FTX Drama Part III: The Rise and Fall of Sam Bankman-Fried
It could be argued that Sam Bankman-Fried was, at one point, a prince in the crypto arena awaiting his time to ascend to the digital throne. Many believed he had what it took to rule the space and dominate the digital currency world for years to come but given the circumstances surrounding his exchange at the time of writing, that image is fading relatively quickly.
Sam Bankman-Fried Is No Longer Crypto Royalty
Sam Bankman-Fried is a 30-year-old former crypto billionaire who recently saw more than 90 percent of his overall wealth vanish over the course of just a few days. What was once a heavy-handed leader in the digital currency space has now been reduced to someone who is begging for help and looking to companies like Binance to rush to his rescue.
FTX recently experienced what Bankman-Fried referred to as a “liquidity crunch,” hinting that perhaps the company did not have enough money put aside to ensure it could stay afloat and continue to provide services to its customers. This greatly affected the FTT token, which is the native currency of the exchange, and it wasn’t long before the asset experienced its biggest dip in nearly two years, falling in price by more than 30 percent.
FTX turned to Binance for help, and it appeared – at least for a while – that Binance was going to buy out the company, though unfortunately, at press time, the larger firm has backed out of the deal, meaning FTX and Bankman-Fried are now back on the streets to fend for themselves.
In a message to all its followers, Binance explained that the problems surrounding FTX are too big for even it to handle. It mentioned:
In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
In a recent series of tweets, Bankman-Fried apologized to all his customers and investors, claiming:
I’m sorry. That’s the biggest thing. The full story here is one I’m still fleshing out every detail of, but at a very high level, I f*cked up twice.
Money Handled Badly?
Bankman-Fried was allegedly under the impression that his company was fine, though he now claims many internal bank accounts tied to his company were badly managed and improperly labeled. One of the company’s primary investors – called Team Sequoia – has now declared FTX completely worthless, writing in a note:
In recent days, a liquidity crunch has created a solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0.
And so seemingly ends one of the fastest-growing careers and images the crypto space has ever seen.
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