The demise of the ‘King of Cryptocurrency’ FTX. Sam Bankman-Fried

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By Creative Media News

In less than eight days, Sam Bankman-Fried went from being dubbed the “King Of Crypto” to his company filing for bankruptcy and him resigning as CEO amid government probes into how he managed the company’s finances.

Over the past three years, the internet has been filled with lengthy interviews with him, conducted via video chat from his Bahamas office desk.

Some of them contain an annoying clicking sound.

As his interviewees listen closely to his astonishing tale of how he became a multibillionaire in five years, the American entrepreneur’s mouse emits a continuous and audible clicking sound.

The demise of the 'king of cryptocurrency' ftx. Sam bankman-fried
The demise of the 'king of cryptocurrency' ftx. Sam bankman-fried

It goes “Click, click, click” in short, intermittent bursts.

Mr. Bankman-eyes Fried’s flit around the screen in the interim.

The videos do not reveal what he is doing on his computer, but his tweets provide a very strong hint.

In February 2021, he tweeted, “I’m (in)famous for playing League of Legends while on phone calls.”

Mr. Bankman-Fried, formerly the head of the troubled cryptocurrency exchange FTX, is an ardent player. And he explained why in a series of tweets to his almost one million followers. Playing the team fantasy war game was his way of distancing himself from his daily responsibilities of managing two enterprises exchanging billions of dollars.

Sam bankman fried
The demise of the 'king of cryptocurrency' ftx. Sam bankman-fried

“Some folks drink excessively; others gamble. “I play League of Legends,” he stated.

Since the collapse of the 30-year-bitcoin old’s business in dramatic fashion this week, another story about his gaming has resurfaced online.

During a high-level video chat with their investment team, Mr. Bankman-Fried engaged in a heated League of Legends combat, according to a blog post from venture capital powerhouse Sequoia Capital.

It did not appear to deter them in any way. The consortium then invested $210 million in Mr. Bankman-company, Fried’s FTX.

This Monday, Sequoia Capital withdrew the fawning blog post and said that it is now writing down its investment in FTX as a loss.

Since the fall of Mr. Bankman-$32bn Fried’s enterprise, the firm is not the only investment to have suffered eye-popping losses.

An estimated 1,2 million registered users were utilizing FTX to purchase Bitcoin and hundreds of other cryptocurrency tokens.

From huge traders to crypto enthusiasts, many are left wondering if they would ever be able to retrieve their funds from FTX’s digital wallets.

It is a dizzying decline, and Mr. Bankman-ascent Fried’s is its spectacular tale of risks, rewards, and beanbags.

Mr. Bankman-Fried attended the prestigious Massachusetts Institute of Technology (MIT), where he studied physics and mathematics.

But the young, intelligent undergraduate asserts that his route to wealth was paved with skills learned in the student dorms.

He recounted joining the “effective altruism” movement. Effective altruism is a network of individuals “trying to figure out what practical things you can do with your life to have the greatest possible positive impact on the world,” as he explained.

As Mr. Bankman-Fried recalls, he intended to enter the banking industry so that he could donate as much money as possible to charitable organizations.

Before deciding to play with Bitcoin, he learned how to trade equities during a brief spell at New York’s Jane Street trading business.

He saw the disparities in Bitcoin’s value between cryptocurrency exchanges and began arbitraging or buying Bitcoin from places selling it cheaply and selling it somewhere where it was trading for a higher price.

After a month of modest gains, he joined together with college classmates and founded Alameda Research, a trading company.

It took Mr. Bankman-Fried months to establish ways for moving money into and out of banks and across international borders. But after approximately three months, he and his little team struck it rich.

A year ago, he stated on the Jax Jones and Martin Warner Show podcast, “We were super-dogged.” “We simply kept going. If someone threw another obstacle in our way, we would be resourceful, and if our system couldn’t handle it, we would simply create a new system to get us over that hurdle.

By January 2018, his team earned $1 million every day.

Recently, a CNBC business reporter asked him how he felt about that.

Intellectually and based on his methods, he stated that “it made perfect sense.” He stated, “But viscerally, it startled me every day.”

Sam Bankman-Fried became an official billionaire in 2021 as a result of FTX, his secondary and more prominent business. The crypto exchange became the second largest in the world and an industry behemoth, with daily trades of $10 to $15 billion.

Early in 2022, FTX was worth $32 billion and a household name, with an NBA arena named after the corporation and celebrity sponsors such as NFL quarterback Tom Brady.

Mr. Bankman-Fried appeared to take pleasure in providing his Twitter followers a glimpse into his lifestyle. According to him, he sleeps primarily on a bean bag next to his desk in the office, with a photo of him resting next to his employees’ trading terminals.

In another, he posted during the early morning hours. “Couldn’t sleep. “I must return to the office,” he wrote.

Mr. Bankman-Fried was well on his way to achieving his goal of donating large sums of money to charity. He claimed to have donated “a few hundred million as of today.”

And his generosity was not limited to charitable contributions. In the past six months, the “King of Crypto” has also been referred to as “Crypto’s White Knight.”

The so-called “Crypto Winter” is in full swing in 2022, as the price of cryptocurrency falls. While other companies in the industry struggled, Mr. Bankman-Fried distributed hundreds of millions of dollars in bailout funds.

When asked why he was attempting to prop up failing crypto firms, he told CNBC, “It will not be healthy in the long run if we have real pain and actual blowouts. And that is unfair to the customers.”

In the same interview, he claimed to have $2 billion in reserve to assist faltering crypto firms.

Last week, though, he was touring the same industry in an attempt to gather funds to save his own company and consumers.

An article on the CoinDesk website suggested that much of Mr. Bankman-trading Fried’s giant Alameda Research rests on a foundation largely comprised of a coin that was created by a sister company of FTX, rather than an independent asset. As a result, questions began to circulate about the true financial stability of FTX.

The Wall Street Journal published additional allegations that Alameda Research utilized FTX client deposits as trading loans.

A few days later, however, FTX’s primary competitor, Binance, sold off all of its FTX-related crypto coins in public.

In light of recent findings, Binance CEO Changpeng Zhao informed his 7.5 million followers that the company would be liquidating its shares.

Panicked clients withdrew billions of dollars from the cryptocurrency exchange FTX in response.

Mr. Bankman-Fried blocked withdrawals and attempted to obtain a bailout, with Binance at one point publicly exploring a buyout before withdrawing.

Binance stated that rumors of “misappropriated customer monies and purported US agency probes” influenced its decision.

The following day, FTX was declared insolvent.

Mr. Bankman-Fried expressed regret in a series of tweets, stating, “I’m truly sorry that we’re here.

“It is hoped that things will find a way to heal. Hopefully, this will increase their level of transparency, trust, and governance.”

He also stated that he was “shocked by the way events unfolded.”

Thus was and still is the crypto world. Bitcoin’s price has plunged to a two-year low, prompting many to wonder: if FTX can fall along with its talismanic leader, what could be next?

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