  This paper investigates the causes of the FTX digital currency exchange's
failure in November 2022. We identify the collapse of the Terra-Luna ecosystem
as the pivotal event that triggered a significant decrease in the exchange's
liquidity. Analysing on-chain data, we report that FTX heavily relied on
leveraging and misusing its native token, FTT, and we show how this behaviour
exacerbated the company's fragile financial situation. To gain further insights
into the downfall, we study evolutionary dependency structures of 199
cryptocurrencies on an hourly basis, and we investigate public trades at the
time of the events. Results suggest that the collapse was actively accelerated
by Binance tweets causing a systemic reaction in the cryptocurrency market.
Finally, identifying the actors who mostly benefited from the FTX's collapse
and highlighting a generalised trend toward centralisation in the crypto space,
we emphasise the importance of genuinely decentralised finance for a
transparent, future digital economy.
