New Delhi: Accused of perpetrating one of the ‘biggest financial frauds’ in the US, and globally in the cryptocurrency market, Sam Bankman-Fried, popularly known as SBF, while under house arrest in Northern California Awaiting trial in October. He lives with his parents and a German shepherd named Sandor.
The once famous young billionaire, with an estimated worth of $26 billion, is now disgraced, “almost penniless and friendless”, and is going down in history for tarnishing the reputation of a crypto industry that was already regarded as a credible I was struggling to be recognized. Medium of exchange and investment asset class.
according to a interview published in puck news This month, Bankman-Fried isn’t quite sure where Sandor came from, but vaguely remembers it was a gift from his parents. His parentage and Sander, which means “protector of men”, is currently held by the SBF in the world.
business Insider Reported That SBF told Puck News that he had “nothing left” – in terms of relationships and support – after “most of his friends” betrayed him. The SBF had said, “I don’t blame people for wanting to try to avoid getting involved in shitshows.”
The “shitshow” the SBF is referring to is a major alleged financial fraud resolved around its crypto business in November 2022. was a shocking departure considering the SBF fate’s cover boy for its August/September issue of the same year.
US Commodities Futures Trading Commission Estimate that the alleged fraud resulted in client losses of up to $8 billion.
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Biggest financial scam
Born on March 6, 1992, in Stanford, California, in Silicon Valley, Bankman-Fried was born to parents who are Stanford professors. SBF graduated from the Massachusetts Institute of Technology (MIT) with a major in physics and moved to Wall Street at the age of 21 to trade cryptocurrencies. According To Vocal,
In 2017, SBF co-founded a business venture called Alameda Research LLC – a quantitative trading firm – with another crypto trader, Tara McAuley.
Two years later, in 2019, Bankman-Fried co-founded another company called FTX Trading Ltd. with Gary Wang, with whom she studied at MIT. FTX was an online platform that retail investors could use to buy and sell cryptocurrencies. FTX went bankrupt in 2022 but at its peak, it was one of the largest crypto exchanges in the world and had at least five lakh Customers are putting their savings on it.
The relationship between Almeida and FTX was very tight and this is one of the reasons why the whole scandal came to light.
according to a new York Times report good SBF started FTX to bring capital to Alameda, a quantitative trading firm that operates like any old hedge fund, using arbitrage trading methods to find mathematical results to buy and sell cryptocurrencies. uses the model. This meant the simultaneous buying and selling of assets held on different exchanges in order to profit from the price difference. This price difference lasts for a few minutes or even seconds, so identifying trading opportunities requires sophisticated software based on mathematical models.
The money needed to buy the crypto was obtained by Almeida from lenders and later through FTX. For example, FTX created a token called FTT. If customers use FTT to pay for other currencies purchased through FTT, they get a discount, hence increasing its usage. Meanwhile, Almeida was the main trading firm buying and selling most of the FTT tokens, so Almeida was able to control the price of FTT.
FTX began using FTT to invest billions of dollars in other crypto companies, while Almeida began using FTT as collateral to take out more loans to fund his business.
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The rise and fall of SBF
SBF subscribes to a slightly flawed, but very catchy, movement called Effective Altruism – Earn as much as you can to give. The problem begins when effective philanthropy is primarily driven by a few massively wealthy billionaires who decide how their philanthropy affects the public.
After leaving Wall Street to start FTX, SBF quickly became a billionaire and is estimated to be worth $26 billion by early 2022. , who are now billion-dollar tech giants.
SBF became a brand ambassador for the crypto industry. He was helping the US Congress formulate its vision for regulating the crypto industry. SBF was “of”largest individual donors“To Joe Biden’s campaign in 2020.
Then cracks began to appear and the end came faster and faster.
according to a report good Published on November 2 last year, Almeida’s assets did not hold other fiat currency or crypto assets and most of its assets were a token called FTT that was issued by its sister firm FTX.
This news started a race on the FTT, with customers rushing to sell assets that may have become worthless.
Arguably the biggest impact came from Binance, the world’s largest crypto exchange $500 million in sales The value of FTT around 7th November. As of November 9th, Binance moved back A deal to buy FTX to protect the exchange.
In addition, venture capitalists such as Sequoia had invested $150 million in FTX, said it was reducing it to zero.
As of 11 November, SBF stepped down FTX as CEO and the firm filed for bankruptcy.
On November 17th, SBF explained in a series of tweets how FTX was heavily leveraged and could not pay all customers who were trying to withdraw cash. “I was on the cover of every magazine, and FTX was the darling of Silicon Valley…” he Told In a 32-tweet long thread.
“And then came the crash. In a span of a few days, a historic crash happened – more than 50% in most correlated assets, without any bid side liquidity,” he said. “Approximately 25% of client assets were withdrawn each day – $4b. As it turned out, I was wrong: leverage was not $5b, it was $13b. $13b leverage, total run on the bank, total collapse in asset value” , all at once.
As the situation worsens, till 14 November reports It came to light that “at least $1 billion of client funds” were missing from FTX and that SBF “secretly transferred $10 billion of funds to trading firm Alameda”.
was sbf Arrested A month later in the Bahamas where he was living and later he was extradited to the US. He was released on $250 million bail, after which he moved to his parents’ home in Stanford.
SBF has eight criminal charges Include The US Department of Justice said in a press statement, “the widespread fraud scheme that contributed to the downfall of FTX and for a campaign finance scheme that sought to influence public policy in Washington”. free On 22 December.
this is where puck news Caught with him, he is placed under house arrest at his parents’ home, with only his parents and Sander to support him, until his trial begins in October.
Surviving SBF in other waking nightmares includes trying to live only on peanut butter He was kept in prison in the Bahamas.
Until last year, SBF was a young billionaire working in the Bahamas, with lots of friends, and a great reputation. Today, he is at the center of “one of the largest financial frauds in American history”. Now, he only has US$100,000 in the bank, according to a report good,
Meanwhile, SBF Told“Some people may have billions of dollars in client assets to use for legal fees right now, but I’m not one of them”.
(Editing by Anumeha Saxena)
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