FTX Token ($FTT) Plummets By Over 90% in 7 Days as FTX Files for Bankruptcy

FTX has filed bankruptcy for FTX.com, FTX US, Alameda Research, and about 130 affiliates. At the same time, the CEO, Sam Bankman-Fried is resigning.

FTX token ($FTT), which opened the week at $25.77, has dropped to $2.68 shedding 90.9% in the space of a tough week that has the company filing for bankruptcy.

In the latest event, FTX filed bankruptcy for FTX.com, FTX US, Alameda Research, and about 130 affiliates. At the same time, the CEO, Sam Bankman-Fried, is resigning though he will remain to assist in transition.

Incoming CEO, John J. Ray III, said filing for bankruptcy is ‘appropriate’ to provide FTX the opportunity to develop a process to maximize recoveries for stakeholders, adding FTX has ‘valuable assets that can only be effectively administered in an organized, joint process.’

The market continues to take hits from the situation with Bitcoin down 3% in the last 24 hours. News of bankruptcy may depress the market further, especially beleaguered FTX token ($FTT) now down more than 96% from its ATH of $84.18 in September 2021.


The $FTT token is at the heart of the crisis with the revelation that it occupies a big chunk of sister firm Alameda Research’s balance sheet spooking investors and traders.

Key events during the week that impacted sentiment to further impact FTT’s price include:

  • Nov 6 2022: Binance announces it would be liquidating its $FTT holdings
  • Nov 8 2022: : FTX suspends withdrawals
  • Nov 10 2022: Reports of SEC investigating FTX
  • Nov 11 2022: Binance backs out of deal to acquire FTX
  • Nov 11 2022: FTX CEO resigns as FTX files for bankruptcy

Similarities have immediately risen between $FTT and $LUNA crash which also lost all of its value in the space of a few days back in May 2022. However, the current situation appears less damaging at least for now.

One way to compare the financial losses is using realized loss. This is the loss recognized when assets are sold for a price lower than the original purchase price. Realized loss occurs when an asset that was purchased at a level referred to as cost or book value is then disbursed for a value below its book value.

By November 9 2022, the total realized loss caused by the FTX fallout was around $1.5 billion. However, with the LUNa crash, the market would get more hectic in the aftermath as visualized by the spikes on the graph below:

It is not yet clear what ripple effects FTX’s bankruptcy will have in the next few weeks but Terra’s bankruptcy precipitated industry wide insolvencies. Affected organizations at the time included Celsius, BlockFi, Voyager, and Three Arrows Capital.

Still, while Bitcoin dropped to $17,600, a 2yr low, in June 2022, the FTX crash has driven Bitcoin down past $16,000.




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