FTX's Rapid Rise and Fall: A Timeline of Events and Key Investors

FTX's Establishment and Growth

FTX, founded in May 2019 by former Wall Street trader Sam Bankman-Fried and ex-Google employee Gary Wang, quickly emerged as a prominent cryptocurrency exchange. By 2021, FTX had achieved significant milestones, including a $900 million funding round that valued the company at $18 billion. This was followed by high-profile partnerships, such as a sponsorship deal with Mercedes' Formula 1 team, and a valuation increase to $25 billion after raising capital from investors like Singapore's Temasek and Tiger Global.

Expansion and Strategic Deals

The year 2022 marked further expansion for FTX, with its U.S. arm being valued at $8 billion after a $400 million funding round. The company also secured a $135 million sponsorship deal for the Miami Heat's home court naming rights and considered acquisitions, including a deal with BlockFi and a partial bailout offer for Voyager Digital.

Challenges and Downfall

Despite its rapid growth, FTX faced significant challenges. In August 2022, a U.S. regulator ordered FTX to stop making misleading claims about government insurance on funds. By November, reports surfaced about Alameda Research's dependency on FTX's native token, FTT. Binance's CEO announced plans to liquidate Binance's holdings of FTT, further destabilizing FTX.

Bankruptcy Proceedings

The situation deteriorated quickly, with FTX suspending operations for new clients and withdrawals. Attempts to secure a rescue package were unsuccessful, leading to voluntary Chapter 11 bankruptcy proceedings in the U.S. on November 11, 2022. This included FTX, its U.S. unit, Alameda Research, and other affiliates. Bankman-Fried resigned as CEO amidst reports of significant customer fund losses and unauthorized transactions.

Key Investors

FTX's investor list over the years included notable entities such as Tiger Global Management, SoftBank, Sequoia Capital, and BlackRock. The wide range of investors showcased the extensive financial backing and trust the company initially garnered before its downfall.

FTX's rapid rise and sudden collapse have sent shockwaves through the cryptocurrency industry, prompting increased scrutiny and regulatory investigations.