The Week in Business: FTX’s Collapse

In the course of days, the collapse of one of the largest cryptocurrency exchanges, FTX, has led to a series of revelations — about the corporate dysfunction inside FTX, the entangled personal lives of the people who ran it and what the exchange’s new leader said appeared to be efforts to “conceal the misuse of customer funds.” The company has filed for bankruptcy, and federal prosecutors are now investigating what happened to the lost funds of possibly more than one million creditors. The downfall of Sam Bankman-Fried, the founder and former chief executive of FTX, has called into question the future of the crypto industry as well as that of a closely affiliated movement in which he heavily invested. That movement was centered on a moral philosophy known as effective altruism, and it financed itself in large part with donations from FTX’s philanthropic arm.

Elizabeth Holmes was sentenced to more than 11 years in prison on Friday, after being convicted on four counts of defrauding investors about the technology and business practices of Theranos, her failed blood-testing start-up. It was a lighter sentence than the maximum 20 years in prison she faced but still far tougher than the 18 months of house arrest her lawyers had sought. The decision was delivered by the same judge who oversaw Ms. Holmes’s trial last year, and in making it, he considered a cache of letters and documents filed by lawyers and prosecutors for the case. Included among them were family photos of Ms. Holmes, her partner, Billy Evans, and their son, as well as comments from figures like Senator Cory Booker, who praised Ms. Holmes’s “determination to make a difference.” Her critics viewed the case as an opportunity to send a message to other tech founders who may distort the truth in their quest for success in an industry where few executives are ever found guilty of fraud.

Given the ultimatum to leave Elon Musk’s Twitter or to stay at the company and “build a breakthrough Twitter 2.0,” some 1,200 employees appeared to choose to go on Thursday. They tendered their resignations hours before the 5 p.m. Eastern deadline that Mr. Musk set the day before in an email with the subject line, “A Fork in the Road.” The remaining staff, Mr. Musk wrote, would have to be “extremely hard core” and work long hours at a high intensity. Because the departures came on the heels of mass layoffs of about half of the company’s employees, there are growing questions about how the site will hold up. Vast swaths of Twitter’s work force have been eliminated, like the communications department, which no longer exists, and the platform’s infrastructure teams, which are virtually nonexistent. On Friday, Mr. Musk asked “anyone who actually writes software” to report to the 10th floor of Twitter’s headquarters.

There is much to suggest that despite the crushing inflation consumers experienced this year, many intend to shop enthusiastically this holiday season. Retail sales rose 1.3 percent last month, beating expectations, as retailers like Amazon, Target and Kohl’s offered earlier-than-usual holiday deals. The rise in sales coincided with the first signs of moderating inflation: In October, prices climbed 7.7 percent from a year earlier, still a quick pace but down from 8.2 percent in September. But shoppers’ zeal for holiday sales indicated that they were looking for discounts, adding to the pressure on retailers — who not that long ago wielded more power to price products as they pleased — to lower prices. At Target, for example, demand tapered off when those sales ended. What has changed from last season? Consumers had more money saved in 2021, and were spending on clothes and electronics as they emerged from pandemic lockdowns. This year, customers have been much more worried about rising prices and have cut down on discretionary spending.