The brief but tumultuous story of Sam Bakman-Fried, the founder of FTX

If you have not yet read the first part of this story, you can discover it here: SOLANA, la résurrection (Partie 1)The brief but tumultuous story of Sam Bakman-Fried and FTXWe are in 2019. Sam Bakman-Fried aka SBF, 30 years old, is brand new degree in physics from MIT in Boston. Teenage look, messy hair, he founded #FTX , a cryptocurrency exchange. Sam is the new Mark Zuckerberg, the Steve Jobs or even the Warren Buffet of crypto. And for good reason, before his 30th birthday, his personal fortune already peaked at nearly 17 billion dollars, making him the richest person of his generation. His fortune comes from his numerous investments and from the company Alameda Research, specialized in trading and created 2 years earlier by himself and Tara Mac Aulay who also directed the Center for Effective Altruism. Tara Mac Aulay makes dozens of investments in crypto and has some influence on #SOLANA . Everything is going well for SBF and FTX. So what happened for a young visionary to go from a fortune estimated in the tens of billions of dollars to total bankruptcy in a matter of days, bringing with him the biggest financial scandal in the crypto sector? From the peak to the collapse of FTX At the height of its activity, the FTX platform had one million users and was, by volume, the 3rd largest cryptocurrency exchange. But it is in 2022 that the fall of FTX begins with the lack of liquidity on its FTT token. Everything accelerates when the well-known crypto site, CoinDesk, reveals the upcoming accounts and difficulties for FTX. As a security measure to protect themselves from the risks disclosed, many exchanges resell the FTTs they have in their possession. The drop in the price of the token is immediate. Especially since it triggers at the same time a withdrawal of deposits on FTX. The nightmare has begun for FTX and there is now no stopping it. On November 9, FTX announced to its users that it would no longer allow withdrawals on its platform. On November 11, SBF placed FTX, Alameda Research and hundreds of other subsidiaries under judicial bankruptcy. The equivalent of the Securities Commission in the Bahamas, where FTX's headquarters is located, is freezing the assets of one of the FTX Group subsidiaries. SBF lost almost all of its fortune in the days that followed. It was on November 12 that the affair took a new turn. Pushing FTX a little more. It was discovered that FTX customer deposits had been transferred to sister company Alameda Research. We quickly understand that the deposits of the platform's customers were illegally reinvested in Alameda, which owes some $10 billion to FTX. According to revelations from the Wall Street Journal, FTX had loaned funds placed on the stock exchange for trading purposes to Alameda, so that Alameda could make investments with this money. Anonymous sources cited by The Wall Street Journal said the funds were used in part to repay loans Alameda took out to make investments. During this affair, various facts arise at the level of FTX's accounts. Like for example the $473 million that was withdrawn in an “unauthorized transaction” Unprecedented impact in crypto Scam, fraud, negligence, mismanagement, money laundering. The charges against SBF are numerous and endless. Sam Bankman-Fried was arrested on December 12 by Bahamian authorities at the request of American authorities and placed in detention. He was extradited to the United States on December 21. It is an empire that is collapsing, like a house of cards. The shock wave for the entire market is considerable: Crypto.com, BlockFi, CoinShares and even the promising crypto SOLANA, $SOL , which is on the rise despite the various breakdowns encountered on its blockchain, is taking the repercussions of this bankruptcy head on. whip. And for good reason, its exposure to FTX is strong. It is accompanied by a 96% drop in the value of its token, dropping its price from more than $200 to $9 in a few days. Bitcoin, Ethereum, all altcoins are plunging but in a less alarming way. The crypto market very quickly finds itself in a bear market. Overall, the contamination to the rest of the industry is a tsunami. Large investors like investment management giant BlackRock, Japanese bank Soft-Bank, Circle Fund, Venture Capital, Sequoia Capital, and hundreds of other companies around the world all have more or less financial exposure with FTX or one of the entities managed by FTX Group, the parent company. Today the SBF trial is underway to shed light on the biggest scandal in crypto. Since then, many countries have strengthened their regulatory policies in the sector in order to protect themselves from this risk in the future. As we know, there is still a lot to do in terms of policy to make the crypto environment solid and healthy. But what about SOLANA today. Has crypto recovered or is it still under fear of the still visible consequences of FTX? “SOLANA, the resurrection? (Part 3) » continuation and end of this story to discover here: SOLANA, la résurrection (Partie 3) So not to miss the rest and understand a little more about this story which is still shaking up the world of crypto today, follow Crypto Story. You can also leave a tip if you liked this article.