Part 6/12:
However, the foundation of FTX started to crumble when it was revealed that the firm used its own cryptocurrency, FTT, as collateral while secretly funneling billions in customer funds to his trading firm, Alameda Research. Crisis struck in November 2022, when the markets began to panic about the firm's liquidity. Attempts to reassure investors failed, resulting in massive withdrawals that the firm simply could not cover.
Within days, both FTX and Alameda filed for bankruptcy, vanishing billions of customer dollars. Bankman-Fried, once worth an estimated $26 billion, faced legal consequences that culminated in a 25-year prison sentence in 2023, proving that a façade of altruism can often hide nefarious motives.