FTX was a cryptocurrency exchange company founded in 2019, which had over one million users as of February 2022. In November 2022, a CoinDesk article claimed that related company Alameda Research held a significant portion of its assets in FTT, FTX's native token. Following this revelation, the CEO of rival company Binance, Changpeng Zhao, announced that Binance would sell its holdings in the FTT token, which was quickly followed by a spike in customer withdrawals from FTX.

FTX was unable to repay this withdrawal request. This was followed by a subsequent collapse in the price of FTT and a rapid collapse of FTX. Following FTX's aforementioned liquidity crisis, Binance accepted a letter of intent to acquire the company but withdrew the proposal the next day. FTX filed for Chapter 11 bankruptcy protection on November 11, 2022. Sam Bankman-Fried resigned and the CEO job was given to John J. Ray III, an American recovery attorney and CEO funds from bankrupt companies. On December 13, Sam was arrested in the Bahamas and extradited to the United States on charges of bankruptcy fraud and aggravated fraud.