Mati Barnhart, knitted news13.11.22 17:52 19th in Hashvan Tishpag
Bankman said in a congressional hearing
Sam Bankman Fried, the Jewish billionaire known as the “Crypto King”, lost his entire fortune this week, which was about 16 billion dollars, and his cryptocurrency trading company, FTX, whose value was estimated at 32 billion dollars, completely collapsed.
How did the great hope of the world of decentralized currencies and who was perceived by many as a child prodigy end up in financial ruin within a few days?
A million dollars a day
Bankman started dabbling in crypto when he was in college. He started messing with banking, in order to earn as much money as possible, but finally got bored, and switched to experimenting with Bitcoin. He took advantage of the difference in the value of the currency between different trading places, and began to buy the currency cheaply and sell it expensively.
After earning a small amount, he founded the company Alameda Research, which traded cryptocurrencies, together with his classmates. Very quickly the members began to earn extraordinary amounts of money. In 2018, the company already earned no less than a million dollars a day.
A billionaire with an easy life
Bankman officially became a billion in 2021, thanks to his secondary and much more profitable business – the FTX company. The company has become the largest cryptocurrency trading institution in the world, with a turnover of 10-15 billion dollars per day. At the beginning of 2022, the company was already worth 32 billion dollars, with the support of celebrities such as football star Tom Brady.
FTX application. Credit: Poetra.RH, Shutterstock
Bankman liked to share his seemingly easy lifestyle with his followers, uploading photos to his social networks of himself sleeping at work on a pouf near the investment terminal.
The crypto philanthropist
Later, Bankman began donating a lot of money, in accordance with his ideology. He claimed to the BBC last month that he had already donated hundreds of millions of dollars. In addition to donating to the needy, he also began rescuing other crypto companies that collapsed during a severe market crash in the winter of 2022, and was called the “Crypto Knight.” Bankman spent hundreds of millions on this goal as well. Bankman claimed that it would not be good for the market if these companies collapsed, and he also claimed that he has a budget surplus of 2 billion dollars to invest in these issues.
But last week, after the collapse of the company, it was Bankman who went to the same industry and begged for his own bailout.
Relying on the coins he invented
The questions regarding the real financial situation of FTX started following an article on the CoinDesk website which claimed that Alameda Research’s investments are actually mainly based on coins invented by its sister company FTX. In addition, Alameda Research was accused of using the investments of FTX clients to take out investment loans.
The beginning of the end came when FTX’s main competitor, Binance, decided to sell its holdings in FTX a few days after the announcements. This decision caused panic among FTX customers, who began withdrawing billions of their money. Binance considered buying the company and rescuing it, but after finding out that it was being investigated by the authorities, decided to give it up. A day later, FTX went bankrupt.
Despite everything, Bankman still hopes that everything will work out somehow. “I hope things will find a way to recover,” Bankman said.
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