Exploring the Role of Corporate Culture in Financial Crimes: A Case Study of FTX

Robin O’Hanlon (), Joshua D. Freilich () and Steven Chermak ()
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Robin O’Hanlon: CUNY/The CUNY Graduate Center, John Jay College of Criminal Justice
Joshua D. Freilich: CUNY/The CUNY Graduate Center, John Jay College of Criminal Justice
Steven Chermak: School of Criminal Justice, Michigan State University

A chapter in Corporate Governance, Organizational Ethics, and Prevention Strategies Against Financial Crime, 2025, pp 339-368 from Springer

Abstract: Abstract This chapter explores the relationship between corporate culture and financial crimes through the collapse of FTX, the once celebrated cryptocurrency exchange. The chapter dissects the elements of the Cressey’s “fraud triangle”—opportunity, pressure, and rationalization—within FTX’s corporate culture, illustrating how these factors collectively paved the way for the company’s descent into financial malfeasance. First, the chapter delineates the unique features of the cryptocurrency industry and explores the emergent “cryptoculture.” Next, it explores the internal culture of FTX, highlighting the influence of leadership styles, ethical values, and corporate governance practices on the occurrence of financial crimes. Key factors such as the pursuit of unchecked expansion, regulatory challenges, and the pressure to achieve aggressive financial targets are considered. It also emphasizes the role of FTX CEO Samuel Bankman-Fried in this company’s misconduct, along with the broader organizational dynamics and ethical lapses that contributed to the company’s downfall. Concluding with policy implications, the chapter advocates for a multifaceted approach to address the fallout of financial crimes, emphasizing the need for better understanding of corporate culture, effective regulation, whistleblower protections, consumer education, and a broader recognition of the social harms caused by corporate failures like FTX.

Keywords: Fraud; Corporate deviance; Corporate culture; Cryptocurrency; FTX; White-collar crime; Financial misconduct (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-3-031-74523-2_16

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