Everything we know about FTX's collapse: losses are likely >$15B, trades became increasingly risky, SBF was erratic, rash, and relied on stimulants, and more
Reporting before and after the collapse traced a worsening path: Alameda’s significant 2022 losses and a deteriorating relationship with Binance preceded accounts of FTX’s frantic final attempts to sell assets and raise funds. This article adds a more pointed account of the trading risk and leadership conduct behind the scale of the losses.
The coverage also became a dispute over interpretation, with criticism that mainstream outlets did not plainly assess what happened or the potential crimes involved. Bankman-Fried later published his own defense of the collapse, even as former executives had pleaded guilty.
First-order effects
FTX’s estimated losses above $15 billion place greater weight on its increasingly risky trading activity as an immediate explanation for the collapse.
Sam Bankman-Fried’s reported erratic and rash management becomes central to the account of how FTX’s risk exposure was allowed to build.
Competing accounts from employees, chat logs, journalists, and Bankman-Fried turn the collapse into a contest over whose record defines responsibility.
Third-order effects
If the record continues to center on interconnected trading risk and founder control, FTX becomes a durable example of the crypto legitimacy gap: public credibility can unravel faster than a firm’s internal risk practices are understood.
The dispute over coverage points to a broader expectation that crypto failures be examined as governance and accountability events, not only as market collapses.
The trend: FTX is part of a wider crypto-legitimacy-gap trend in which opaque risk-taking and concentrated founder power invite post-collapse demands for clearer accountability.
A source inside FTX shares the alpha on stimulants within the organization: https://twitter.com/...
@autismcapital
@autismcapital on x
EXTRA CONFIRMED: The stimulant patch that Sam preferred was EMSAM, a drug normally used to treat depression or Parkinson's, but used off-label for its alertness and focus benefits. https://twitter.com/...
@autismcapital
@autismcapital on x
We've received confirmation that Sam's drug was actually Emsam. It is a drug normally used to treat Depression and Parkinson's disease but also gives performance enhancing and wakefulness effects. https://twitter.com/...
@moonoverlord
@moonoverlord on x
I'm honestly shocked nobody whistleblew and said what was going on in the Bahamas If you alone told me he had a $40 million dollar penthouse I would have been screaming from the rooftops this guys a fraud and it's BS CT was in the dark
@vydamo_
Yung Dot on x
So Sam was taking Parkinson's medication and he also shakes uncontrollably. Is it possible he just actually has Parkinson's and wasn't riddled on a concoction of other drugs making him shake? https://twitter.com/...
@stephenjudkins
Stephen Judkins on x
I strongly suspect use of various behavior-altering drugs will ultimately explain a lot of recent aberrant behavior of powerful people https://twitter.com/...
@sasuke___420
@sasuke___420 on x
this is actually super weird because Scott Alexander already has a post about which stimulant is the best https://twitter.com/...
@davidgerard
@davidgerard on x
FTX is so weird that I am going to point you at a Slate Star Codex article, in which Scott Siskind writes actually in the area of his professional expertise https://astralcodexten.substack.com/ ...
@avi_eisen
Avraham Eisenberg on x
Reading this and preparing a defense that drinking coffee, a stimulant, shifted risk curves https://astralcodexten.substack.com/ ...
@iamdcinvestor
@iamdcinvestor on x
this was SBF's & Caroline's brains: 🧠 this is their brains on amphetamines: 🍳 this is your portfolio: 0️⃣ any questions?
@telmudic
@telmudic on x
SBF on so many stims here https://twitter.com/...
@minds0n
@minds0n on x
imagine how things would've gone if this was common knowledge https://twitter.com/... https://twitter.com/...
@totlsota
@totlsota on x
what everyone thought: “Alameda Research probably made >$15 billion dollars” what was likely: “Alameda Research probably lost >$15 billion dollars” sign-flips of comprehension on that scale are real humbling how wrong we can be guard & scrutinise what you let in your mind https:/…
@newriverinvest
@newriverinvest on x
this is an absolutely bonkers read and i can't attest to its veracity bc i am so far from crypto but it reads as internally-consistent and plausible and there's not a lot of reaching. it feels a lot like what, to an uninformed outsider, reads like a very good estimate of events. …
@sunjeevbery
Sunjeev Bery on x
Where did all the billions go? A fascinating and obscure blog post attempting to describe what happened at FTX and Alameda under Sam Bankman-Fried. “hardly unsurprising if he indeed was actually operating as a mildly brain-addled compulsive gambler.” https://twitter.com/...
@stevehouf
Steve Hou on x
Excellent almost forensic investigation and accounting of the mind-boggling losses accumulated by FTX/Alameda by @0xfbifemboy https://twitter.com/... https://twitter.com/...
@macrocephalopod
@macrocephalopod on x
Incredible that the most complete and internally consistent account of what happened at FTX/Alameda to date is not the NYT or WSJ or the FT but the blog “milky eggs dot com” written by user “fbi femboy” https://twitter.com/...
@jaimin_building
@jaimin_building on x
Best account I've read so far. On SBF, Alameda and how FTX ended up creating this shitshow It's clear that FTX was a ticking time bomb. Even if CZ had no idea, the longer the malpractice went, the worse it would have got. https://milkyeggs.com/?p=175
@mrjasonchoi
Jason Choi on x
12/ Namely, Alameda moved AWAY from delta-neutral strategies as their edge eroded and began to assume massive directional risks in crypto. They did so on massive amounts of leverage as well. A detailed, subjective account here for you to bookmark: https://milkyeggs.com/?p=175
@0xfbifemboy
@0xfbifemboy on x
Note: This is by and large a compilation of known information from public & private sources that tries to organize it into something resembling a patchwork narrative with enough coherence to explain FTX & Alameda's huge losses. The hard work is thanks to others, not from me!
@0xfbifemboy
@0xfbifemboy on x
In response to the New York Times' shameful coverage of the thief and liar Sam Bankman-Fried, Milky Eggs is here to Correct the Record: https://milkyeggs.com/?p=175
@libevm
@libevm on x
Big if true https://twitter.com/...
@friscojosh
Josh Hermsmeyer on x
This is an unverified but IMO credible accounting of what may have gone down at FTX. It ain't pretty. Incompetent management, negative EV algo trading, chasing number goes up, drug abuse, general degeneracy. https://milkyeggs.com/?p=175
@paulbohm
Paul Bohm on x
The most thorough account of what happened at FTX/Alameda to date: https://milkyeggs.com/?p=175
@smdiehl
Stephen Diehl on x
So to get this straight, the people involved in the FTX scam were all holed up in their Bahamian frat house, in a polycule banging each other, embezzling money while cracked out of their minds on amphetamines. Buckle up, the Netflix series is going to be UNHINGED. https://twitter…