Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-00960
The bankruptcy proceedings revealed this was false: customer assets had been commingled
BlockedCase description
FTX had published terms of service stating that customer assets were held in segregated accounts and were not company property. The bankruptcy proceedings revealed this was false: customer assets had been commingled with and lent to Alameda Research, FTX's sister trading firm. Customers who had relied on FTX's stated custody practices had no basis to verify the actual handling of their funds prior to the collapse.
Custody context
| Stress condition | Documentation absent |
| Custody system | Exchange custody |
| Outcome | Blocked |
| Documentation | Unknown |
| Year observed | 2022 |
| Country | Bahamas |
Structural dependencies observed
What this illustrates
There was no documentation of how access worked. Without it, there was no path back in. Access was not recoverable.
Outcome interpretation
Access was not possible under the reported conditions.
Source
Publicly Reported
Evidence type
News article
Related cases involving documentation absent
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents.
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
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