The FTX Collapse Echoes Scenes From the 2008 Global Financial Crisis

PRELIMINARY STATEMENT

II. BACKGROUND TO ALL MOTIONS

E. The Events of November 2022

In November 2022, there was a run on FTX. The price of FTT, FTX’s exchange token which collateralized certain of the debt held by FTX, unexpectedly collapsed.[8] As with a traditional bank run, numerous customers simultaneously sought to withdraw their assets, thus feeding fears that a collapse was inevitable. FTX sought funding from interim liquidity providers, but ultimately ran out of time to negotiate a deal. The market crash took down many of the major players in this sector, not just FTX. It is a familiar story that echoes the 2008 global financial crisis and prior crises in the U.S. financial system. In the early morning hours of November 11, 2022, Mr. Bankman-Fried stepped down as CEO of FTX. FTX subsequently filed for bankruptcy.

[8] Historical Prices: FTX Token (FTT), COINGECKO, https://www.coingecko.com/en/coins/ftx-token (last visited May 7, 2023).