Nov 14, 2022 at 06:18Crypto billionaire and FTX founder Sam Bankman-Fried (also known as SBF) will probably not be remembered as a genius but as a great scammer.
FTX, Alameda, and 130 other affiliates are starting Chapter 11 bankruptcy and reorganization proceedings, and FTT tokens have been frozen or delisted. The head of both companies, Sam Bankman-Fried, stepped down as CEO. But it didn’t end there. Oh no!
The chain reaction caused by the collapse of FTX led to a loss in the price of almost all cryptocurrencies.
Do Kwon – Free
Alex Mashinsky – Free
SBF – Free
Su Zhu – Free
Kyle Davies- Free
Voyager Ceo- FreeCreator of Tornado Cash (open source software)
-🚨ArrestedSounds fair
— Satoshi Stacker (@StackerSatoshi) November 9, 2022
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Once upon a time
Crypto exchange has raised large-scale funding since 2021, raising almost $2 billion in 7 months (investors include Sequoia Capital). FTX’s last funding round took place in January 2022 with a valuation of $32 billion.
Last year, Binance sold about 20% of its stake in FTX, exchanging it for stablecoins and FTT tokens. On November 2, Coinbase released a publication saying that the Bankman-Fried cryptocurrency exchange was facing a liquidity crisis. In response to the article, Binance CEO Changpeng Zhao (CZ) announced that the company would sell FTT (token FTX) for about $529 million, after which FTT dropped in value by 90%.
Investors were scared of a repeat of the Terra LUNA story and rushed to withdraw funds. Within three days, 6 billion dollars were removed from the exchange.
That’s when it turned out that FTX needed more assets to cover the withdrawn funds of clients. The exchange giant faced a deficit of up to $8 billion.
The founder of W3T Inc. Alex Valaitis believes that CZ has deliberately undermined the credibility of FTX and provoked investor flight. By doing so, he eliminated a major competitor. And the conflict itself has been brewing since 2019.
However, it was clear that CZ had no desire to make peace.
He further stoked the FUD flames by highlighting a @whale_alert transfer of $584M worth of $FTT & then later comparing FTX to LUNA:https://t.co/0KemSy7PtB
— Alex Valaitis (@alex_valaitis) November 7, 2022
In addition, $10 billion was transferred to a subsidiary of Alameda Research, also founded by SBF, which turned out to be a blow to the exchange. Insiders told Reuters that FTX had created a backdoor to its accounting systems. That way, FTX management could hide its actions from the rest of the team.
Then it turned out that the customers’ money amounting to 1 to 2 billion dollars is not accounted for and the whereabouts of the missing funds are unknown.
At this point, it is speculated that $600 million may have been stolen from the wallets of exchange users as a result of hacking, or worse, by an FTX insider.
On November 12, the Bahamas regulator accused FTX of wrongdoing and opened an investigation. The U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Department of Justice (DOJ), and the California Department of Financial Protection and Innovation (DFPI) launched similar investigations.
Sam Bankman-Fried in politics
Yeah, he’s made his mark there as well. In addition to his history of exchange fraud, SBF has been implicated in politics. In addition to his history of stock market fraud, SBF was also involved in politics. He himself said that he was a “significant donor” to the major U.S. political forces in the run-up to the 2022 midterm elections.
Days before the Nov. 8 U.S. midterm elections, SBF tweeted that he was contributing to the campaigns of both Republicans and Democrats. SBF added that working with FTX Digital Markets co-CEO Ryan Salame, he has signed cryptocurrency acceptance campaigns and given some, including millions, to Republicans in the Senate and House.
1) I was a significant donor in both D and R primaries.
Supporting constructive candidates across the aisle to prevent pandemics and bring a bipartisan climate to DC.
And working with them to support permissionless finance.
— SBF (@SBF_FTX) November 5, 2022
Earlier this year, SBF tells that he planned to spend up to $1 billion on the 2024 presidential election campaigns. It was going to fund a candidate running against former President Donald Trump. In 2020, SBF donated $5.2 million to Joe Biden’s presidential campaign, according to The Wall Street Journal.
Lemme get this straight:
SBF takes customer money
& donates $31 mm to mostly dems
+ $5mm to Biden
Biden appoints Gensler SEC Chair
FTX meets him— to discuss special treatment
The daughter of Gensler’s old boss is FTX Pres
Gensler’s former staffer was FTX General CounselClear?
— Bruce Fenton 🇺🇸 (@brucefenton) November 13, 2022
Where is SBF now?
According to various media reports, former FTX CEO and co-founder Gary Wang and development director Nishad Singh are under surveillance by local authorities in the Bahamas. Meanwhile, an anonymous Cointelegraph source reported that the trio of FTX executives is reportedly planning to flee to Dubai with Caroline Allison, head of a subsidiary of Alameda Research.
According to some rumors, Bankman-Fried is “imprisoned” in the luxurious Albany Tower Hotel in the Bahamas.
There was also information that SBF had fled to Argentina. But in a Nov. 12 text message to Reuters, Bankman-Fried said he was still in the Bahamas.
The rumour is SBF on his way to Argentina.. pic.twitter.com/Jnxm3bprm9
— CoinMamba (@coinmamba) November 12, 2022
However, there is a message from the administrator of the official FTX Telegram channel stating that they have no idea where the former leader is. Which means it’s not certain that SBF is still in the Bahamas.
SBF itself (or on its behalf) posted two strange tweets on November 14. What this is all about is anyone’s guess.
1) What
— SBF (@SBF_FTX) November 14, 2022
How can I make money on this?
Almost no one expected FTX to collapse. But now protecting funds is paramount. Many recommend cashing out or transferring to a cold wallet (A digital storage not connected to the Internet, which holds the keys to authorize the system and make transactions with personal digital money.) money from centralized exchanges or platforms.
Based on indicators, investors are doing just that. For example, in the past two weeks, the balance of the second currency after bitcoin, Ethereum, has fallen 7% to $22.9 million on major cryptocurrency exchanges, including FTX. This was revealed in a report by the analytics platform Nansen. At current exchange rates, that’s a drop of about $2 billion. This means investors are withdrawing their coins from centralized venues and storing them in their own systems.
In addition, stablecoins worth $3.7 billion were withdrawn from exchanges in the last week.
Exchange ETH & ERC20 tokens netflow in the last hour
Binance -$72.9M
Huobi -$12.7M
Gateio -$7.3M
Cryptocom -$4.7M
OKX -$3.1MBittrex +$771K
Bitkub +$496K
Paribu +$191K
Bitpanda +$55K
Probit +$51K*ETH & ERC20 tokens only, from addresses that we have labeled pic.twitter.com/wcGnESlgwi
— Nansen 🧭 (@nansen_ai) November 13, 2022
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$3.7B worth of stablecoins have been withdrawn from exchanges in the past week
FTX stablecoin balances: $38.7M
FTX US: $38.3M*Ethereum stables only, from addresses that we have labeled pic.twitter.com/mMW1WcGxfD
— Nansen 🧭 (@nansen_ai) November 14, 2022
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