The past week may well be the most tumultuous the crypto world has seen yet. In less than seven days, FTX went from industry darling to bankruptcy protection, with its crashing native token FTT spurring a liquidity crisis.
Here’s a timeline of how the dramatic events unfolded. Time stamps are based on when The Block published articles and are in Eastern Standard Time.
Sunday, Nov. 6: Binance plans to sell its FTT position
Monday, Nov. 7: FTX is “fine”
Weekend tensions surrounding FTX seemed like they were simmering down as the week kicked off. Monday started off relatively quietly.
8:05 a.m. - Sam Bankman-Fried says FTX is “fine”
The day started off with FTX CEO Sam Bankman-Fried (SBF) insisting that the exchange is “fine” following Binance’s announcement. "A competitor is trying to go after us with false rumors," Bankman-Fried tweeted. "FTX is fine. Assets are fine. FTX has enough to cover all client holdings. We don't invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be."
3:04 p.m. - FTT price stabilizes
The price of the native FTX token, FTT, appeared to be calming down after intense volatility over the weekend.
10:41 p.m. - FTT token drops sharply
FTX’s native token fell sharply from about $22 to below $18 Monday evening.
Tuesday, Nov. 8: Binance plans to acquire FTX
Tuesday marked a huge milestone for FTX, with Binance making the breathtaking announcement that it planned to acquire the crypto exchange. The news moved markets, prompted companies to start declaring whether they had exposure to FTX and started turning the heads of regulators.
8:52 a.m. - FTX apparently pauses withdrawals
Signs of an FTX liquidity crunch started emerging early, when on-chain data pointed to FTX apparently pausing its withdrawal requests. When The Block reported the news, withdrawals had been stopped for more than two hours.
11:12 a.m. - FTX strikes an acquisition deal with Binance for its non-U.S. business
In a shocking revelation, Bankman-Fried said that FTX had agreed to an acquisition deal with Binance for FTX’s non-U.S. business.
"Our teams are working on clearing out the withdrawal backlog as is,” he tweeted. “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that."
Sources said that FTX had been looking for capital before revealing the deal, seeking a $10 billion-$20 billion valuation.
FTX’s native FTT token jumped 38% minutes after the Binance announcement.
1.12 p.m. - SBF tells employees that withdrawals are effectively paused
Bankman-Fried told employees via Telegram that the exchange had effectively paused withdrawals, Reuters reported.
8:22 p.m. - SBF apologizes to investors
Bankman-Fried apologized to FTX investors for a lack of communication about the proposed deal with Binance, saying that it was still working on a non-binding agreement for Binance to buy the company.
Wednesday, Nov. 9: The deal is off
Binance walked away from the deal to acquire FTX, marking a major turning point in the company’s journey towards bankruptcy.
11:06 a.m. - Crypto markets respond to uncertainty over deal
Crypto markets responded with volatility as the world waited to see whether Binance would go through with the FTX purchase. Bitcoin dipped below $17,000, and several other tokens associated with the FTX CEO dropped sharply. Meanwhile, people were taking large quantities of crypto off of exchanges.
11:11 a.m. - Doubts mount about whether the deal will go through
Blockchain-based predictions market Polymarket raised doubts about whether the Binance takeover of FTX would happen.
12:12 p.m. - Investigators look into FTX’s handling of customer funds and relationship with FTX.US
Bloomberg reported late morning Wednesday that the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) had been investigating FTX. Meanwhile, Semafor reported that most of FTX’s compliance and legal teams left the exchange the previous day.
3:57 p.m. - Binance backs out of the deal
In a major twist, Binance announced that it would not buy FTX after taking a closer look at the exchange’s balance sheet.
"Our hope was to be able to support FTX's customers to provide liquidity, but the issues are beyond our control or ability to help," Binance said in a statement.
4:17 p.m. - Bitcoin losses continue after news of failed deal
Bitcoin continued to lose value after news that the Binance-FTX tie-up wouldn't happen, hitting a low of $16,027.
5:33 p.m. - FTX website becomes unstable
FTX’s international website started going down multiple times, showing an error message to users trying to log on.
5:43 p.m. - SBF explains bankruptcy scenario to investors
With the Binance deal out of the picture, the likelihood that FTX would be heading for bankruptcy became clearer. Bankman-Fried told investors that the company would need to file for bankruptcy if it did not find more cash, Bloomberg reported. The CEO told investors that FTX faced an up to $8 billion shortfall.
9:10 p.m. - The U.S. DOJ and SEC are probing FTX
The U.S. Department of Justice (DOJ) and SEC are probing FTX US, the Wall Street Journal reported.
Thursday, Nov. 10: FTX starts to quickly unravel
9:21 a.m. - SBF says he f*cked up, confirms Alameda trading winding down
Thursday started off with Bankman-Fried apologizing on Twitter. “I'm sorry. That's the biggest thing,” he said in a tweet. “I f*cked up, and should have done better.”
The CEO also added that the company was doing everything it could to raise liquidity, and that the international business had a total market value of assets and collateral higher than client deposits.
Bankman-Fried added that its sister trading firm Alameda Research would be winding down trading.
9:42 a.m. - Tether freezes 46.3 million of FTX USDT after law enforcement request
Tether said it froze $46 million worth of USDT owed by FTX, per law enforcement request.
11:11 a.m. - FTX appears to have resumed withdrawals
On-chain data showed that FTX appeared to have been processing withdrawals again, after they were paused for more than 48 hours. More than $8 million was withdrawn in the first hour, but experts raised questions about where the funds were headed. Zane Tackett, FTX’s former head of institutional sales, later said the company was making withdrawals of funds in the Bahamas to comply with regulators.
Tron and FTX also came to an agreement about withdrawals for several tokens.
11:15 a.m. - FTX reportedly lent Alameda billions in customer assets
The Wall Street Journal revealed that FTX lent about $10 billion to Alameda Research, citing conversations with investors.
1:30 p.m. - FTX US says it could halt trading
One of the first signs that FTX US could also be in trouble was when it said it could halt trading in coming days. The statement came despite comments from Bankman-Fried earlier in the day stressing the U.S. business was separate.
“FTX US, the U.S. based exchange that accepts Americans, was not financially impacted by this sh*tshow,” said one of the tweets.
1:46 p.m. - FTX US leaves D.C. crypto advocacy group
FTX US left the industry trade group Crypto Council for Innovation.
6:30 p.m. - Bahamas securities regulator freezes FTX assets
The Bahamas' securities regulator froze FTX Digital Markets’ assets, a press release circulating on social media showed.
6:45 - More details emerge about FTX equity, assets
News reports continued to emerge with new information about the FTX fallout. A source told The Block that Bankman-Fried sold company equity to employees at a 50% discount in the spring, and Bloomberg reported that FTX US employees were trying to sell various assets.
Friday, Nov. 11: FTX files for bankruptcy
The FTX saga came to a climax on Friday, when FTX and more than 100 corporate entities including those related to FTX US filed for bankruptcy protection.
9:23 a.m. - FTX files for bankruptcy protection, Bankman-Fried resigns
FTX filed for Chapter 11 bankruptcy protection in Delaware, and said it has more than 100,000 creditors. Bankman-Fried resigned. In his place now is John J. Ray III, the attorney who was in charge of the Enron liquidation.
10:54 a.m. - SBF apologizes again
Bankman-Fried apologized yet again for the situation, saying he was “shocked” by how the events played out during the week.
"I'm piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week," Bankman-Fried wrote in a Twitter thread. "I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do."
The Bloomberg Billionaires index showed that the former crypto CEO lost his entire fortune this week — about $16 billion.
With additional reporting from The Block editorial team.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.