On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the US court system. This decision was prompted by public concern over the company's financial stability, which began with an article published by CoinDesk in November 2022. The article revealed that FTX's partner company, Alameda Research, held a significant portion of its assets in FTX's native token (FTT). In response to this information, rival exchange Binance's CEO, Changpeng Zhao, announced that Binance would sell its holdings of the FTT token. A spike followed this in customer withdrawals from FTX, which the company could not meet.
To help customers recover their assets, Binance signed a letter of intent to acquire FTX and initiated due diligence on the company. However, the next day Binance withdrew its offer, citing reports of mishandled customer funds and investigations by US agencies. On December 12, 2022, FTX CEO Sam Bankman-Fried was arrested by the Bahamian authorities on financial offenses at the request of the US government.
Since filing for bankruptcy, FTX has been working to restructure its business and pay back its creditors. In addition, the company has faced significant legal challenges, including a class-action lawsuit filed by disgruntled customers who lost money due to the bankruptcy. Despite these challenges, FTX has continued operating and maintained a strong presence in the cryptocurrency industry.