The collapse of FTX and Sam Bankman-Fried is the biggest event that has ever happened to crypto. But their death took many years. See how it happened.
FTX founder Sam Bankman-Fried faces eight felony charges, ranging from fraud to conspiracy to commit money laundering, in connection with the failure of his earlier exchange. This week, he denied all charges against him and was given a court date of October 2, but if that’s all you know about this saga, you might be wondering why.
The FTX crash has become the biggest event that has rocked the crypto market. Before stopping trading and filing for bankruptcy, FTX was the second largest exchange and had almost $30 billion in daily volume – a fact Bankman-Fried recalls in a November 2021 tweet.
It is cryptocurrencies, such as Bitcoin and Ethereum, what the New York Stock Exchange and Nasdaq are stocks. Now, with $8 billion in losses, charges of mixed funds with the trading company Alameda Research and its founder in bailout, the FTX restructuring team says it has spent months trying to find all the company’s money – and customers still have no idea if they ‘ Will not see their money again.
May 2019: FTX is founded
In May 2019, Bankman-Fried, also known as SBF, formed FTX with former Google employee Gary Wang and established its headquarters in Hong Kong. Bankman-Fried has run Alameda Research, its trading desk, since 2017.
Making a name for himself as a skilled merchant in Alameda made it easier for Bankman-Fried to raise the funds for his new venture. It has several early stage investors on its capital table: Pantera Capital, Sequoia Capital, Digital Currency Group, competitor Binance and its capital arm, Binance Labs and Consensus Labs. By August of that year, Bankman-Fried had closed an $8 million seed round.
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Fall 2020: Seeking Refuge
As of September 2020, Bankman-Fried has become the supposed savior of the failed SushiSwap currency exchange – although the details of how this happened have been questioned, given what we all know now about SBF.
Nevertheless, Bankman-Fried sparked a new wave of popularity, but in the fall of 2020, FTX needed more than a good name to follow other crypto exchanges. At that time, the daily volume of FTX exceeded the $1 billion mark, but not always.
In October 2020, the company launched a “distributed stock market” for Tesla, Apple and Amazon manufacturers. Then in December, the exchange launched a “token fund” for five cannabis-focused companies. “Honestly, this is one of the most dope joint lists ever,” Bankman-Fried wrote in a hilarious tweet at the time.
All Year 2021: Sports Marketing Budget
In a seemingly endless series of awards, FTX has spent 2021 getting its name and brand in front of gamers.
This includes the Formula 1 team Mercedes-AMG Petronas, the NBA’s Miami Heat and the Golden State Warriors, the delivery team Furia and Team SoloMid, a 10-year naming contract for the stadium of the University of California -Berkeley, Major League Baseball umpire jerseys, Monumental Sports and Entertainment. Washington-based pro team, League of Legends creator, Riot Games.
The marketing doesn’t stop there. FTX also signed deals with a number of spokespeople: Tampa Bay Buccaneers quarterback Tom Brady and his then-wife, model Gisele Bundchen; Golden State Warriors point guard Steph Curry; top tennis player Naomi Osaka; and Los Angeles Angels star Shohei Ohtani. “Everyone we talk to who knows us a little, or a lot, or a little, or intimately, that’s what matters most to them,” he would later say in the first season of Decrypt’s gm podcast. more than everything we did together, and the way people understand us.
July 2021: FTX Buys Shares of Binance
In a move that would prove critical to FTX’s losses, the company bought Binance’s stake in the company. FTX used $2.1 billion worth of Binance USD and, more importantly, FTX Token (FTT) to buy Binance shares in the company. This means that when things started to fall in FTX, Binance was still sitting on hundreds of millions of FTT.
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June 2022: Broadcasting
The dust has just begun to settle as TerraUSD, an algorithmic stablecoin, cleared $40 billion in the crypto market. The crash sent the pegged currency pegged to the US dollar to zero. The resulting market turmoil left crypto hedge fund Three Arrows Capital, or 3AC, unpaid. But as everyone soon realized, 3AC maintained a large position in Terra and borrowed a large amount of money from all the leading crypto lenders to make the high-end investment plan. Bankman-Fried took off his hat and began speaking in an interview with the company
