Here's What We Know About the FTX Collapse

In the complicated world of cryptocurrency, what should we make of FTX's demise?

In Summary: The cryptocurrency exchange, which had an estimated value of $32 billion earlier this year, recently filed for bankruptcy after freezing customer withdrawals and reports that it spent customer funds on risky investments. That followed a rapid rise from its founding in 2019 to multi-million dollar advertising deals and becoming the world's third-largest crypto marketplace. Because FTX is based in the Bahamas, it's largely shielded from U.S. regulations on trading and selling investments to the public.

By the Numbers: Founder Sam Bankman-Fried is accused of transferring roughly $10 billion of customer funds from FTX to his investing company, Alameda Research. At least $1 billion of customer funds has vanished from FTX. Before the crash, he donated roughly $40 million to Democrats in the 2022 election cycle, making him the party's second-ranked donor behind George Soros. He also made seven-figure grants to news sources such as ProPublica and The Intercept.

What's Next: The Manhattan U.S. attorney’s office is now investigating FTX’s collapse. It's unclear if Bankman-Fried will be charged, but experts agree that the incident will lead to heavier crypto regulation. Currently, no protections exist for those who lost money.

How the Media Covered It: FTX's collapse and corruption have been a focus of coverage across the spectrum. Some right-rated sources questioned whether Bankman-Fried's donations to news companies had made them less likely to investigate him.