--- aliases: - FTX Trading Ltd. - FTX.com category: AI & Effective Altruism created: 2026-09-22 end: 2022-11-11 relations: - fn: 1 reverse: true start: 2019 type: founded with: '[[Sam Bankman-Fried]]' - end: 2022-11 fn: 6 start: 2022-02 type: funded with: '[[FTX Future Fund]]' - end: 2022 fn: 9 role: 26,786,503 dollars, returned 2024 start: 2022 type: funded with: '[[Effective Ventures]]' start: 2019 summary: Cryptocurrency exchange founded by Sam Bankman-Fried in 2019 whose customer deposits, commingled with Alameda Research, funded political gifts and effective-altruism grants before its collapse in November 2022. tags: - Organization - Cryptocurrency - Fraud - EffectiveAltruism - SamBankmanFried updated: 2026-09-22 --- FTX Trading Ltd., doing business as FTX.com, was a centralized digital-asset derivatives exchange controlled by [Sam Bankman-Fried](/people/sam-bankman-fried/), who also controlled the trading firm [Alameda Research](/organizations/alameda-research/), "a primary market maker on FTX." It held itself out as "the safest and easiest way to buy and sell crypto" and told customers that their assets were held in "custody" and segregated from its own.[^1] It raised "more than $1.8 billion from equity investors," about 1.1 billion dollars of it from some ninety investors in the United States.[^2] ### The Fraud On December 13, 2022, the Commodity Futures Trading Commission, the [Securities and Exchange Commission](/organizations/securities-and-exchange-commission/) and the U.S. Attorney's Office for the Southern District of New York brought parallel charges. The CFTC alleged that from at least May 2019 through November 11, 2022, customer assets "were routinely accepted and held by Alameda and commingled with Alameda's funds," and that Alameda, Bankman-Fried and others had used them for "luxury real estate purchases, political contributions, and high-risk, illiquid digital asset industry investments." At Bankman-Fried's direction, FTX employees wrote into the exchange's code an "allow negative flag" and "effectively limitless line of credit" that let Alameda withdraw billions of dollars in customer assets; the features were not disclosed. The commission put customer losses at more than 8 billion dollars and thanked the Securities Commission of The Bahamas for its assistance.[^1] The SEC charged that the concealment began at least in May 2019 and included Alameda's exemption from the exchange's risk controls and its exposure to "overvalued, illiquid assets such as FTX-affiliated tokens."[^2] Bankman-Fried gave about 40 million dollars in the 2022 election cycle, mostly to Democratic candidates and committees, and later described a parallel stream of undisclosed donations to Republicans; prosecutors charged that the money came from customer funds.[^3] Alameda's chief Caroline Ellison, the FTX co-founder Gary Wang and the engineering head Nishad Singh pleaded guilty and testified against him. A jury convicted him on seven counts on November 2, 2023, and on March 28, 2024, Judge Lewis Kaplan sentenced him to twenty-five years and ordered forfeiture of 11.02 billion dollars.[^4] ### Effective Altruism Bankman-Fried had been drawn into the "earning to give" wing of [effective altruism](/concepts/effective-altruism/) by [William MacAskill](/people/william-macaskill/).[^5] The [FTX Future Fund](/organizations/ftx-future-fund/), launched in February 2022 under Nick Beckstead with Leopold Aschenbrenner, Avital Balwit, MacAskill and Ketan Ramakrishnan, had by June 2022 made 262 grants totaling about 132 million dollars; its team resigned on November 11, 2022, and its grantees then faced clawback claims from the bankruptcy estate.[^6][^7][^8] [Effective Ventures](/organizations/effective-ventures/), the umbrella of the Centre for Effective Altruism, 80,000 Hours and [Giving What We Can](/organizations/giving-what-we-can/), returned 26,786,503 dollars, all it had received from FTX and the FTX Foundation, under a settlement agreed on December 13, 2023.[^9] [^1]: Commodity Futures Trading Commission. "CFTC Charges Sam Bankman-Fried, FTX Trading and Alameda with Fraud and Material Misrepresentations." Release 8638-22, December 13, 2022. https://www.cftc.gov/PressRoom/PressReleases/8638-22 [^2]: Securities and Exchange Commission. "SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX." Press release 2022-219, December 13, 2022. https://www.sec.gov/news/press-release/2022-219 [^3]: "Sam Bankman-Fried donated over $40 million in the 2022 election cycle. Where did it go?" *CBS News.* https://www.cbsnews.com/news/ftx-sam-bankman-fried-political-donations-2022/ [^4]: "Sam Bankman-Fried sentenced to 25 years in federal prison." *CNN,* March 28, 2024. https://www.cnn.com/2024/03/28/business/ftx-sam-bankman-fried-sentencing [^5]: "Sam Bankman-Fried's 'Effective Altruism' Team Resigns Amid FTX Meltdown." *Gizmodo,* November 2022. https://gizmodo.com/sam-bankman-fried-ftx-effective-altruism-crypto-1849773116 [^6]: "Announcing the Future Fund." FTX Future Fund, February 2022. https://forum.effectivealtruism.org/posts/2mx6xrDrwiEKzfgks/announcing-the-future-fund-1 [^7]: "Future Fund June 2022 Update." EA Forum. https://forum.effectivealtruism.org/posts/paMYXYFYbbjpdjgbt/future-fund-june-2022-update ; "The FTX Future Fund team has resigned." EA Forum, November 11, 2022. https://forum.effectivealtruism.org/posts/xafpj3on76uRDoBja/the-ftx-future-fund-team-has-resigned-1 [^8]: "Claw-Back Litigation in FTX Bankruptcy FAQs." Morris James LLP. https://www.morrisjames.com/p/102j9xu/claw-back-litigation-in-ftx-bankruptcy-faqs/ [^9]: "EV updates: FTX settlement and the future of EV." Effective Altruism Forum. https://forum.effectivealtruism.org/posts/HjsfHwqasyQMWRzZN/ev-updates-ftx-settlement-and-the-future-of-ev ; "Effective Ventures Settles $26.8M FTX Donations Case." *The Crypto Times,* January 31, 2024.