On November 11, 2022, prominent cryptocurrency exchange FTX and its U.S. counterpart FTX.US filed for Chapter 11 bankruptcy. Former founder and CEO Sam Bankman-Fried was arrested in the Bahamas on Dec. 12 and extradited to the U.S. to face eight criminal accusations, including wire fraud and conspiracy to deceive investors. 

Bankman-Fried used customer cash as a "personal piggy bank" for real estate and political campaign donations, according to an SEC complaint. John J. Ray III, former CEO of Enron, is now FTX's CEO. Ray described FTX's finances as "total failure of corporate controls" and "full absence of trustworthy financial information" in the bankruptcy petition on Nov. 17. Cryptocurrencies and exchanges with FTT or FTX exposure suffer price drops and financial problems after FTX's fall. 

FTX and FTX.US fell owing to liquidity issues and fund mismanagement, followed by investor withdrawals. FTX's native token, FTT, fell, dragging Ethereum and Bitcoin down to a two-year low on Nov. 9. FTX collapsed other exchanges, notably BlockFi, which filed for bankruptcy on Nov. 28.

FTX’s troubles have had a profound effect on the U.S. crypto market:

• Bitcoin's price dropped below $16,000 twice in November due to FTX's issues. Bitcoin exchanges lost $3.2 billion between Nov. 8 and 15. 
• On Nov. 9, Ethereum fell below $1,100. 
• On Nov. 9, CoinDesk reported that Alameda held a lot of Solana, sending it below $13. On Nov. 13, Solana fell below $13, losing approximately $700 million in assets. 
• On Nov. 10, Tether devalued by 3%. 
• Investing in cryptocurrency is dangerous. Diversifying your cryptocurrency holdings reduces risk.