1、The collapseof FTXNovember 2022Lessons and implications for stakeholders in the crypto industry1Document Classification:KPMG Public 2022 KPMG,a Hong Kong partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private Eng

2、lish company limited by guarantee.All rights reserved.Printed in Hong Kong,China.OriginsOrigins and the relationship between FTX and AlamedaIn 2017,Sam Bankman-Fried(“SBF”)co-founded Alameda Research(“Alameda”),a crypto fund.Alameda became a prominent market maker on crypto exchanges.In 2019,SBF fou

3、nded FTX,an crypto futures exchange built to meet the needs of serious traders(“by traders,for traders”).The FTX OTC desk was powered by Alameda and SBF was the CEO of both businesses.FTX launched its own token,“FTT”.FTT provided holders with a discount on trading fees and OTC rebates,with FTX buyin

4、g back and burning FTT tokens based on FTX profitability reducing supply hence increasing token price.By 2021,FTX had become one of the largest and most popular exchanges for professional traders due to its fast listing of tokens,user-interface,and high liquidity(driving tighter spreads between bid

5、and ask prices).FTXs market leading liquidity was in part due to its unique liquidation engine which effectively acquired holdings from sellers in the event of a large liquidation event thus preventing collapse of prices.The backstop for this liquidation engine was Alameda.Sam Bankman-Fried(“SBF”)We

6、st Realm Shires Inc.(Delaware)(“FTX US”)Third party investorsClifton Bay Investments LLC(“FTX Ventures”)Alameda Research LLC(Delaware)(“Alameda”)FTX Trading Ltd(Antigua)(“FTX Global”)25%75%90%10%:Gary Wang8%:Nishad Singh23%:Gary Wang10%:Nishad Singh67%53%17%:Gary WangA cryptocurrency fund and the la