FTX US
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
FTX US was the US-regulated arm of the FTX cryptocurrency empire founded by Sam Bankman-Fried, a separate exchange serving US residents under West Realm Shires Services. It raised $400 million in January 2022 at an $8 billion valuation and, at its peak, the wider FTX group was the third-largest crypto exchange by volume with a $32 billion valuation.
02 / FTX US FAILURE REASONS
Failure factors
Samuel Bankman-Fried allegedly diverted FTX customer funds to Alameda via special privileges and an unlimited customer-funded credit line, concealing the fraud from investors—precipitating the Nov 2022 FTX Group collapse that also felled the U.S. exchange entities (West Realm Shires / FTX US). Distinguish: SEC complaint centers on FTX Trading Ltd (international), but FTX US filed in the same bankruptcy restructuring group after the same liquidity crisis.
SEC alleges diversion of customer funds to Alameda and concealed special treatment precipitating FTX Group collapse.
Alameda allegedly exempted from risk controls and given unlimited customer-funded credit.
03 / EVENT HISTORY
Events in the structured record
- Asset restructuring
West Realm Shires Services Inc. (d/b/a FTX US per court captions) filed voluntary bankruptcy restructuring on 11 Nov 2022 in D. Del. with FTX Trading Ltd. and affiliates; West Realm Shires Inc. parent filed 14 Nov 2022.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In January 2022 FTX US raised $400 million at an $8 billion valuation.
- 02
In November 2022 a CoinDesk report on Alameda Research's FTT holdings triggered a wave of customer withdrawals; a proposed Binance acquisition collapsed after due diligence.
- 03
On November 11, 2022, FTX US filed for Chapter 11 bankruptcy in Delaware alongside FTX.com, Alameda Research and about 130 affiliated companies; Sam Bankman-Fried resigned and John Ray III took over as CEO.
- 04
No reliable loss figure with a clear subject, period and basis exists, so no loss amount is recorded.