NIGHTEYE

THE FALL OF FTX: THE BIGGEST CRYPTO SCANDAL IN HISTORY

Introduction

In November 2022, the collapse of FTX, a major cryptocurrency platform, sent shockwaves through the crypto industry and the broader financial world. The platform's founder and CEO, Sam Bankman-Fried, was charged with financial crimes and campaign finance violations including wire fraud and money laundering. What happened at FTX stands as one of the most dramatic failures in financial history, exposing deep vulnerabilities in the cryptocurrency industry.

The Rise of FTX

Before its implosion, FTX was a powerhouse in the cryptocurrency world. The platform was known for its user-friendly interface and quickly rose in prominence, growing from $20 million in revenue in 2019 to $1 billion in 2021. The exchange became the third-largest cryptocurrency trading platform by volume and served over one million users worldwide.

FTX's meteoric rise was fueled by aggressive marketing. The company secured naming rights to Miami Heat's arena, ran Super Bowl advertisements, and enlisted celebrity endorsers including sports figures and entertainment personalities. This marketing blitz created an image of a trustworthy, well-managed platform backed by serious money.

How the House of Cards Collapsed

The Trigger: November 2, 2022

On November 2, 2022, CoinDesk published an article revealing that Alameda Research, a crypto hedge fund owned by Sam Bankman-Fried, held a significant amount of $FTT , a token created by FTX. Because FTT cannot be easily exchanged for cash, the report stoked fears about the capital reserves at Alameda Research and thus FTX.

This single article exposed the intertwined nature of FTX and Alameda Research, raising immediate red flags about the safety of customer funds.

The Bank Run

In response to the CoinDesk report, Changpeng Zhao, CEO of rival crypto exchange Binance, announced he would sell all the company's FTT holdings worth $580 million. This major exit from a crypto heavyweight triggered a wider selloff, placing immense pressure on FTX to meet sudden customer withdrawal demands.

The withdrawal requests cascaded rapidly. In a single day, FTX lost billions of dollars as customers rushed to withdraw their funds. On November 8, FTX blocked customers from taking money out by removing that option online, leaving hundreds of thousands without access to their assets.

The Fraud Exposed

According to SEC complaints, Sam Bankman-Fried orchestrated years of fraud by diverting investor funds to his private hedge fund, which used those funds for venture investments, lavish real estate purchases, and large political donations. Bankman-Fried had systematically stolen customer deposits to cover risky trades and personal expenses.

The Bankruptcy and Legal Aftermath

On November 11, 2022, FTX, Alameda Research, and over 100 affiliated entities filed for Chapter 11 bankruptcy protection. Bankman-Fried resigned as CEO and was replaced by John J. Ray III, a bankruptcy specialist best known for overseeing the liquidation of Enron.

Ray's assessment of FTX was damning. Ray stated: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information."

Criminal Charges and Conviction

On November 2, 2023, Bankman-Fried was found guilty on seven federal counts including wire fraud conspiracy, wire fraud, conspiracy to commit money laundering, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud.

On March 28, 2024, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion in forfeiture. Key executives including Caroline Ellison and Gary Wang also pleaded guilty to their roles in defrauding customers.

The Scope of the Fraud

The scale of FTX's collapse was staggering. The collapse exposed an $8 billion hole in FTX's accounts, with FTX owing about $11.2 billion to its creditors and holding an estimated $14.5 to $16.3 billion in assets for distribution.

Additionally, approximately $473 million in funds were later taken from FTX in an "unauthorized transaction" as the platform's security was breached.

Market-Wide Impact

The collapse of FTX sent ripples throughout the crypto ecosystem and beyond. Other cryptocurrency lending platforms like BlockFi, Celsius Network, and Voyager Digital also filed for bankruptcy, directly related to their exposure to FTX and affiliated entities.

As news of FTX's collapse emerged in early November 2022, cryptocurrencies experienced significant declines in value. Tether dropped below its $1.00 peg to $0.97, and Bitcoin sank to its lowest price in two years, triggering institutional skepticism about cryptocurrencies as an asset class.

The Recovery Effort

Despite the massive fraud, there has been good news for affected customers. FTX is planning to send out about $1.6 billion to creditors starting on September 30, 2025, as part of its bankruptcy plan. The FTX repayment process relies on over $15 billion in recovered assets, including sales of stakes in companies like Anthropic and Robinhood.

A Delaware bankruptcy judge approved FTX's reorganization plan in October 2024, which will give 98% of FTX's creditors 119% of their allowed claims as of November 2022—meaning many customers will actually recover more than they originally lost.

Lessons for the Industry

The FTX collapse revealed critical vulnerabilities in cryptocurrency regulation and corporate governance. FTX operated in the Bahamas and sidestepped many regulatory requirements imposed by U.S. authorities. As an offshore company, FTX avoided rigorous financial reporting standards and investor protections that likely would have exposed its commingling of funds earlier.

The scandal has prompted calls for stronger regulation. U.S. Senator Elizabeth Warren noted that the FTX collapse "shows crypto may be more integrated into the banking system than regulators are aware," pushing for regulators to examine links between cryptocurrency firms and banks.

Conclusion

The FTX collapse stands as a watershed moment for the cryptocurrency industry. What began as a platform promising innovation and disruption of traditional finance ended in one of the largest financial frauds in history. Federal prosecutors described it as "one of the biggest financial frauds in American history," comparable to the Enron scandal and Bernie Madoff investment scheme.

While the recovery effort offers hope for affected customers, the FTX collapse has left lasting scars on the crypto industry's reputation and highlighted the urgent need for better regulation, corporate governance, and investor protections. As the industry moves forward, the lessons learned from FTX will likely shape cryptocurrency regulation for years to come.

Article Date: February 10, 2026

Based on: Public filings, court documents, and news reports through late 2025

@CZ
#FTX

In the ever-chaotic world of Solana meme coins, one token has been stealing the show lately: $PIPPIN — the whimsical, AI-generated unicorn that's turned from a fun experiment into a serious market mover. The PIPPIN/USDT pair is lighting up trading screens across centralized and decentralized exchanges, with massive volume and eye-popping gains driving FOMO across crypto Twitter. 🚀

As of February 10, 2026, here's the latest snapshot:

- Current Price: ~$0.35 – $0.37 USD (with 24-hour surges hitting +30% to +45% in strong sessions) 📈
- 24-Hour Trading Volume: $40M – $50M+ (sometimes spiking higher during pumps) 🔥
- Market Capitalization: Approximately $350M – $375M 🏦
- Circulating / Total Supply: 1 billion tokens (fully unlocked, no hidden mints) ♾️
- All-Time High: Around $0.61 (reached late 2025) 🌕
- Recent Performance: Strong weekly momentum, often reclaiming key levels like the 200-period MA on charts.

Data pulled from trackers like CoinMarketCap, CoinGecko, and on-chain sources shows consistent buying pressure, especially on the PIPPIN/USDT spot and perpetual pairs.

The Magical Origin Story of PIPPIN 🦄🍄
PIPPIN was born from a creative spark by Yohei Nakajima, the mind behind BabyAGI — one of the earliest and most influential open-source autonomous AI agent frameworks (launched back in 2023 with huge GitHub traction). Using advanced LLMs like ChatGPT-4o, Yohei generated a simple SVG unicorn... and the AI named it Pippin all on its own! 😍

What started as a lighthearted social media post exploded when the community launched it on Solana via pump.fun mechanics. Contract address: Dfh5DzRgSvvCFDoYc2ciTkMrbDfRKybA4SoFbPmApump.

The lore is pure charm:
"Just a wobbly little unicorn, listener of whispers, chaser of sunbeams, friend to mushrooms." 🌈🍄

The project mixes adorable meme vibes with real AI agent experimentation — positioning Pippin as an autonomous digital character active on X. Official hub: pippin.love 💕 — full of gentle, enchanting storytelling under "Wobbly Worlds."

Trading Hotspots & Liquidity ⚡
PIPPIN/USDT dominates activity on:
- CEX giants like Gate.io (top spot volume), MEXC, Bybit, Binance Futures, OKX, LBank, BitMart, CoinEx
- DEX: Raydium (PIPPIN/SOL pools see huge liquidity flows)

Perps on Bybit, Binance, and OKX add leveraged fuel to the fire, pushing open interest higher during rallies.

What's Fueling the Fire Right Now? 🌟
- Killer narrative combo: AI agent + cute unicorn + credible founder (Yohei is followed by big names in tech/VC) 🧠🦄
- Solana meme season still raging — fast txns + low fees = perfect pump environment
- Viral community energy, whale accumulation, and endless FOMO cycles on X 📣
- Shift from "pure meme" to "utility meme" with ongoing AI framework experiments

The Reality Check ⚠️
Meme coins = extreme rollercoaster rides. PIPPIN has seen 50%+ drawdowns before and relies heavily on hype & sentiment. High supply concentration among early holders/whales means sharp dumps are always possible. DYOR, manage risk, never go all-in, and enjoy the ride responsibly! 🎢💸

For now, this wobbly unicorn is galloping hard in early 2026 — blending AI dreams with meme coin madness. Will it keep mooning or take a breather? The charts (and community) are watching closely.

What do you think, Moon incoming or pullback ahead? 🌙✨ Drop your take! 😄

🦄
$pippin , $BULLA , $SOL