Customers withdrew about $6 billion in three days prior to FTX’s collapse in November 2022. The exchange, which was the second-biggest in the world at the time, halted redemptions, declared bankruptcy, and left over 100,000 creditors with losses of between $10 billion and $50 billion that might never be fully recovered. Sam Bankman-Fried, the founder of FTX, was ultimately found guilty and given a 25-year prison sentence. The crypto era’s defining cautionary tale was the collapse of the exchange. However, the structural factors that initially made FTX susceptible to a run—opaque reserves, user funds placed in ... (full story)