Cryptocurrency Prodigy Sam Bankman-Fried’s Decline
He emerged as the prominent figure in the world of cryptocurrency, despite his young age. He was adored by the media and appeared to have a promising future in bringing the industry together.
But Sam Bankman-Fried’s spectacular rise to prominence and wealth would be matched by his spectacular fall, and with it, his platform FTX.
Within a few months, the Massachusetts Institute of Technology physics graduate had taken the startup he founded in 2019 and built it into the second largest crypto exchange platform in the world.
He quickly became more than just a young entrepreneur, emerging as a crypto ambassador and making his first congressional appearance in December 2021, testifying to lawmakers about the then-new currency.
Audiences would get to know the seemingly odd-looking boy with curly dark hair who, when he didn’t suit up for an appearance on Capitol Hill, wore shorts and a T-shirt as his look.
The young man, known as SBF, would mesmerize U.S. lawmakers with his outspoken speech and vision for the future of crypto, including a broad regulatory regime — a position at odds with many in the industry.
– Worth $26 billion –
From a platform where people can make cryptocurrency donations to Ukraine, to a derivatives market that stepped on Wall Street’s toes, he developed project after project.
Before it all came crashing down, this native Californian amassed a fortune estimated at $26 billion at his peak. “With the exception of Mark Zuckerberg, no one in history has ever gotten rich so young,” reads a headline in Forbes magazine, which launched the Bankman-Fried lawsuit in October 2021.
The son of two Stanford University professors, Bankman-Fried ventured outside the world of cryptocurrencies by donating to US politicians and persuading celebrities such as American football star Tom Brady or basketball player Stephen Curry to support FTX, for which they were richly rewarded.
CNBC has reported that Bankman-Fried even made a deal with singer Taylor Swift, though it fell through.
SBF is a vegan who said he believes in the concept of effective altruism — the best way to help other people, especially by donating all or part of his wealth to charity instead of volunteering at a soup kitchen.
When the cryptocurrency world went into crisis in the spring of 2022, Bankman-Fried pledged himself as a savior by buying the struggling BlockFi platform and shares in another struggling company, Voyager.
– Compared to Warren Buffett –
“We take seriously our responsibility to protect the digital asset ecosystem and its customers,” he tweeted at the time, as some compared him – then just 30 years old – to legendary investment guru Warren Buffett.
But behind her assurances, Bankman-Fried was struggling financially and taking huge risks, as court documents later revealed.
Unbeknownst to them, the Bankman-Fried team allegedly used FTX clients’ money to cover the risky operations of a trading firm called Alameda Research, buy prime real estate, and make political donations.
In November 2022, crypto news agency CoinDesk revealed that Alameda had converted a large portion of its funds into FTT, created by FTX. This news sent the currency crashing.
Hours later, Changpeng Zhao, head of Binance, the world’s largest crypto exchange, announced that he was selling all his FTT tokens, losing 90 percent of its value in a matter of days and taking over the Bankman-Fried empire. it.
His fortune disappeared overnight, Bankman-Fried was extradited from the Bahamas, where FTX was headquartered. In December 2022, he was accused of fraud and harassment.
He faces a seven-count indictment in a trial that begins Tuesday in Manhattan.
“I’m broke and wearing an ankle monitor and one of the most hated people in the world,” he wrote in a document recently published by The New York Times.
Days after the collapse of FTX, Bankman-Fried admitted that he “made the call” but denied taking other people’s money and blamed former colleagues for the huge mess, including some who are now testifying against him during the trial.
“I will probably never do anything to have a net positive impact in my life,” he wrote.
The fallen joker added: “The truth is I did what I thought was right.”
