FTX Collapsed Because It Was Susceptible to Broader Market Trends

PRELIMINARY STATEMENT

II. BACKGROUND TO ALL MOTIONS

D. Impact on FTX

Ultimately, the fall became too pronounced and FTX was caught up in this same downturn. Like many other cryptocurrency market participants, and many other start-ups that experience exponential growth in a short period, FTX did not have fully developed controls and risk management protocols. FTX, like other market participants, was susceptible to a broader market collapse. Over the course of mid-late 2022, FTX’s and Alameda’s assets steadily depleted as they paid back billions of dollars to their customers and lenders.