Crypto Exchange FTX Files for Bankruptcy, CEO Resigns

Saturday - 12/11/2022 06:06
The exchange’s founder, once seen as a steady hand in the world of digital assets, is under investigation and his company filed for bankruptcy
Sam Bankman-Fried, shown in 2021, resigned as chief executive of FTX. ANTHONY KWAN FOR THE WALL STREET JOURNAL
Sam Bankman-Fried, shown in 2021, resigned as chief executive of FTX. ANTHONY KWAN FOR THE WALL STREET JOURNAL

In a matter of days, Sam Bankman-Fried has gone from crypto hero to villain.

His billion-dollar fortune has collapsed. He is facing Justice Department and Securities and Exchange Commission investigations. His firm, FTX, is bankrupt, and with it many hopes for the future of crypto itself.

An outwardly genial 30-year-old commonly referred to as SBF, Mr. Bankman-Fried was until this week the industry’s leading champion. His firm’s finances were opaque, but he seemed to be an open book on Twitter and in scores of media interviews.

Bill Clinton, Tom Brady, Katy Perry and other boldfaced names trekked to FTX’s Bahamas base to appear with him at a conference he organized to promote his vision of a sophisticated financial system built around digital assets. He spoke recently of becoming the world’s first trillionaire. He gave liberally to political candidates and causes, and he became an advocate of effective altruism, a trendy philosophical movement that encourages young people to make big bucks so they can donate fortunes to charity.

Another side to Mr. Bankman-Fried emerged as his firm grew. He was brusque and insulting with overseas regulators and others, said people involved in the meetings. He demonstrated a cocksure style in negotiations to buy struggling crypto companies. He courted U.S. politicians and regulators, and seemed to egg on their scrutiny of his rivals.

And behind the scenes, FTX was using billions of dollars of customer money to fund risky trades by Alameda Research, a digital-currency firm he also founded. Revelations of the practice this week shocked Mr. Bankman-Fried’s admirers, as well as many of his own employees. The undisclosed loans tore a hole in FTX’s finances that set the stage for the exchange’s swift implosion earlier this week.

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Author: Editors Desk

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