What happened
FTX told the public that customer deposits were held in custody, kept separate from company assets, and that its affiliate Alameda Research had no special access. The US Department of Justice says those statements were false and that code changes let Alameda withdraw effectively unlimited amounts.
FTX Trading Ltd. and 101 affiliates, including FTX Canada Inc., filed for Chapter 11 on November 11 and 14, 2022. Founder Samuel Bankman-Fried was convicted on November 2, 2023 and sentenced to 25 years on March 28, 2024.
On December 12, 2022, following these events, the CSA required platforms operating while seeking registration to hold Canadian clients’ assets with an appropriate custodian, segregate them and offer no margin or leverage.
Scale, from official records
- Over US$8 billion of customer money stolen (US DOJ, 2024-03-28)
- US$75 million + US$20 million invested by Ontario Teachers’ Pension Plan, written down to zero (Ontario Teachers’ statement, 2022-11-17)
The Canadian angle
FTX Canada Inc. is a debtor in the US bankruptcy (Case No. 22-11117). A pending FTX deal to acquire Calgary's Bitvo was terminated, and the Ontario Teachers' Pension Plan wrote its US$95 million investment down to zero. The CSA tightened Canadian platform rules in December 2022 and February 2023, naming the FTX group.
What broke
Commingling and misappropriation of customer deposits by an affiliated trading firm, a hidden code exception, false statements about segregation and concentrated control.
What a user could have checked
- Whether the platform was registered in Canada or had filed a pre-registration undertaking.
- Whether it had an independently verifiable custodian with segregated client assets.
- Whether it was affiliated with a trading firm that could be its customers' counterparty.
Recovery
The debtors said that under the confirmed plan (effective January 3, 2025), 98% of creditors by number would receive about 119% of their allowed claims (debtors’ own figure). Check how allowed claims were valued before comparing with today’s crypto prices.
Sources
- FTX Trading Ltd., Case No. 22-11068 — Kroll Restructuring Administration (claims agent)
Supports: Petition dates; FTX Canada Inc. Case No. 22-11117; effective date 2025-01-03 · checked 2026-11-01 - Samuel Bankman-Fried sentenced to 25 years — US Department of Justice, 2024-03-28
Supports: Over $8B customer money, false segregation claims, Alameda code exception, sentence · checked 2026-11-01 - Ontario Teachers' statement on FTX — Ontario Teachers' Pension Plan, 2022-11-17
Supports: US$95M investment written down · checked 2026-11-01 - Bitvo announces termination of pending transaction with FTX Canada — Bitvo Inc. (company release), 2022-11-15
Supports: Terminated acquisition · checked 2026-11-01 - CSA provides update to crypto trading platforms operating in Canada — CSA (release published by FCNB), 2022-12-12
Supports: Custody, segregation, no leverage; offshore platforms treated as operating in Canada · checked 2026-11-01 - FTX receives US Bankruptcy Court confirmation of its plan — FTX debtors (company release), 2024-10-07
Supports: About 119% of allowed claims for 98% of creditors (debtors' figure) · checked 2026-11-01