Sam Bankman-Fried lost 15 billion with his crypto exchange FTX.
Bitcoin price dropped below $16,000 this morning. For the first time in two years! It means: Hundreds of thousands of investors lost billions. The reason behind the massive burglary is Sam Bankman-Fried. The boss of the crypto exchange FTX lost $ 15 billion in the sand. Before the first reports of problems with FTX, Bitcoin was well over $20,000. At its peak, the cryptocurrency hovered around $65,000.
At first, Binance – the world’s largest trading platform for digital currencies like Bitcoin – was rumored to be rescuing its competitor FTX. However, this hope has since evaporated.
“We have decided not to pursue a potential acquisition any further,” Binance said on Twitter last night. This is due, among other things, to media reports of mishandling of customer funds and alleged investigations by US authorities.
The announced rescue of the crypto giant Binance was initially only a non-binding statement of intent, as the boss Changpeng Zhao (45) pointed out. After the audit began, Binance quickly backed away from the takeover plan.
Zhao and Bankman-Fried are arch rivals
Zhao plays an obscure role back and forth. He himself tweeted on Sunday that he reinforced doubts about FTX’s cash reserves and encouraged a flight of customers there.
Zhao and FTX CEO Sam Bankman-Fried were once closely linked as pioneers and partners in the industry, but have since evolved into arch-rivals with their respective crypto exchanges and recently parted ways over regulatory issues.
Bankman-Fried increasingly became the mouthpiece of the crypto scene, trying to lobby politicians and regulators. Zhao didn’t like that.
Customer safety uncertain
Bankman-Fried now faces the ruins of his FTX corporation. Just a few months ago, he was considered a prodigy and a beacon of hope in the crypto industry, helping financially weak companies.
How this will continue for FTX customers is unclear. Bankman-Fried assured that all deposits are protected and will be paid in full.
On Wednesday, Bankman-Fried informed its own investors who had put money into FTX about the liquidity gap. Shortly after, Binance abruptly withdrew its takeover bid.
“I screwed up”
“I screwed up,” Bankman-Fried told investors in a conference call, according to people with knowledge of the call, according to Bloomberg. He said he would be “incredibly, incredibly grateful” if investors could help.
According to the financial agency Bloomberg, FTX needs four billion dollars to remain solvent. Bankman-Fried is seeking to raise bailout funds in the form of debt, equity or a combination of the two.
It is also still unclear where and how FTX’s insolvency proceedings could take place. While the company has a subsidiary in the United States, it is incorporated in Antigua and Barbuda and based in the Bahamas. (SDA/kae)