on Nov. 9 for around two hours, and when brought back online, it came with a warning strongly advising against depositing and stating that the exchange was unable to process withdrawals.

The warning was further confirmed in a pinned post on FTX’s official Telegram channel, with its administrator saying crypto and fiat withdrawals were affected and that they had “no idea” when it would be back online, saying they also “have a lack of information at this point.”

Nov. 9: SBF reportedly tells investors he needs $8 billion in emergency funding

Reports emerged on Nov. 9 that Bankman-Fried asked investors on a call for $8 billion in emergency funding to cover the “liquidity crunch” caused by user withdrawals over the past few days.

Bankman-Fried reportedly was seeking to raise up to $4 billion from investors and cover the remaining sum with debt financing and even his own personal fortune to make customers whole.

Nov. 9: Crypto market in a sea of red

The crypto market responded to the news with investor sentiment turning fearful and Bitcoin’s price hitting a multiyear low of $15,600. Analysts expected further downside, suggesting Bitcoin could settle around the $12,000 mark.

Nov. 9: Binance officially backs out of the agreement

Less than 48 hours after the initial announcement by Binance CEO Changpeng Zhao that it could move to buy FTX, Binance announced on Nov. 9 that it would not be pursuing the acquisition of FTX.

The exchange cited the reported alleged “[mishandling] of customer funds and alleged US agency investigations,” adding that “the issues are beyond our control or ability to help.”

Nov. 8–9: SBF removes “assets are fine” tweet, FTX websites go dark

On Nov. 8, a few hours after announcing its deal with Binance, FTX CEO Sam Bankman-Fried deleted his accusatory Twitter thread that also claimed FTX and its assets were “fine.” On Nov. 9, the websites for FTX’s venture capital arm, FTX Ventures, and Alameda were taken offline, while unconfirmed reports circulated that FTX’s legal and compliance staff quit on Nov. 8. Reports on Nov. 9 began to surface that Binance is possibly looking to back out of the agreement.

Nov. 8: FTX faces a “liquidity crunch,” moves to sell exchange to Binance

In a shocking announcement, FTX CEO Sam Bankman-Fried said on Nov. 8 that FTX had “come to an agreement on a strategic transaction” with Binance for the exchange to help cover what he called a “liquidity crunch.” He added “all assets will be covered 1:1” and cited this as the main reason FTX asked Binance to step in.

Binance CEO Changpeng Zhao said shortly after that Binance had signed a nonbinding letter of intent to acquire the exchange, but noted that it reserved the right to “pull out from the deal at any time.”

Nov. 8: FTT price and crypto markets start to waiver

Some analysts began to warn on Nov. 7 of a significant price drawdown of FTX Token (FTT) due to the series of announcements, and on Nov. 8, FTT price dove around 30% to around $15.40 from $22 in a matter of hours. The price of Bitcoin (BTC) also started to buckle with fears that FTX could soon be going under.

Nov. 7: CZ refuses Alameda’s over-the-counter deal

Responding to a question on Twitter, Binance CEO Changpeng Zhao signaled his disinterest in taking up the deal earlier poised by Ellison to buy Binance’s FTX Token (FTT) holdings for $22 per token, saying, “I think we will stay in the free market.”

Nov. 7: SBF says “assets are fine,” implores CZ to come together

Shortly after the exchange addressed user concerns, FTX CEO Sam Bankman-Fried fired off a series of tweets, saying a competitor “is trying to go after us with false rumors” and adding that “FTX is fine. Assets are fine.”

Related: Galaxy Digital discloses $77M exposure to FTX, $48M likely locked in withdrawals

He claimed the exchange has “enough to cover all client holdings,” that it doesn’t “invest client assets,” and that it has been “processing all withdrawals, and will continue to be.” Bankman-Fried said FTX had $1 billion in excess cash and called on Binance CEO Changpeng Zhao to “work together for the ecosystem.”

Nov. 7: FTX “bank-run” begins, exchange addresses sluggish withdrawals

With reports and rumors swirling, FTX users began to withdraw their funds from the exchange out of fear it would go bust, and commentators implored those who hadn’t already to get their crypto out of FTX.

Reported data from Nansen on Nov. 7 showed that stablecoin outflows on FTX reached $451 million over seven days, and users began to report sluggish withdrawals on FTX, with the exchange addressing the withdrawal complaints by assuring users everything was running smoothly.

Nov. 6: Alameda CEO offers to buy Binance’s FTT holdings

Shortly after Binance CEO Changpeng Zhao’s Nov. 6 announcement of Binance liquidating its FTX Token (FTT) position, Alemeda CEO Caroline Ellison tweeted at Zhao, saying Alameda would “happily buy it all” for $22 per share.

Nov. 6: Binance moves to liquidate FTT holdings due to “recent revelations”

Later on Nov. 6, Binance CEO Changpeng “CZ” Zhao said his exchange would liquidate its entire FTT holdings, citing “recent revelations that have come to light” believed to be in reference to the Alameda balance sheet. Zhao said Binance held around $2.1 billion equivalent in Binance USD (BUSD) and FTX Token (FTT) due to its FTX divestment last year but didn’t clarify Binance’s current FTT holdings.

He added it would sell the tokens in a way that “minimizes market impact,” expecting the token sales to take “a few months to complete.”

He also confirmed thatthe Nov. 5 transfer of nearly 23 million FTT was part of Binance’s liquidation move.

Zhao added later that the move was “just post-exit risk management” and referred to lessons learned from the collapse of Terra’s LUNA — now Luna Classic (LUNC) — and its market impact as opposed to being caused by a scuffle on Twitter.

Nov. 6: Alameda CEO explains the company’s balance sheet

Alameda CEO Caroline Ellison tried to quell any panic in a Nov. 6 tweet, saying the leaked balance sheet wasn’t reflective of the whole story and noting that the specific sheet was only for “a subset of our corporate entities,” as other assets worth over $10 billion “aren’t reflected there.”

Nov. 5: Trackers pick up significant FTT movement to Binance

On Nov. 5, the Twitter account Whale Alert, which tracks significant on-chain crypto movements, notified its users that nearly 23 million FTX Token (FTT), worth over $584.5 million, moved onto Binance.

At the time, the amount was worth around 17% of FTT circulating supply.

Nov. 2: Reports claim SBF-founded company held significant amounts of FTT

The saga kicked off on Nov. 2 after reports that a leaked balance sheet from the Sam Bankman-Fried-founded trading firm Alameda Research suggested the company held a significant amount of FTX Token (FTT), the native token of the FTX cryptocurrency exchange.

A large trading firm holding so much of one asset concerned the crypto community and led questions regarding the relationship between Alameda and FTX.

Source: cointelegraph.com