The Last 10 Days in the FTX Saga: A Timeline

More and more details of the now-insolvent crypto exchange FTX surface every day, and the spillover effects are ever more unfortunate. 

The timeline below tracks major events since the Bahamian police began investigating FTX on Nov. 13 up to the revelations from the latest bankruptcy filings that Sam Bankman-Fried and other executives received personal loans totaling $1.5 billion.

Nov. 14 — Monday: Time out

The sports partnerships continued falling. The Golden State Warriors, the San Francisco-based NBA team, paused all FTX-related promotional deals. Warriors point guard Stephen Curry was a global ambassador for FTX, and FTX US and its NFT marketplace were the Warriors’ official cryptocurrency platform. All these deals ceased to exist. 

This move followed the Miami Heat NBA team ending its naming rights deal with FTX for its home stadium — FTX Arena. Additional partnerships with Major League Baseball to place the FTX logo on the uniforms of umpires and with the Mercedes-AMG Petronas F1 Team to add the FTX logo to the cars and uniforms of drivers were terminated.

Nov. 15 — Tuesday: Another FTX casualty 

Bankman-Fried tweeted on this day that he was going to try “raise liquidity, make customers whole, and restart” as part of a days-long thread. Despite FTX’s Chapter 11 bankruptcy filing, he was reportedly in talks with investors who might help fund the $8 billion that the company owes its traders and institutional clients — but the writing was on the wall. 

Cryptocurrency lender, BlockFi announced it was likely to file for bankruptcy on this day. The firm had earlier begun preventing withdrawals and it disclosed “significant exposure” to FTX the previous day. At one point in July, FTX had planned to acquire BlockFi outright for up to $240 million.

Nov. 16 — Wednesday: Class action lawsuit filed against SBF

The first class action lawsuit against Bankman-Fried was filed on this day, claiming that the insolvent crypto exchange violated Florida law and demanding $11 billion in damages on behalf of its customers. A number of its high-profile backers were named in the lawsuit, including Tom Brady, Gisele Bundchen, Stephen Curry, Shaquille O’Neal, David Ortiz, Naomi Osaka, Larry David and Kevin O’Leary, among others.

Using “the largest and most well-known marketers and celebrities was the only way that this massive fraud could have been successful,” one of the lawyers behind the case told Blockworks.

Also on Nov. 16, crypto lender Genesis, a subsidiary of Digital Currency Group, halted withdrawals to customer redemptions and new loan originations. This move caused the exchange, Gemini, to cease processing redemptions for clients using the Gemini Earn program in partnership with Genesis. Gemini said regular crypto withdrawals, however, are unaffected.

Additionally, Vox published an interview with Bankman-Fried, in which he blamed an ex-employee for malware on a device owned by an ex-employee for the hacking. He also criticized regulators and expressed regrets about filing for bankruptcy.

FTX’s new CEO John J. Ray, III tweeted in response that, “Mr. Bankman-Fried has no ongoing role at [FTX], FTX US, or Alameda Research Ltd. and does not speak on their behalf.” 

Nov. 17 — Thursday: ‘A complete failure of corporate controls’

Ray, who was brought in as a liquidator, stated in a sworn declaration submitted in bankruptcy court that according to FTX’s records, its subsidiary Alameda Research had made personal loans totaling $1 billion to Bankman-Fried and more than $500 million to FTX co-founder Nishad Singh. 

Ray added some harsh words. Despite having been involved in the bankruptcies of Enron: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

Additional insight into the case confirmed that FTX did not comply with security controls with respect to digital assets, misused customer funds, had unaudited financials and almost nonexistent employee management.  

FTX’s local Bahamas arm, FTX Digital Markets, filed for bankruptcy protection in New York on this day. It opted for Chapter 15 bankruptcy, while FTX and 134 affiliate companies opted for Chapter 11 protection. 

Another Digital Currency Group subsidiary, Grayscale, saw the value of its publicly traded Grayscale Bitcoin Trust (GBTC) decline by 20% on Nov. 17.  (GBTC) has persistently traded at a wide discount to the price of the spot bitcoins it holds, with its net asset value (NAV) hovering around 40% below the value of its Bitcoin.

Nov. 18 — Friday: Bahamas regulators custody FTX assets

Securities regulators in the Bahamas confirmed that they’re holding some of FTX’s assets in a press statement released on Nov. 18. They acknowledged transferring assets from of FTX Digital Markets into their custody after an emergency filing from FTX’s U.S. attorneys accused them of having directed former CEO Sam Bankman-Fried to do so. They added that they did not believe that FTX’s Bahamas subsidiary was subject to the US’ Chapter 11 bankruptcy proceedings.

The value of the assets was not confirmed, and it was unclear just how much of the cryptoasset movements could be attributed to actions by Bahamian regulators.

Nov. 19, 20 — Saturday and Sunday: Following the hacking trail

Over this weekend, on-chain analysts observed the FTX hacker, dubbed “FTX Accounts Drainer,” dumping ether for bitcoin. This caused the price of the ether to start dipping. 

The hacker moved ether in different lots — $186 million were moved into crypto cold storage, while $477 million was transferred to ether and stablecoin DAI. 

On Nov. 20, the attacker transferred 50,000 ETH to a separate wallet and then converted it to BTC via renBTC — the Ren protocol bridge.

As the crypto community was monitoring hacked FTX funds, FTX urged exchanges to cooperate by halting funds and returning them to “the bankruptcy estate.”

Nov. 21 — Monday: Pls-help

Etherscan data showed that the attacker moved a total of 180,000 Ether ($199.3 million) on Nov. 21 across 12 wallets. Each newly created wallet received 15,000 ETH. 

By subdividing the total amount into smaller amounts, a process known as “peel chaining,” it not only confuses investigators but suggests the attacker could use a mixing service at some point.

Meanwhile, one user registered as ftx-rekt200k-pls-help.eth, sent an encoded message via ether to the hacker, claiming to have lost money from the FTX collapse and asking for a reimbursement. They even sent 20 transactions of 0.000001 ETH to the hacker’s address.

Nov. 22 — Tuesday: SBF apologizes again, court hears from bankruptcy lawyers

A letter that Bankman-Fried shared with FTX employees was made public on Nov. 22. His opening line states that he feels “deeply sorry about what happened.” Finance journalist Liz Hoffman tweeted screenshots of the letter.

Along with the apologies and a list of collateral and liabilities under the FTX, Bankman-Fried said that “maybe there still is a chance to save the company.”

He did not, however, address allegations that FTX diverted customer and corporate funds to Alameda Research or that he and other executives took personal loans.

“None of this changes the fact that this all sucks for you guys,” added Bankman-Fried.
In the first bankruptcy hearing for FTX and its affiliated entities, lawyers told the court that a “substantial amount of assets” held by FTX cannot be accounted for. FTX now has a cash balance of $1.24 billion in total, they said.

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