Following FTX’s demise last week, its creator and CEO, Sam Bankman-Fried (SBF), went from being a crypto industry star and so-called savior to being a humiliating person responsible for billions of dollars lost in investor money. The once-wealthy crypto tycoon has reportedly lost his entire fortune and is now widely considered to be a con artist.
Top industry players such as Ethereum‘s Vitalik Buterin, Binance’s Changpeng Zhao, and MicroStrategy’s Michael Saylor have all called SBF a scam. So does the whole crypto Twitter. People are utterly dissatisfied with the guy.
The FTX exchange was established in 2019, just three years ago. Bankman-Fried built an astoundingly large economic empire, investing in dozens of lesser crypto startups and forming connections with well-known corporations. He is also known for being President Joe Biden’s second-largest fundraiser. SBF had even guaranteed a $1 billion donation to the 2024 election.
Bankman-Fried was utilizing FTX client money inappropriately to stop the hemorrhage at his Alameda Research hedge fund. Unfortunately, the company ran into a liquidity crisis when FTX consumers suddenly started making huge withdrawals of assets and the value of the FTT token plummeted. When rival exchange Binance realized how bad things had become, it almost stepped in to help, but decided against that at the last minute.
The Securities and Exchange Commission, the Department of Justice, the Commodity Futures Trading Commission, the Texas State Securities Board, and the California Department of Financial Protection and Innovation are all U.S. regulatory bodies currently looking into Bankman-Fried and FTX.
In related news, Moneyball and The Big Short author Michael Lewis has spent the last six months researching Sam Bankman-Fried, the creator of FTX, for his next book. FTX’s $32 billion meltdown last week undoubtedly impacted Lewis’ book’s possible finale, but Lewis is already hawking the movie rights.
