Platform bankruptcy — FTX (2022)

Constrained

Case description

The Bahamas Securities Commission froze FTX Digital Markets' assets and transferred approximately $3.5 billion to a government wallet on 12 November 2022, one day after bankruptcy was filed. This transfer conflicted with the US bankruptcy proceedings and created a jurisdictional dispute. FTX US and FTX international customers were subject to different legal proceedings and different recovery timelines, with many international customers having weaker legal standing.

Custody context

Stress condition	Legal or authority constraint
Custody system	Exchange custody
Outcome	Constrained
Documentation	Unknown
Year observed	2022
Country	Bahamas

Structural dependencies observed

Legal process requiredInstitutional cooperation required

What this illustrates

Before anyone could access the funds, a legal process had to be completed first. Whether full access was ultimately possible is unclear, but significant delay or outside intervention was involved.

Outcome interpretation

Access remained possible, but only with delay, dependence, or significant difficulty.

Source

Publicly Reported

Evidence type

News article

Evidence link

https://en.wikipedia.org/wiki/Bankruptcy_of_FTX

Related cases involving legal or authority constraint

39 cases involve legal or authority constraint 512 cases involve exchange custody View archive statistics →

This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents. Submit a case

← All cases

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.