FTX Collapse: What Victims Can Do
The November 2022 collapse of FTX, once the world's third-largest cryptocurrency exchange, left over 1 million users unable to access approximately $8 billion in funds.
What Happened
FTX secretly funnelled customer deposits to its affiliated trading firm, Alameda Research. When Binance announced it would sell its FTT tokens in November 2022, it triggered a bank run that exposed the massive shortfall.
Recovery Options for Victims
### 1. Bankruptcy Proceedings
FTX filed for Chapter 11 bankruptcy in the US. Creditors should file claims through the official process managed by Sullivan & Cromwell.
### 2. Regulatory Claims
- UK investors: Check if you qualify for FSCS protection
- US investors: Monitor SEC enforcement proceedings
- International investors: Contact your local financial regulator
### 3. Fund Recovery Services
Professional recovery firms like Patterdale Recovery can trace and pursue fund recovery through blockchain analysis and legal channels.
Timeline
- November 2022: FTX files for bankruptcy
- November 2023: Sam Bankman-Fried convicted on all counts
- 2024: Bankruptcy court begins creditor repayment process
- 2025-2026: Expected continued distributions
Key Lesson
Never store all your funds on a single exchange. Use hardware wallets and diversify across regulated platforms.
