Short answers, pulled from the story.
FTX was founded in May 2019 by Sam Bankman-Fried and Zixiao "Gary" Wang. The exchange grew out of Alameda Research, a trading firm Bankman-Fried had co-founded with Caroline Ellison and other former employees of Jane Street in 2017 in Berkeley, California.
FTX collapsed after a November 2022 CoinDesk report revealed that Alameda Research, FTX's sister trading firm, held a significant portion of its assets in FTT, FTX's own exchange token. Binance CEO Changpeng Zhao then announced he would sell Binance's FTT holdings, triggering an estimated $6 billion in customer withdrawals over three days. FTX could not meet that demand and filed for bankruptcy on the 11th of November, 2022.
Sam Bankman-Fried was arrested in the Bahamas on the 12th of December, 2022, at the request of the US government. He was charged by the US attorney's office for the Southern District of New York with fraud, conspiracy to commit money laundering, and conspiracy to violate campaign finance laws. After extradition, he was released on a $250 million bond and placed under house arrest at his parents' home in Palo Alto, California.
Alameda Research was a trading firm co-founded by Sam Bankman-Fried that operated as FTX's sister company. FTX lent approximately $10 billion of customer assets to Alameda in 2022 and used software to conceal the transfers. Alameda also held a secret exemption from FTX's automatic liquidation protocol, shielding it from rules that applied to other traders on the exchange.
Anonymous sources cited by the New York Times said FTX owed as much as $8 billion when it filed for Chapter 11 bankruptcy on the 11th of November, 2022. The Financial Times reported that FTX's balance sheet showed $9 billion in liabilities, with $900 million in liquid assets, $5 billion in less liquid assets, and $3.2 billion in illiquid private equity investments.
A bankruptcy plan approved on the 7th of October, 2024, by judge John Dorsey guaranteed full repayment to customers with balances below $50,000, with cryptocurrency values set as of the date of the collapse. In August 2024, a US court ordered FTX to pay $12.7 billion in total, comprising $8.7 billion in restitution and $4 billion in disgorgement. A court filing from the 8th of May, 2024, stated that most customers would receive their full balances and a surplus.