Overview
FTT was the native utility token of FTX, a cryptocurrency exchange founded in 2019 by Sam Bankman-Fried (SBF) and Gary Wang. FTX rapidly grew to become the world's third-largest cryptocurrency exchange, valued at $32 billion at its peak. FTT provided trading fee discounts, staking rewards, and was regularly burned using exchange revenue — standard exchange token utility that drove FTT to a peak market cap exceeding $9 billion.
In November 2022, FTX collapsed in spectacular fashion after a CoinDesk report revealed that Alameda Research (FTX's sister trading firm, also controlled by SBF) held a massive concentrated position in FTT — meaning the collateral backing Alameda's loans was primarily the exchange's own token, creating a circular, house-of-cards dependency. Binance CEO Changpeng Zhao announced his intention to sell Binance's FTT holdings, triggering a bank run that FTX could not honor because customer funds had been misappropriated.
The fraud was staggering in scope:
- Approximately $8-10 billion in customer funds were transferred from FTX to Alameda Research without customer knowledge or consent.
- Alameda used customer deposits to fund risky trades, venture investments, political donations, and personal expenses of insiders.
- FTX's financial systems were deliberately designed to obscure the misappropriation — including a hidden "backdoor" that allowed Alameda to borrow unlimited funds without triggering normal accounting.
- Sam Bankman-Fried was convicted of seven criminal charges including wire fraud, securities fraud, and money laundering, and sentenced to 25 years in federal prison.
FTT is now worthless. The exchange is bankrupt and in liquidation. FTT holders lost everything.
Exchange Health
Exchange is Dead
FTX filed for Chapter 11 bankruptcy on November 11, 2022. The exchange is permanently closed. All exchange functions — trading, deposits, withdrawals — have been terminated. The FTX bankruptcy estate is managed by court-appointed administrators (led by John Ray III, who also oversaw Enron's bankruptcy) who are liquidating remaining assets to partially repay creditors.
Scale of Fraud
The FTX bankruptcy revealed one of the worst cases of corporate governance failure in financial history. John Ray III stated in court filings: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information." The exchange had no functional accounting system, no board of directors, and used QuickBooks (consumer accounting software) to manage billions in assets.
Creditor Recovery
The bankruptcy estate has recovered significant assets through liquidation and legal proceedings. Creditors may receive substantial distributions (some estimates suggest 70-100% of claim values at the time of bankruptcy), but this reflects the FTX estate's recovery efforts, not any value in FTT. FTT holders are at the bottom of the creditor waterfall.
Token Utility
Zero Utility
FTT has zero utility. The exchange it was designed for no longer exists. Trading fee discounts on a dead exchange are worthless. Staking rewards from a bankrupt platform are worthless. The token burn mechanism burned tokens from an insolvent entity. Every form of FTT utility has been permanently destroyed.
Speculative Trading
FTT still trades on some exchanges, driven purely by speculation. Some traders bet on FTX restart rumors or residual bankruptcy value. This speculative activity does not constitute legitimate utility.
Tokenomics
Circular Ponzi Structure
FTX's tokenomics were revealed to be part of a circular fraud:
- FTX issued FTT tokens and used exchange revenue for regular burns (creating scarcity narrative).
- Alameda Research accumulated massive FTT positions and used them as collateral for billions in loans.
- The loans were partially funded by FTX customer deposits routed to Alameda.
- FTT's "value" was supported by the illusion of exchange health, which was fabricated.
- When FTT's price dropped, Alameda's collateral became insufficient, triggering the collapse.
This circular dependency — where the exchange's own token was the primary collateral backing its sister company's borrowing of customer funds — was the mechanism through which $8-10 billion was lost.
Worthless Asset
FTT has no tokenomics because it has no economy. No burns, no fee sharing, no utility, no governance over anything. The token is a claim on nothing.
Transparency
Systematic Deception
FTX's transparency was not merely inadequate — it was actively fraudulent. The exchange:
- Published fake proof-of-reserves that excluded Alameda liabilities.
- Operated a hidden backdoor allowing Alameda unlimited borrowing access to customer funds.
- Used shell companies and personal accounts to move funds.
- Fabricated financial records presented to investors and auditors.
- SBF personally lied to regulators, investors, and customers about the exchange's financial condition.
Criminal Convictions
Sam Bankman-Fried was found guilty of all charges in November 2023 and sentenced to 25 years in prison in March 2024. Caroline Ellison (Alameda CEO), Gary Wang (FTX CTO), and Nishad Singh (FTX engineering director) all pleaded guilty and cooperated with prosecutors.
Risk Profile
Total Loss
FTT represents a 100% loss for holders. The token's risk profile is that of a completely failed asset with no recovery prospects. Any remaining market price is driven by speculation, not fundamental value.
Legal Complexity
FTT holders are unsecured creditors in the FTX bankruptcy with the lowest priority. Any distributions go first to customers, then secured creditors, before equity/token holders receive anything. Token holder recovery is expected to be zero or near-zero.
Risk Factors
- EXCHANGE IS BANKRUPT AND PERMANENTLY CLOSED.
- FOUNDER CONVICTED OF FRAUD AND SENTENCED TO 25 YEARS IN PRISON.
- $8-10 BILLION IN CUSTOMER FUNDS WERE STOLEN.
- FTT IS WORTHLESS. Any market price is pure speculation.
- No recovery prospects for FTT holders. Last in creditor priority.
- Systematic fraud — not an accident, not a hack, but deliberate criminal theft.
- The biggest fraud in cryptocurrency history.
Conclusion
FTT is the token of the largest fraud in cryptocurrency history. FTX's collapse destroyed $8-10 billion in customer funds, triggered industry-wide contagion (contributing to the failures of BlockFi, Genesis, and others), and resulted in criminal convictions for the exchange's leadership. Sam Bankman-Fried's 25-year prison sentence reflects the severity of the fraud.
The 0.0 overall score — the lowest possible — is the only honest rating. Every dimension scores 0 because the exchange is dead, the token has no utility, the tokenomics were part of a fraud mechanism, transparency was systematically fabricated, and the risk is total loss. FTT is not an investment. It is evidence in a criminal case.
The FTX collapse's most important legacy is the industry-wide push for proof-of-reserves, regulatory frameworks, and the visceral reminder that centralized exchange tokens are only as valuable as the integrity of the people who control the exchange. When that integrity is zero, so is the token's value.