Sam Bankman Fried monopolized the pages and rankings of the youngest billionaires in the world not so long ago. This graduate in physics from the Massachusetts Institute of Technology had touched the sky if he reached the age of 30, with an estimated fortune of $26.5 billion in his name at the end of 2021. He was the boy everyone wanted to appear in the photo with, an example of an American dream that has just become a nightmare.
Until this week, Bankman-Fried or SBF as his relatives call him, was the CEO of FTX, the American cryptocurrency exchange company that was the envy of half the world. Under his command it became the fourth largest group in the world in digital currencies, but the lousy management with the merger of Alameda Research and Binance’s panic to save them has ended not only with the firm itself declared bankrupt, but with Bankman-Fried’s own account in the red.
It is no accident that he was known as the new mark zuckerberg. Only the creator of Facebook (who doesn’t go through his best moment either) had achieved such a fortune before he was thirty, so this wealthy middle-class Californian, but far from it a millionaire by birth, had earned praise from the business world for his fine touch.
“I screwed up”
“The Zuckerberg of cryptocurrencies” or “the new Warren Buffett”, as ‘Fortune’ magazine baptized him in 2020, has been unanimously pointed out as the culprit of the FTX crashwhose sequels have not yet finished knowing.
He himself did not cover up and was very clear in apologizing after Binance’s announcement that a much larger hole than expected had been found in his accounts. “I am sorry. That’s the main. I screwed up, and I should have done better », he admitted in a twitter thread in which he gave his explanations.
1) I’m sorry. That’s the biggest thing.
I fucked up, and should have done better.
— SBF (@SBF_FTX) November 10, 2022
It was he who failed to find the $4 billion investment to avoid bankruptcy. Changpeng Zhaoowner of Binance, was very close to contributing it, but the intricate financial engineering that SBF had presented made them flee.
Thus ends a story with shades of ‘The wolf of Wall Street’ mixed with that of the aforementioned Zuckerberg. It all started in 2014, when a recent graduate in physics from MIT became an arbitration operator in Jane Street Capitala financial services company where he understood what levers he had to activate to maximize returns on stock assets.
Just three years later, he was already riding the crest of the incipient wave of cryptocurrencies: he bought bitcoins in the United States and, with a 10% profit, he sold them in Japan. He founded Alameda Research and in May 2019 it was already running FTX, as a crypto assets trading firm and as an exchange respectively. The rescue attempt of the first with the money of the investors of the second this summer of 2022 was one of the first nails in his coffin.
Key support for the Democratic Party
Beneath a halo of presumed transparency, Bankman-Fried watched his account grow exponentially and his gaze went to the Washington DC Pennsylvania Avenue.
For this 2022 election cycle, he donated more than $40 million to different Democratic candidates (only billionaire George Soros gave more money to the cause) and had promised to contribute a billion to help defeat Donald Trump if he ran again to return to the White House in 2024. Such was his self-confidence that he had signed multi-million dollar endorsement deals with teams like the Miami Heat of the NBA (their stadium was going to be baptized as FTX Arena) or the Mercedes Formula 1 teamwhich was one of the first to advance the bankruptcy that has caused the ‘crypto-earthquake’.
After the bankruptcy of FTX, it is estimated that he has lost 96% of his fortune, although he still has to finish balancing his balance because it is not ruled out that creditors will start knocking on his door. Sam Bankman-Fried has gone from being a world leader to an outcast.
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Sam Bankman-Fried, the new Mark Zuckerberg crushed in the cryptocurrency earthquake