Personal Tech

What Happened To FTX And “The World’s Most Generous Billionaire”

A while ago, people were praising FTX’s founder but after the fall of his business, the CEO hasn’t been so lucky.

ftx.com

Sam Bankman-Fried has been called many things over the course of his popularity. First, it was “the World’s Most Generous Billionaire”. Then he was called the hero that saved crypto. Now, people view him as a fraud who made FTX, his crypto trading company, file for bankruptcy. To understand how it got this bad, follow along in this article.

The Rise

In January 2022, everyone was talking about how Sam is a crypto billionaire who gives all this money away to charity and good causes. Videos and articles were made calling him “the world’s most generous billionaire” and praising all of the donations he was doing. One of the more popular videos about Sam by NasDaily has since been deleted because of what has happened since, but the same channel made a new video addressing what happened. Everything seemed to be going great for Sam.

The thing is, FTX started right before a big crypto boom. At this time, Bitcoin rose more than 6x in value. FTX seemed to contribute to this boom, being so successful that it started to buy out failing crypto companies to try and save them. At the start of FTX’s life, it contributed to a massive rise in crypto again, which made everyone start to believe in crypto again. Those same people started praising Sam and FTX for “saving crypto” even though the effect that FTX had would not last for long.

The Fall

The first red flags about the demise of FTX came when a crypto investing firm called Alameda Research, also owned by Sam, was revealed to own a large amount of FTT, a digital currency created by FTX. On November 6, 2022, the CEO of a rival crypto company called Binance announced that they were going to sell all of their FTT tokens after seeing the news. After hearing this, most people sold their FTT tokens and the price kept going down.

This mass selling of FTT tokens resulted in a bank run of sorts where FTX lost billions of dollars overnight. All of these events in such a short time caused FTX to make the decision to stop allowing customers to take money out of their platform.

With FTX down about 8 billion dollars, on November 8th, Binance offered to buy out FTX but backed out of the deal very soon after citing reports that FTX had wrongly used user funds and information.

In a final conclusion to all of these events, Sam Bankman-Fried stepped down as CEO, and soon his company filed for bankruptcy. In the span of five days, FTX went from doing completely fine to bankrupt, broke, and disgraced.

https://www.forbes.com/profile/sam-bankman-fried/?sh=731672614449

https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankman-fried-crypto-bankruptcy.html

https://www.nbcnews.com/tech/crypto/sam-bankman-fried-crypto-ftx-collapse-explained-rcna57582

https://thefinancialexpress.com.bd/views/the-most-generous-billionaire-in-the-world-1643350513

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