What it was
FTX Trading Ltd., trading as FTX.com, ran a crypto exchange with a large derivatives business. The Second Circuit's 2026 opinion dates its founding to 2019 and describes Alameda Research, founded in 2017, as a separate trading firm controlled by the same person. The SEC describes FTX as based in the Bahamas and states that it raised more than USD 1.8 billion from equity investors from May 2019 onwards, about USD 1.1 billion of it from roughly 90 investors based in the United States.
What happened
The exchange held customer deposits. Alameda used them. The Second Circuit summarised the trial record as fraud "related to the operation of his cryptocurrency exchange and his cryptocurrency trading firm", and the Justice Department describes the conduct as misappropriating customer funds deposited with FTX, defrauding FTX investors of more than USD 1.7 billion and defrauding Alameda's lenders of more than USD 1.3 billion.
FTX Trading Ltd. and its affiliates filed for Chapter 11 on 11 November 2022. The plan of reorganisation became effective on 3 January 2025, which was also the record date for the first distribution to creditors in the convenience classes. The estate continues to distribute; the operating business does not exist.
On the record
On 2 November 2023, after a one-month trial before US District Judge Lewis A. Kaplan in the Southern District of New York, a jury convicted Samuel Bankman-Fried, FTX's founder and chief executive, on two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud and one count of conspiracy to commit money laundering.
On 28 March 2024 Judge Kaplan sentenced him to 25 years in prison, three years of supervised release, and forfeiture of USD 11 billion, and authorised the government to use forfeited funds to compensate victims.
On 12 June 2026 the US Court of Appeals for the Second Circuit affirmed the judgment, rejecting challenges to the evidence, the jury instructions, discovery and the forfeiture order. Its disposition is one line: "we AFFIRM the judgment of the district court."
The Securities and Exchange Commission also sued Bankman-Fried in December 2022 over the same conduct. Listing here is not endorsement.