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FTX’s Bankruptcy Marks the Fall of Sam Bankman-Fried, Previously Seen as a Cryptocurrency Prodigy

Cointime Staff· 4 min read

(By Sylvain Saurel)

Sam Bankman-Fried, better known via the acronym SBF, the shaggy, sweatshirt-clad cryptocurrency billionaire had become, and in a short time, one of the most iconic and beloved faces in the crypto sphere.

Media-friendly, politically engaged, willing to donate his fortune to causes, a Noah’s Ark for struggling startups, he too ended up falling victim to the ruthless crypto universe. An even more ruthless universe amid a prolonged Bear Market.

It all happened in three days and less than 280 characters on Twitter for SBF.

First, the rumor that the cash flow of FTX, its crypto exchange platform, is largely composed of its own FTT tokens; raising the risk of insolvency in the event of a downturn. Then, a tweet from its big rival Changpeng Zhao, boss of the leading Binance, announced the liquidation of all its FTT tokens.

Then the panic, the FUD (fear, uncertainty, and doubt), in the jargon, causes a collapse of the price of FTT. Finally, the announcement of an agreement to sell FTX to Binance, in short, the express defeat of SBF, the terrible outcome of a three-year chess game against Changpeng Zhao.

“I’m sorry I didn’t do better,” he later wrote in a letter to investors. For Ledger’s boss on Twitter, “this shows that no one is too big to fail.” Earlier this week, Sam Bankman- Fried was still tied with Changpeng Zhao on the Bloomberg Billionaires list.

Since the beginning of 2022, the former had left nearly $8 billion in wealth in the cryptocurrency and the latter nearly $80 billion, but both were emoting at $16 billion. It didn’t take 24 hours for SBF to be ejected from the chart. Its fortune was wiped out by 94% in one day, in the path of the FTT token (-77%).

Just this summer, SBF had emerged as the white knight of an industry chaotic by the economic situation. An unprecedented position in this sector where the law of the jungle reigns. The 30-year-old saved BlockFi from bankruptcy thanks to a $250 million loan, and Voyager Digital, which was eventually bought by the American subsidiary FTX.US.

This son of an academic who made his fortune is often portrayed as a staunch supporter of the crypto ecosystem.

The entrepreneur, who moved his headquarters to the tax-friendly Bahamas, has also said he would donate almost all of his fortune to causes close to his heart, such as animal welfare, or the fight against global warming.

People and media

With the fall of SBF, the cryptocurrency industry loses a pillar but also a counterweight, while Changpeng Zhao will strengthen his dominant position and concentrate, even more, on the cryptocurrency exchanges. Beyond his financial support to the sector, the founder of FTX has also been a media megaphone, investing at least $ 400 million in sports sponsorship: the F1 Mercedes team, the Miami Heat’s NBA venue renamed FTX Arena …

The thirty-year-old had managed to get out of the crypto sphere to attract to him world stars like the American soccer legend Tom Brady and his no less famous ex-wife, the supermodel Gisele Bündchen, who have become very committed shareholders of FTX. The latter are among the many victims of FTX’s bankruptcy when with a fortune as large as theirs, they could have simply bought Bitcoin and become HODLers patiently.

Sam Bankman-Fried sits in his startup (Autograph), along with Eddie Cue, an Apple baron. The long arm, SBF? At ease in front of journalists as well as politicians, Bankman-Fried has been auditioned several times by American parliamentarians, particularly on the subject of the regulation of digital assets.

A de facto spokesman for the cryptocurrency world in Washington, Sam Bankman-Fried had donated $5 million to Joe Biden’s campaign. Only Michael Bloomberg had given more!

Engaged in the US midterm elections, SBF has spent, according to Open Secrets, nearly $40 million on political action committees and campaigns this year, with the bulk going to the Democratic Party and its candidates. For the 2024 presidential election, he planned to spend up to $1 billion, Cointelegraph reported in May 2022. A lobbyist in the crypto sphere counts few.

Not sure that SBF keeps this weight once FTX has gone bankrupt, because finally, CZ has decided to withdraw its takeover offer in front of the extent of the damage within the accounts of the SBF platform.

# FTX # Biance

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