Sam Bankman-Fried – better known as SBF – is facing a bankruptcy settlement for the cryptocurrency exchange he runs, FTX. In a matter of days, his empire exploded in quite spectacular fashion.
Bankman-Fried launched Alameda Research, a quantitative trading firm focused on digital assets, in 2017, and then FTX, an exchange, in 2019. Until recently, FTX was valued at $32 billion, with its smaller FTX US unit pegged at $8. billion, and Alameda had a profit of 1 billion dollars in one year. Since then, things have fallen apart very quickly.
Thanks to a leak about Alameda Research’s accounting and financial health, and some shrewd maneuvering from rival exchange Binance, investors started pulling their money out of FTX en masse. FTT, a token issued by the company, lost value. FTX was forced to look for a way out. Bankman-Fried destroyed the savings of countless customers and may have committed fraud in the process.
Throughout the building of the FTX, Bankman-Fried was one of the brightest stars of the effective altruism (EA) movement. Through the FTX Foundation’s Future Fund, Bankman-Fried has given millions to people and organizations with ideas on how to improve the future. (Disclosure: In August of this year, Bankman-Fried’s philanthropic family foundation, Building a Stronger Future, awarded Vox’s Future Perfect a grant for its 2023 reporting project, which is currently on hiatus.) In addition to Bankman-Fried’s philanthropic efforts, According to data from OpenSecrets, the second largest individual donor to the Democrats in 2022, after George Soros.
In the annals of cryptocurrency disasters, the tale of Bankman-Fried is known as one of the most remarkable stories. Bankman-Fried is facing a faster decline in reputation than in recent memory. Right now, we have more questions than answers about what’s going on with FTX. Will account holders get their money back? Will Bankman-Fried be prosecuted? What will happen to everyone who accepts his donations? Is this finally the beginning of the end for cryptocurrency? According to several news outlets, the DOJ and SEC are investigating FTX and his friends and admirers in financial, philanthropic and political circles quickly began to distance themselves from the so-called crypto king.
What Vox means to Sam Bankman-Fried, FTX, cryptocurrency, and more Follow here for all the coverage.