FTX
FTX was a major cryptocurrency exchange founded by Sam Bankman-Fried that collapsed spectacularly in November 2022 amid allegations of fraud and mismanagement. The company filed for bankruptcy after it was revealed that billions in customer funds had been improperly transferred to Alameda Research, Bankman-Fried's trading firm.
Luna Terra (LUNA/UST)
Luna Terra was a blockchain ecosystem featuring LUNA tokens and TerraUSD (UST) algorithmic stablecoin that collapsed spectacularly in May 2022. The ecosystem lost over 99% of its value in days, wiping out approximately $60 billion in market capitalization and triggering a broader crypto market crash.
📊Key Statistics
| Metric | FTX | Luna Terra (LUNA/UST) |
|---|---|---|
| Peak Valuation | $32 billion | — |
| Customer Funds Missing | $8 billion | — |
| Bankruptcy Filing Date | November 11, 2022 | — |
| Bankman-Fried Prison Sentence | 25 years | — |
| Number of Affected Customers | Over 1 million | — |
| Peak Market Cap | — | $80+ billion |
| Time to Collapse | — | 5 days |
| UST Peak Supply | — | $18.7 billion |
| Current LUNA Price vs Peak | — | Down 99.9% |
| Estimated Investor Losses | — | $60 billion |
⚡Quick Answers
FTX
FTX collapsed in November 2022 when it was revealed that the cryptocurrency exchange had improperly used billions of dollars in customer funds to cover losses at Alameda Research, Sam Bankman-Fried's trading firm. The company filed for bankruptcy on November 11, 2022, after failing to secure emergency funding. Bankman-Fried was arrested in December 2022 and later convicted on seven counts of fraud and conspiracy in October 2023, receiving a 25-year prison sentence in March 2024.
Luna Terra (LUNA/UST)
Luna Terra collapsed in May 2022 due to a catastrophic failure of its algorithmic stablecoin UST, which lost its $1 peg and entered a death spiral with LUNA tokens. The ecosystem went from a $80+ billion market cap to nearly worthless in just days, making it one of the largest financial collapses in crypto history. Founder Do Kwon was subsequently charged with fraud and became a fugitive before being arrested in Montenegro in 2023.
📅Combined Timeline
All 27 events from 2 stories, chronologically ordered
Terra Blockchain Launch
Do Kwon and Daniel Shin launch Terra blockchain with vision for algorithmic stablecoins. Initial focus on payment systems in South Korea.
FTX Founded
Sam Bankman-Fried and Gary Wang launch FTX as a cryptocurrency derivatives exchange. The platform quickly gains traction among professional traders for its innovative products and user interface.
TerraUSD (UST) Launch
UST algorithmic stablecoin launches with mint/burn mechanism tied to LUNA. Early adoption remains limited to Terra ecosystem.
Anchor Protocol Development
Development begins on Anchor Protocol, which would later offer 20% yields on UST deposits. Protocol becomes cornerstone of Terra's growth strategy.
Anchor Protocol Launch
Anchor Protocol goes live offering nearly 20% annual yields on UST deposits. Attracts billions in deposits and drives UST adoption.
Series B Funding Round
FTX raises $900 million at an $18 billion valuation, making it one of the most valuable cryptocurrency companies. The round attracts major investors including Sequoia Capital and SoftBank.
Miami Heat Arena Naming Rights
FTX secures a 19-year, $135 million naming rights deal for the Miami Heat's arena, rebranding it as FTX Arena. This marks a major push into mainstream marketing and sports sponsorships.
Luna Foundation Guard Formation
Do Kwon establishes Luna Foundation Guard (LFG) to build Bitcoin reserves backing UST. Begins accumulating Bitcoin as additional collateral.
Peak Valuation Reached
FTX completes its Series C funding round, reaching a peak valuation of $32 billion. The exchange is processing billions in daily trading volume and expanding globally.
Super Bowl Commercial
FTX airs a high-profile Super Bowl commercial featuring Larry David, part of a massive marketing campaign that included celebrity endorsements from Tom Brady and Stephen Curry.
LUNA Reaches All-Time High
LUNA token hits $119.18 all-time high with market cap exceeding $80 billion. Terra ecosystem reaches peak popularity and valuation.
UST Begins Depegging
Large UST redemptions cause stablecoin to lose $1 peg, dropping to $0.91. Market begins questioning sustainability of algorithmic mechanism.
Death Spiral Accelerates
UST drops to $0.30 while LUNA crashes over 80%. Massive LUNA minting creates hyperinflation as mechanism fails catastrophically.
Terra Blockchain Halted
Terra validators halt blockchain due to extreme volatility and governance attacks. Both UST and LUNA become virtually worthless.
Terra 2.0 Proposal Approved
Community votes to fork Terra blockchain, creating Terra Classic (original) and new Terra chain without algorithmic stablecoin.
South Korea Issues Arrest Warrant
South Korean prosecutors issue arrest warrant for Do Kwon on fraud and market manipulation charges. Interpol Red Notice follows.
CoinDesk Alameda Report
CoinDesk publishes an investigation revealing that Alameda Research's balance sheet is heavily concentrated in FTT tokens. This report raises questions about the financial relationship between FTX and Alameda Research.
Binance Announces FTT Sale
Binance CEO Changpeng Zhao tweets that his company will liquidate its FTT token holdings due to 'recent revelations.' This announcement triggers massive sell pressure on FTT and withdrawal requests from FTX.
Binance Bailout Falls Through
After initially announcing a potential acquisition of FTX, Binance withdraws from the deal citing due diligence concerns and reports of mishandled customer funds.
FTX Files for Bankruptcy
FTX Trading Ltd. and approximately 130 affiliated companies file for Chapter 11 bankruptcy protection. Sam Bankman-Fried resigns as CEO, replaced by restructuring expert John Ray III.