Revisiting the Ponzi Patterns Behind FTX’s Notorious Collapse

This research uses a Ponzi model to explain the fall of FTX, which at its height was the third-largest centralized cryptocurrency exchange in the world. We demonstrate how the combination of three key drivers—its native token FTT, unsustainable borrowing, and reserve diversion—exacerbated instability and finally led to insolvency in November 2022.