Here's a quick explainer of what happened with crypto giant FTX — and how the wingnuts are lying about it

If you are online or have paid a little bit of attention over the past week, you’ve probably heard about FTX (short for “Futures Exchange”) and its various connected companies crashing and burning in the marketplace. What does it all mean? To be completely honest, it is mostly crypto Ponzi scheme magic unfolding in real time. On Nov. 11, FTX CEO Sam Bankman-Fried (who is also known by the moniker “SBF”) announced he was stepping down and his crypto exchange was filing for bankruptcy. On Wednesday, FTX Digital Markets, based in the Bahamas, filed for Chapter 15 bankruptcy protections in New York. Chapter 15 is what you do when you want U.S. protections for a company that is “based” offshore.
FTX had been touted as, The New York Times puts it, “the most stable and responsible companies in the freewheeling, loosely regulated crypto industry.” In January it was valued at an estimated $32 billion. It turns out that this reputation was based on … nothing. It was based on magic. It has very quickly unfolded that the unregulated crypto exchange, with “digital assets” in a range between $10 billion and $50 billion,* was giving out billions in loans using customers’ money and just doing all sorts of (alleged) securities fraud, regular fraud, banking fraud, and wire fraud behavior. 

Here's a quick explainer of what happened with crypto giant FTX — and how the wingnuts are lying about it