FTT: The Token That Brought Down a $32 Billion Empire

On the morning of 2 November 2022, CoinDesk reporter Ian Allison published a leaked balance sheet for Alameda Research, the trading firm owned by Sam Bankman-Fried. It listed $14.6 billion of assets. The largest single line was "unlocked FTT", worth $3.66 billion. Another $2.16 billion was "FTT collateral". More than a third of the firm's wealth was a token that Bankman-Fried's other company, the exchange FTX, had created out of nothing.

Nine days later FTX was bankrupt, about $8 billion of customer money was missing, and the token was worth a few dollars. In October 2026, FTT still trades at about 25 cents.

What FTT was supposed to be

FTX launched in 2019 and grew into one of the largest crypto exchanges in the world: a combined broker and stock market for digital coins, with millions of customers and celebrity adverts. In January 2022 investors valued it at $32 billion.

FTT was its house token, issued alongside the exchange. Holding it worked like a loyalty card: FTT holders paid lower trading fees and earned rewards for locking their tokens up on the platform, the way a bank pays a little extra on a fixed-term deposit. FTX also promised to spend a third of its trading fee income buying FTT on the open market and destroying it, a version of a company buying back its own shares. Fewer tokens and steady demand meant a rising price. On 9 September 2021, FTT peaked at about $84, according to CoinGecko.

The catch was that FTX and Alameda held most of the supply. The price on screens was set by a thin public market, while the companies sat on hundreds of millions of tokens they had never paid for in any real sense. It was the equivalent of a company printing shares, valuing the whole pile at the last trade, and then using that pile as security for loans.

The loan behind the loans

That is what Alameda did. It posted FTT as collateral to borrow from lenders, and, as the trial later showed, it borrowed from FTX's own customers. FTX co-founder Gary Wang testified that the exchange's code gave Alameda a special exemption allowing its account to go negative, backed by a line of credit of $65 billion. Customer deposits that were supposed to sit untouched went to fund Alameda's trades, venture bets, property in the Bahamas and political donations.

As long as FTT held its price, Alameda looked solvent on paper. If FTT fell, the collateral would vanish and the hole would show.

One tweet

On 6 November 2022, four days after the CoinDesk story, Changpeng Zhao, chief executive of the rival exchange Binance, posted that "due to recent revelations" Binance would sell all its remaining FTT. Binance held about 23 million FTT, worth roughly $580 million, a stake left over from its 2021 exit as an FTX investor. Alameda's chief executive, Caroline Ellison, replied publicly that Alameda would buy Binance's tokens at $22 each. To many traders, that offer looked like a company that needed the price to stay above $22.

Customers ran. Roughly $6 billion was withdrawn from FTX in three days. On 8 November FTX stopped paying out, and Binance signed a letter of intent to buy it; the next day Binance walked away, citing what it had found in the books. FTT fell from about $22 to under $3 within days. On 11 November FTX, Alameda and about 130 related companies filed for bankruptcy in Delaware, and Bankman-Fried resigned.

At trial, Ellison said Zhao's tweet "contributed" to the collapse, but the real cause was that Alameda had borrowed about $10 billion from FTX that it could not repay.

The people

Bankman-Fried was arrested in the Bahamas on 12 December 2022 and extradited to New York. On 2 November 2023, a jury convicted him on all seven counts of fraud and conspiracy. In March 2024 Judge Lewis Kaplan sentenced him to 25 years and ordered him to forfeit $11 billion. In June 2026 a three-judge panel of the US Court of Appeals for the Second Circuit unanimously upheld the conviction and the sentence. On 10 September 2026 he asked the Supreme Court to take the case; the government's response is due in November.

Ellison pleaded guilty, testified against him, and was sentenced to two years. She was released from federal custody in January 2026. Wang and Nishad Singh, FTX's head of engineering, also cooperated and were sentenced to time served. Ryan Salame, a former FTX executive, received seven and a half years.

Zhao later had legal troubles of his own: he pleaded guilty in the United States in 2023 to failing to maintain an effective anti-money-laundering programme at Binance, served four months, and was pardoned by President Donald Trump in October 2025. The FTX estate is still suing Binance and Zhao to claw back $1.76 billion paid in 2021 to buy out Binance's FTX stake, much of it in FTT and other tokens; in 2026 Delaware bankruptcy judge Karen B. Owens allowed the core claims to proceed.

The money, and the token today

John J. Ray III, the restructuring lawyer who had cleaned up after Enron, took over FTX on the day of the bankruptcy. In his first court filing he wrote that he had never seen "such a complete failure of corporate controls". His team recovered far more than expected, by selling assets and stakes including shares in the AI company Anthropic.

Payments began in February 2025. By the end of July 2026, after a fourth round of about $2.2 billion in March and a fifth of about $900 million in July, the FTX Recovery Trust had paid out roughly $10 billion. Small creditors have received about 120% of their claims, US customers 100%, and international customers of FTX.com 96%. Those percentages are measured in dollars at November 2022 prices, when Bitcoin was below $17,000. Creditors who had held Bitcoin on FTX received a fraction of what the same coins would be worth in 2026.

FTT itself never died. With no exchange behind it, no fee discounts and no buybacks, it still changes hands on a handful of trading platforms. CoinGecko recorded an all-time low of about 19 cents on 30 July 2026, and in mid-October 2026 it traded around 25 cents, giving roughly 329 million tokens a market value of about $80 million. It is a share certificate in a company that no longer exists, still being traded.