Who is Sam Bankman-Fried? How did FTX’s Madoff bamboozle so many people?
SBF
Sam Bankman-Fried (SBF) co-founded FTX, a world top 5 exchange by volume. The American resigned as CEO on November 11 after declaring his company bankrupt.
Born in 1992 at Stanford, he is the son of Barbara Fried and Joseph Bankman. Both are professors at Stanford, the most prestigious law school in the world.
SBF is also the nephew of Linda Fried, director of the Columbia University Mailman School of Public Health. The latter is a scientist in epidemiology, member of the World Economic Forum. More specifically, Linda Fried chairs the “Council on the Future of Human Enhancement”.
This branch of the WEF touches on transhumanism. That is to say, a school of thought that aims to improve intellectual and physical abilities through genetic manipulation, nanotechnology and artificial intelligence…
SBF therefore has a long arm, which enabled it to integrate the MIT engineering school. Unfortunately, the prodigal son went on to pursue a trading career by joining Jane Street Capital. Shortly after, he co-founded the investment company Alameda with his school friend Gary Wang.
It is by taking advantage of bitcoin price differences between the United States, Korea and Japan (arbitrage) that SBF makes its fortune. Owning about 90% of Alameda, SBF was raking in up to $20 million a day.
The young billionaire quickly creates theexchange FTX (Fu-Tures eXchange) in the Caribbean tax haven of Antigua and Barbuda in April 2019. Three years later, FTX is worth $32 billion and has over a million users.
This dazzling success is accompanied by fame for SBF, which sets itself up as an autistic philanthropist. Not to mention the millions spent on advertising, especially during the Super Bowl halftime:
We really need read what Sequoia wrote (the largest firm of Venture Capital in the world) about SBF to believe it:
Extract :
“After my interview with SBF, I was convinced: I was talking to a future trillionaire. The charm he exerted on the leaders of Sequoia – who fell in love with him after a Zoom – had the same effect on me. […] I don’t know how I know it, but I know it. SBF is a winner. […]. I felt something else: something in my heart, not just in my guts. After sitting ten feet away from him for most of the week, studying him in a startup’s human arena, and chatting between naps, I couldn’t help but think that this guy is as selfless as he claims. »
“Disinterested”… Nice linguistic anesthesia to describe a guy who was still worth 16 billion dollars a few days ago. But it is so. SBF knew how to fool its world by fashioning an image of altruism, claiming to be “utilitarian”:
“For me, utilitarianism means making as much money as possible and becoming the happiest person”(and then donate that money with a view to having as positive an impact on the world as possible, supposedly), he said in this interview.
In short, this philosophy of maximum enjoyment suggests that the selfish pursuit of personal interest would ultimately benefit the general interest.
In any case, this is what this tartuffe would have us believe through a few starving donations. Or how to ease your conscience by distributing other people’s money.
Add to this billionaire denial that utilitarianism was theorized by Jeremy Bentham, the father of the panopticon…
The fall of FTX
FTT is the token of FTX. As a good shitcoin, it also comes from the Ethereum blockchain…
There are 350 million units. And as always in scams, half was “pre-mined” in favor of FTX. The other 175 million were sold for $1 each to FTX users.
These FTTs are used to pay transaction fees. The interest for their holders is that FTX destroys a third of the FTT it collects in transaction fees. In other words, the FTT should theoretically appreciate over time. Except that…
Except that FTX’s 175 million FTTs finally hit the market on September 28, 2022 (those FTTs couldn’t be spent for three years).
A month later, Alameda, SBF’s investment company, finds itself in the spotlight following its leaked balance sheet. CoinDesk reveals that $3.7 billion of Alameda’s $14.6 billion in assets are freshly released FTT tokens.
In other words, FTX lent millions of FTT to the SBF investment fund which, according to Samson Mowhad a « 4 billion dollar hole in its balance sheet.
The world discovers Caroline Ellison, the CEO of Alamena, who fails to reassure the CEO of Binance. On the contrary, CZ announces to sell his 23 million FTT so as not to be the turkey of this Ponzian farce, “like with LUNA”…
[Un très bref contexte expliquant pourquoi Binance détenait tant de FTT : Binance avait investi dans les actions de FTX dès son lancement. Binance décide toutefois de tout vendre le 20 juillet 2021 et se fait payer en FTT.]
Meanwhile, videos of Caroline Ellison resurface. His detachment from risk management is not reassuring. Just like this tweet in which Caroline, SBF’s former girlfriendadmits fueled by amphetamines…
One thing led to another, FTX finds itself inundated with withdrawals and sinks into a liquidity crisis. And finally solvency.
According to the FinancialTimes, FTX international holds only $900 million in liquid assets against $9 billion in liabilities. ZeroHedge has procured the balance sheet that FTX communicated to potential buyers (confirmed by bloomberg).
It appears that just over half of FTX’s liquid assets consist of Robinhood shares ($472 million).
Among the “semi-liquid” assets of FTX, we find the equivalent of 2.1 billion “seras”. It is a token for decentralized exchanges that runs on the Solana blockchain.
Problem, the market capitalization of the serum token now weighs less than 100 million dollars…
FTX’s balance sheet also contains the equivalent of $981 million in Solana and $543 million in FTT which are no longer worth anything.
In the non-cash department, note what looks like a $7.3 million online bet on Donald Trump’s upcoming defeat (trumploses). Unbelievable…
And to top it off, quoting on-chain analysis by analytics firm Argus, The Wall Street Journal reports that Alameda was illegally buying tokens before FTX listed them.
Speaking of politics…
SBF was one of the biggest donors to President Joe Biden’s campaign. The tartuffe spent more than 40 million in hopes of influencing crypto regulation in the US Congress.
As a result, it was under the chairmanship of Democrat Joe Biden that the FED finally decided to take an interest in the CBDC. Also, we are still waiting for the Bitcoin ETF…
But all this will not surprise our readers. We sounded the alarm in May following his interview in the Financial Times.
The ex-billionaire declared that bitcoin has no “no future as a means of payment “, contrary to Proof-of-Stake. He even dared to let go that bitcoin’s transaction speed was linked to its energy consumption…
The fall of this shitcoiner which had the ear of the US Congress for too long will delight more than one maximalist. We must now hope that the Republicans led by Senator Cynthia Lummis, now in the majority in the lower house, do what is necessary.
Either way, it’s important to understand that FTX has nothing to do with bitcoin. You shouldn’t confuse everything. Granted, the FTX debacle is rubbing off on bitcoin. So much the better, everyone can get it at a low price.
But fundamentally, FTX is the antithesis of bitcoin. The shitcoine casino is what the maximalists tirelessly warn against. The leitmotif is and will remain: Not your keys, not your bitcoin. Here is the only regulation to which it is necessary to compel oneself!
We bet that more than one maximalist will be forged in these shitcoin infernos. This is suggested by the massive withdrawals of BTC from the exchanges. Welcome maximus!
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