FTX / Sam Bankman-Fried

FTX's $32 billion collapse remains the crypto industry's largest fraud conviction. In November 2022, the exchange secretly diverted $8 billion in customer deposits to cover losses at its sister hedge fund Alameda Research. Founder Sam Bankman-Fried, once a leading political donor, was convicted on seven counts of fraud and sentenced to 25 years in prison. The implosion occurred in just nine days—four times faster than the gradual decline of WeWork (#6), which took years from peak valuation to bankruptcy filing. This rapid unraveling erased $1.2 billion in venture capital funding overnight.