NASSAU, Bahamas—Sam Bankman-Fried’s $32 billion crypto-trading empire collapsed in an incandescent chapter final week, prompting irate clients, crypto acolytes and Silicon Valley bigwigs to ask how one thing that appeared so promising may have imploded so quick.
The rising image suggests FTX wasn’t merely felled by a rival, or undone by a nasty commerce or the relentless fall this 12 months within the worth of cryptocurrencies. As a substitute, it had lengthy been a chaotic mess. From its earliest days, the agency was an unruly agglomeration of company entities, buyer property and Mr. Bankman-Fried himself, in keeping with courtroom papers, firm stability sheets proven to bankers and interviews with staff and buyers. Nobody may say precisely what belonged to whom. Prosecutors at the moment are investigating its collapse.