- Sam Bankman Freed, a 30-year-old billionaire, rose to fame as a cryptocurrency entrepreneur and was compared to Warren Buffett.
- His cryptocurrency exchange, FTX, became one of the largest in the world, attracting millions of users and billions of dollars in investments.
- However, FTX suddenly collapsed, with $8.9 billion in customer funds missing, leading to accusations of fraud.
- Bankman Freed's charismatic personality and celebrity endorsements, including Tom Brady and Larry David, helped build trust in FTX.
- The collapse of FTX was triggered by the revelation that a significant portion of the exchange's assets were tied to a token called FTT, which was not widely distributed and manipulated in price.
- Customers who lost money on FTX are devastated and seeking answers, while Bankman Freed has only offered an apology so far.

- SBF manipulated the price of FTT by having Alameda buy large amounts of the token, creating a potential house of cards situation.
- Alameda used FTT as collateral for loans, exposing themselves to significant financial risks.
- Several major lenders of Alameda go bankrupt after a crypto market crash.
- FTX customers become concerned after a tweet from Binance's CEO announcing the liquidation of FTT.
- Bankman Freed publicly denies any problems at FTX while privately seeking sources of financing.
- FTX and Alameda file for bankruptcy.
- Bankman Freed spends time in the Bahamas before attempting to broker a bailout.

- Bankman Freed admits to making mistakes and would do things differently
- FTX customers are not convinced and have lost respect for him
- Bankman Freed is arrested and facing federal charges for stealing billions from FTX customers
- Lack of record keeping and control over finances discovered at FTX
- Employees and investors were unaware of the true financial health of the company
- Bankman Freed's close associates plead guilty and cooperate with authorities
- Recovery process has so far yielded $7.3 billion in assets, but the case is expected to be lengthy and complex.

- FTX customers in Japan have been able to withdraw 6.6 billion yen, while other customers may have to wait longer to get their money back.
- Some customers are suing FTX's celebrity endorsers, claiming they should be liable for promoting FTX as a safe investment.
- Some customers are selling their bankruptcy claims for a small percentage of their value to get cash now.
- The highly specialized investigators working on the FTX bankruptcy are billing high fees, with over $200 million requested in fees so far.
- Customers have not received any money back from FTX yet, but their faith in crypto remains strong.
- Sam Bankman-Fried, the founder of FTX, has been accused of financial crimes and has pleaded not guilty.
- Customers express disappointment and a desire for Bankman-Fried to serve his time and make amends for the losses suffered.

- Sam Bankman Freed, a billionaire cryptocurrency entrepreneur, built FTX into one of the largest exchanges globally.
- FTX collapsed with $8.9 billion missing, leading to fraud accusations and devastated customers.
- Bankman Freed's charisma and celebrity endorsements helped gain trust in FTX.
- The collapse was triggered by assets tied to a manipulated token called FTT.
- Bankman Freed has apologized, but customers are seeking answers.
- FTX and Alameda filed for bankruptcy, and Bankman Freed is facing federal charges.
- Recovery efforts have yielded $7.3 billion, but the process is expected to be complex.
- Some customers are suing celebrity endorsers, while others are selling their bankruptcy claims.
- Highly specialized investigators are billing high fees, and customers have not received any money back yet.
- Bankman Freed has pleaded not guilty, and customers want him to serve his time and make amends.

Former billionaire, Sam Bankman-Fried, saw a meteoric rise as crypto's golden boy and an even more spectacular fall from grace as his $32 billion cryptocurrency exchange, FTX, collapsed in a matter of days. FTX customers and investors around the world watched in shock as a single tweet ignited a series of events that ended with the former crypto titan facing a dozen federal charges and waiting for trial behind bars. FTX customers, investors and employees were devastated to learn that $8.9 billion dollars in customer’s funds went missing from the exchange.

In this documentary, CNBC’s Kate Rooney speaks to the people most impacted by the fall of Bankman-Fried’s crypto empire. The in-depth documentary includes a candid interview with former President of FTX US who reveals what it was like to work directly for Bankman-Fried and what red flags concerned him most about the company.  FTX investor, Anthony Scaramucci, tells all about his front-row seat to the collapse and what it was like to visit SBF while his empire was crumbling around him.

Rooney’s reporting also uncovers first-hand accounts from FTX customers who share the impact of their catastrophic losses, and pull no punches when discussing what lured them into SBF’s house of cards. And far beyond SBF’s rise and fall, the documentary explores the battle that lies ahead over the missing billions, and whether customers will ever get any of their money back.

Chapters:
00:00 – Introduction
02:43 – The rise of SBF
07:40 – FTX implodes
16:01 – Bahamian hideaway
25:37 – The missing billions
31:46 – Recovering the cash

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The Collapse Of FTX: Insiders Tell All | CNBC Documentary

1 of the richest people on the planet and certainly 1 of the youngest rich people on the planet.

He was on the cover of Fortune this year being compared to Warren Buffett.

30-year-old billionaire Sam Bankman Freed, better known as SBF, saw a meteoric rise as crypto's golden boy.

The more time I spent with Sam, the smarter I felt that he was.

My goal is to be able to donate almost everything that I make.

A seemingly altruistic billionaire looking to have a big impact.

Like I care about the impact that I have.

He struck me as somebody that was really trying to do something transformative.

Which is why the crypto scandal that engulfed him shocked the world.

News overnight, Sam Bankman-Fried is now in custody in the Bahamas.

His $32 billion cryptocurrency exchange, FTX, goes bankrupt in a matter of days.

$8.9 billion in customer funds are missing.

I thought he was the Mark Zuckerberg of crypto.

Top minds on Wall Street, Silicon Valley venture capitalists, A-list celebrities, and millions of crypto traders flocked to FTX, trusting Bank Midfreed with their money.

I lost over 2000000 dollars on the FTX platform when it went down.

Now FTX customers who lost millions are sharing their stories.

Not only how it's affected me, but how it's affected millions of people globally.

Investors who gave FTX tens of millions in capital are speaking out.

And the former president of FTX US, who resigned less than 2 months before its collapse, tells all.

What Sam did was old-fashioned financial fraud.

So far, all anyone has from Bankman Freed is an apology.

I'd never lost that much money that amount of time before.

This was probably 1 of the most scariest times, like, ever.

If this was an entrepreneur, he could have done really great things.

with an entity like FTX, red flags beyond any that

I'm probably going to have to file for bankruptcy.

A stone's throw from the turquoise water and pristine beaches in the Bahamas, Sam Bankman Freed sets up FTX headquarters in Nassau.

I think They had 3 or 4 what effectively looked like suburban office buildings that they were conjoining.

Looked like a very large trading floor, too, just similar to what you would see on Wall Street.

In less than 2 years, this little office park in the Bahamas becomes home to 1 of the largest cryptocurrency exchanges in the world, built by traders for traders.

It was probably the best platform out there in terms of user experience.

More than 5 million users flocked to the exchange, according to FTX, and they were trading big money.

You know, we have 10, 15 billion dollars of daily trading volume on the platform.

From Wall Street to Silicon Valley, some of the smartest money becomes desperate to get in on the action.

And he was a industry leader and a first mover in cryptocurrency exchanges.

He had a big vision for the future and he was minting money.

Investments in FTX pour in, totaling nearly $2 billion.

I think their impression was Sam was the ideal tech founder who had landed on a gold mine.

He had this way of making everyone really want him to succeed.

He was this person who was incredibly smart, he was ambitious,

he was well pedigreed, he had gone to MIT, his parents were Stanford University professors, He had worked at Jane Street, an organization that everybody on Wall Street respects.

And so that combination of things is a pretty interesting thing.

For retail trader Sunil Kavuri, who's worked in traditional finance at Morgan Stanley and J.P.

Morgan, hearing about these investments gave FTX major street cred.

He raised a significant amount of funds, about $900 million from Sequoia, Paradigm.

I thought, OK, this is a very safe, institutionally backed exchange.

Crypto enthusiast Evan Luthra does the same.

I was aware about all the VCs that are invested in FTX and that is also building a lot of trusts.

Seemingly out of nowhere, Bankman Freed and FTX start becoming the biggest names in crypto.

This is a tale as old as time to some degree.

Some young charismatic guy in Bermuda shorts with the floppy hair charmed the 20 best investors in the world.

The young billionaire crypto titans overnight success featured in magazines and on TV.

In the otherwise secretive world of crypto where the owners of exchanges are camera shy, Bankman Freed stands out, welcoming the publicity.

I would say it definitely played a little bit of a role that we knew who was actually behind FTX.

I think what really gave him credibility was The exponential profits he was making for the investors and the billions of dollars he was throwing around like monopoly money.

The co-founder of FTX is spending millions promoting the exchange with high profile celebrity endorsement deals to bring in more and more customers.

More sports teams, more sports celebrities, you know, different kinds of properties that we could put our name on.

NFL superstar Tom Brady becomes an investor and is featured in FTX commercials.

FTX is the safest and easiest way to buy and sell crypto.

Comedian Larry David stars in a Super Bowl ad that cost millions.

FTX is a safe and easy way to get into crypto.

For FTX, the first time I heard about it was on the Super Bowl ads.

I was like, oh my goodness, there's all these big name people utilizing FTX.

All the A-list names associated with FTX gives customers the impression there's been ample due diligence done on the exchange.

Did the celebrities make me feel more comfortable about using FTX?

But in reality, everyone involved is gambling on the success of FTX and placing their trust in its founder.

Remember, when you're talking about a venture capitalist, you're talking about a risk taker with capital, you're going to go 1 for 10, you're going to go 1 for 15.

And in that 1, you may find the Google or the Facebook.

And so Sam was 1 of those 1 for 15 or 1 for

But customers placing their faith in the exchange have much more to lose.

The money was meant to be used for buying a house.

I don't want to just have to part with it.

the entire operation unravels in just a few days.

The implosion of FTX begins in the suburbs of Chicago.

Nick Baker, the editor-in-chief at Coindesk, a crypto news website, is working from home when 1 of his reporters reaches out with a story.

Ian Allison, our reporter, started hearing Alameda, this trading firm owned by Sam Bankman-Fried, may not be on the most solid financial footing.

As a journalist, you hear a tip and that's great, but the challenge is, well, then how do you prove that?

They confirmed the tip with a leaked copy of Alameda's balance sheet.

What the document showed was that in a very powerful way that there was a very strong financial entanglement between those 2 companies.

Their article goes live on November 2nd, exposing for the first time that nearly half of the $14.6 billion in assets on the balance sheet of Bankman Freed's secretive crypto hedge fund were listed as FTT tokens, a digital currency Bankman Freed and his co-founders created for FTX customers back in

That's a red flag potentially because it tells you that so much of this empire is supported on a foundation of money that comes from a sibling company.

To better understand why that revelation leads to the collapse of FTX, you need some background on FTT.

The FTD token is basically the token for the platform FTX.

The benefits you get from the FTT token is you get reduction in trading fees.

I invested about $200,000 in the FTD token.

SPF would regularly show that he was personally buying FTT token.

When FTT first hits the market in July of

And in November of 2022, it's trading around

The idea was to give people almost like an equity like stake in FTX.com if you were someone outside the U.S.

But Harrison and FTX customers say they didn't know the FTT token was not widely distributed, which is key to having the market determine its price.

A substantial portion of all the FTT tokens in existence were sitting on the balance sheet of Alameda.

According to the criminal complaint, SBF engineered the price of FTT by directing Alameda to buy large amounts of the token to maintain its price.

Alameda could not have sold its billions of dollars of FTT tokens without crashing its price.

Their presence there, there's such a substantial presence on that balance sheet, was a suggestion that perhaps this is a house of cards.

To make matters worse, Alameda began using it as collateral to obtain billions of dollars in loans from third-party lenders, leaving Alameda exposed to significant financial risks, according to the complaint.

And by the summer of 2022, several of Alameda's major lenders go bankrupt after a $2 trillion crash in the crypto markets.

It was probably an opportunity for Sam to say, wow, I just got smoked out alongside of Terraluna and Celsius and 3 Arrows.

I'm shutting down Alameda and I'm going to focus all my energy on FTX.

I think if he had done that, I don't think we'd be in this situation.

Instead, at the direction of Bankman Freed, Alameda greatly increased its usage of FTX customer funds to meet its external debt obligations, according to the CFTC.

FTX customers are completely in the dark about what's happening with their money.

Their first indication there could be problems at FTX happens on November 6.

4 days after the CoinDesk article reveals the billions of dollars worth of FTT tokens on Alameda's balance sheet, 1 of FTX's biggest investors gets spooked.

The CEO of Binance, the world's largest cryptocurrency exchange who goes by his initials CZ, makes an announcement in a tweet to his 7 million followers saying, we have decided to liquidate any remaining FTT on our books.

And recently, with the news of them becoming insolvent carried by CoinDesk first, we just said, well, we want to sell those tokens.

Discuss the management's ethical responsibilities, their role in risk management, and potential breaches of trust. 

Outline the establishment, business model, and growth of FTX, as well as the role of cryptocurrency in financial markets

Evaluate the financial practices, accounting treatments, and corporate governance failures that contributed to the collapse. 

Provide an overview of the FTX collapse, its relevance, and the key parties involved in minimum 450 words

Provide an overview of the FTX collapse, its relevance, and the key parties involved.

See all CNBC transcripts on Youtube

The Collapse Of FTX: Insiders Tell All | CNBC Documentary