It has been a sad turnaround in the crypto world as margins drop others are completely bankrupt, this holds true as one of crypto’s richest turned from a networth of $26 billion to $0 overnight and formally resigned his CEO position, but how did this happen?
Sam Bankman fried who was Silicon valley’s favorite was founder of FTX token (FTT) which he used as collateral to collect billions of dollars which He might not have been able to pay back, he then used this borrowed cash to buy stakes in BlockFi and Voyager which are crypto exchange companies that were already struggling financially.
At the moment, lawyers say that FTX misappropriated users funds and is a violation of it’s own terms of services. Sam might not have been able to take the heat which saw his early exit from his CEO role and He is currently being investigated by the SEC.
What users are asking now is where did all the money go? He used $4 Billion to try and save his dying hedge fund (FTX), He spent $21 million on super bowl commercials and $40 Million in campaign donations. He also used billions of FTX’s users deposit to fund Alameda research which is a company that He founded in 2017. His company now faces liquidity crisis and have currently frozen user’s ability to withdraw.
FTX agreed to be bought by rival crypto company Binance but thier rival pulled out 2 days later. This heavy disruption of the crypto market and has many casting doubts on the entire system. There are some who are calling for the crypto market to be regulated.