# How the crypto exchange FTX collapsed in a week

> A process map exported from forks.world (https://forks.world). Author: Brian. Source: https://forks.world/p/cmv2221bg0011i206y7x6a3y6
> It describes who does what, in what order, and with which technology. Read the plain-language sections first; the JSON at the end is the exact, complete data.

## Summary

- 13 steps across 1 layer
- Persona: FTX exchange, Alameda trading firm, Customers, Journalists, A rival exchange, Courts

## Pain points

Where this process hurts, worst first:

- **A trading firm owned by the same founder borrows customer money** (How the crypto exchange FTX collapsed in a week; critical): Customer deposits were used for the founder's own bets
- **Its biggest asset is a token FTX created, valued by FTX itself** (How the crypto exchange FTX collapsed in a week; critical): Assets were mostly a coin the company printed

## How to read this file

- A process is made of **layers**. The main layer is the top level; any step of kind `subprocess` opens a detail layer with its own lanes and steps.
- **Lanes** are either persona (people/roles) or technology (systems). Each step belongs to one lane; `using` lists tools a person uses for that step.
- Step kinds: `start`, `task`, `decision` (its arrows carry the answer as a label), `subprocess`, `end`.

## How the crypto exchange FTX collapsed in a week

Lanes:
- FTX exchange: person / role (id `ftx`)
- Alameda trading firm: person / role (id `alameda`)
- Customers: person / role (id `customers`)
- Journalists: person / role (id `press`)
- A rival exchange: person / role (id `rival`)
- Courts: person / role (id `court`)

Steps, in the order they run:

1. **Customers deposit money to trade crypto** [subprocess; FTX exchange; id `x1`], links to the published process "How a Bitcoin transaction gets confirmed" (https://forks.world/p/cmv0kpt9x004ijn06dgbntm2w; full text at https://forks.world/api/public/cmv0kpt9x004ijn06dgbntm2w/export)
   - then A trading firm owned by the same founder borrows customer money
2. **A trading firm owned by the same founder borrows customer money** [task; Alameda trading firm; id `x2`] ⚠ PAIN POINT (critical): Customer deposits were used for the founder's own bets
   - then Its biggest asset is a token FTX created, valued by FTX itself
3. **Its biggest asset is a token FTX created, valued by FTX itself** [task; Alameda trading firm; id `x3`] ⚠ PAIN POINT (critical): Assets were mostly a coin the company printed
   - then A news article shows the trading firm's books
4. **A news article shows the trading firm's books** [task; Journalists; id `x4`]
   - then The rival exchange announces it will sell all its tokens
5. **The rival exchange announces it will sell all its tokens** [task; A rival exchange; id `x5`]
   - then Customers rush to withdraw their money
6. **Customers rush to withdraw their money** [subprocess; Customers; id `x6`], links to the published process "How a bank run happens" (https://forks.world/p/cmv0kpu7j004sjn06auwzqloq; full text at https://forks.world/api/public/cmv0kpu7j004sjn06auwzqloq/export)
   - then Does FTX have the money to pay everyone?
7. **Does FTX have the money to pay everyone?** [decision; FTX exchange; id `x7`]
   - if "No" go to Withdrawals are frozen; if "Yes" go to The panic fades
8. **Withdrawals are frozen** [task; FTX exchange; id `x8`]
   - then Rescue deal is offered and then withdrawn
9. **Rescue deal is offered and then withdrawn** [task; A rival exchange; id `x10`]
   - then Files for bankruptcy within days
10. **Files for bankruptcy within days** [task; FTX exchange; id `x11`]
   - then The founder is arrested and convicted of fraud
11. **The founder is arrested and convicted of fraud** [task; Courts; id `x12`]
   - then Customers wait years to recover part of their money
12. **Customers wait years to recover part of their money** [subprocess; Customers; id `x13`], links to the published process "How a crypto "rug pull" works" (https://forks.world/p/cmv0kptqz004njn06h4y9ek2p; full text at https://forks.world/api/public/cmv0kptqz004njn06h4y9ek2p/export)
   - (no next step recorded)
13. **The panic fades** [end; Customers; id `x9`]

```mermaid
flowchart LR
  subgraph l_ftx["FTX exchange"]
    n_x1[["Customers deposit money to trade crypto"]]
    n_x7{"Does FTX have the money to pay everyone?"}
    n_x8["Withdrawals are frozen"]
    n_x11["Files for bankruptcy within days"]
  end
  subgraph l_alameda["Alameda trading firm"]
    n_x2["A trading firm owned by the same founder borrows customer money"]
    n_x3["Its biggest asset is a token FTX created, valued by FTX itself"]
  end
  subgraph l_customers["Customers"]
    n_x6[["Customers rush to withdraw their money"]]
    n_x9(["The panic fades"])
    n_x13[["Customers wait years to recover part of their money"]]
  end
  subgraph l_press["Journalists"]
    n_x4["A news article shows the trading firm's books"]
  end
  subgraph l_rival["A rival exchange"]
    n_x5["The rival exchange announces it will sell all its tokens"]
    n_x10["Rescue deal is offered and then withdrawn"]
  end
  subgraph l_court["Courts"]
    n_x12["The founder is arrested and convicted of fraud"]
  end
  n_x1 --> n_x2
  n_x2 --> n_x3
  n_x3 --> n_x4
  n_x4 --> n_x5
  n_x5 --> n_x6
  n_x6 --> n_x7
  n_x7 -->|"No"| n_x8
  n_x7 -->|"Yes"| n_x9
  n_x8 --> n_x10
  n_x10 --> n_x11
  n_x11 --> n_x12
  n_x12 --> n_x13
```

## Full data (JSON)

```json
{
  "title": "How the crypto exchange FTX collapsed in a week",
  "maps": {
    "m_root": {
      "id": "m_root",
      "lanes": [
        {
          "id": "ftx",
          "name": "FTX exchange",
          "type": "person"
        },
        {
          "id": "alameda",
          "name": "Alameda trading firm",
          "type": "person"
        },
        {
          "id": "customers",
          "name": "Customers",
          "type": "person"
        },
        {
          "id": "press",
          "name": "Journalists",
          "type": "person"
        },
        {
          "id": "rival",
          "name": "A rival exchange",
          "type": "person"
        },
        {
          "id": "court",
          "name": "Courts",
          "type": "person"
        }
      ],
      "steps": [
        {
          "id": "x1",
          "kind": "subprocess",
          "lane": "ftx",
          "link": {
            "id": "cmv0kpt9x004ijn06dgbntm2w",
            "scope": "public",
            "title": "How a Bitcoin transaction gets confirmed"
          },
          "next": [
            {
              "to": "x2"
            }
          ],
          "uses": [],
          "label": "Customers deposit money to trade crypto"
        },
        {
          "id": "x2",
          "kind": "task",
          "lane": "alameda",
          "next": [
            {
              "to": "x3"
            }
          ],
          "pain": {
            "note": "Customer deposits were used for the founder's own bets",
            "level": 3
          },
          "uses": [],
          "label": "A trading firm owned by the same founder borrows customer money"
        },
        {
          "id": "x3",
          "kind": "task",
          "lane": "alameda",
          "next": [
            {
              "to": "x4"
            }
          ],
          "pain": {
            "note": "Assets were mostly a coin the company printed",
            "level": 3
          },
          "uses": [],
          "label": "Its biggest asset is a token FTX created, valued by FTX itself"
        },
        {
          "id": "x4",
          "kind": "task",
          "lane": "press",
          "next": [
            {
              "to": "x5"
            }
          ],
          "uses": [],
          "label": "A news article shows the trading firm's books"
        },
        {
          "id": "x5",
          "kind": "task",
          "lane": "rival",
          "next": [
            {
              "to": "x6"
            }
          ],
          "uses": [],
          "label": "The rival exchange announces it will sell all its tokens"
        },
        {
          "id": "x6",
          "kind": "subprocess",
          "lane": "customers",
          "link": {
            "id": "cmv0kpu7j004sjn06auwzqloq",
            "scope": "public",
            "title": "How a bank run happens"
          },
          "next": [
            {
              "to": "x7"
            }
          ],
          "uses": [],
          "label": "Customers rush to withdraw their money"
        },
        {
          "id": "x7",
          "kind": "decision",
          "lane": "ftx",
          "next": [
            {
              "to": "x8",
              "label": "No"
            },
            {
              "to": "x9",
              "label": "Yes"
            }
          ],
          "uses": [],
          "label": "Does FTX have the money to pay everyone?"
        },
        {
          "id": "x8",
          "kind": "task",
          "lane": "ftx",
          "next": [
            {
              "to": "x10"
            }
          ],
          "uses": [],
          "label": "Withdrawals are frozen"
        },
        {
          "id": "x9",
          "kind": "end",
          "lane": "customers",
          "next": [],
          "uses": [],
          "label": "The panic fades"
        },
        {
          "id": "x10",
          "kind": "task",
          "lane": "rival",
          "next": [
            {
              "to": "x11"
            }
          ],
          "uses": [],
          "label": "Rescue deal is offered and then withdrawn"
        },
        {
          "id": "x11",
          "kind": "task",
          "lane": "ftx",
          "next": [
            {
              "to": "x12"
            }
          ],
          "uses": [],
          "label": "Files for bankruptcy within days"
        },
        {
          "id": "x12",
          "kind": "task",
          "lane": "court",
          "next": [
            {
              "to": "x13"
            }
          ],
          "uses": [],
          "label": "The founder is arrested and convicted of fraud"
        },
        {
          "id": "x13",
          "kind": "subprocess",
          "lane": "customers",
          "link": {
            "id": "cmv0kptqz004njn06h4y9ek2p",
            "scope": "public",
            "title": "How a crypto \"rug pull\" works"
          },
          "next": [],
          "uses": [],
          "label": "Customers wait years to recover part of their money"
        }
      ],
      "title": "How the crypto exchange FTX collapsed in a week",
      "parent": null
    }
  }
}
```