FTX
CollapsedExchange · $FTT · born 2019 · ✝ 2022
The exchange built on borrowed customer money.
Once the world's second-largest crypto exchange, FTX imploded after revelations that customer funds were funneled to its sister trading firm Alameda Research.
- Peak
- $32B valuation
- Cause
- Collapsed
- Year of death
- 2022
☠️ Cause of death
Commingling of customer deposits with Alameda Research, a leverage spiral on its own FTT token, and a liquidity run after the balance sheet leaked.
📓 Lessons left behind
- —An exchange is a custodian first — segregate customer assets, always.
- —A token you mint is not collateral.
- —Self-reported reserves are not proof of reserves.
🌱 The idea that survived
Proof-of-reserve exchanges
Exchanges that publish cryptographic proof of reserves and segregate custody (Coinbase, Kraken) absorbed the trust FTX vaporized.
#custody#leverage#fraud