It all started from a leaked balance sheet on November 2, 2022, when it was reported that a substantial amount of FTX tokens was held by Alameda Research, a trading firm founded by Sam Bankman-Fried. It generated a buzz, with the crypto community concerned that the trading firm held such a large amount of a single asset.
One thing led to another, with traders detecting movements of large amounts of FTT to Binance. After Binance decided to sell its FTT holding after its November 6 announcement, the CEO of Alameda, Caroline Allison, offered to buy the holdings. It led to confusion and panic in the markets, with many advising FTX investors to withdraw their funds, despite the FTX CEO assuring investors of their assets being safe.