Until a few days ago, 30-year-old Sam Bankman-Fried was considered a cryptocurrency business genius and a visionary who came up with a visionary idea of how money would work in the future. As CEO of the crypto exchange FTX, he was in charge. His fortune was estimated at 15 billion US dollars, he even bought into the League of Legends: his company became the name sponsor for the LoL team TSM. But that all seems to be going up in smoke now.
This story is going around about the CEO right now: In September, a story appeared about the 30-year-old CEO, who at the time was considered by many to be some kind of financial prodigy. He was someone who was considered part of a new generation of tech pioneers, something like “Frank Thelen in Gut”.
The story from September 2022 probably describes him best: As head of the crypto exchange FTX, he had an extremely good meeting with potential investors. In a Zoom call, Friedmann envisioned FTX as a ‘super app that lets you do whatever you want with the next dollar’:
You can buy the dollar via FTX, for example
The meeting blew the minds of potential investors, who invested $214 million in the 30-year-old’s company and raved about how amazing the Zoom call was. One said it was one of those meetings that “blows your hair backwards.”
Turns out Bankman-Fried held this Zoom meeting while playing the MOBA League of Legends. An employee is quoted as saying:
I’m sitting 3 meters away from him, I walk over and I’m like, shit, that was really good. And then it turns out that ass was playing League of Legends the whole time through the meeting.
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Super Bowl commercial costs $25 million
What has he done? Bankman-Fried used the money for a few things:
Bankman-Fried Hailed As Revolutionary Tech Genius With “Robin Hood Mentality Who Sleeps In A Beanbag To Stay “In Work Mode” (via Bloomberg)
Here’s the Larry David Super Bowl 2022 commercial for FTX:
What does he have to do with LoL? Bankman-Fried once said (via twitter) that he sleeps little anyway and works a lot. When he’s not working, he’s often out and about in League of Legends:
“I play a lot more than you’d expect from someone who regularly trades work for sleep.
Why? Well, there is an answer that is obvious. The one thing everyone says about LoL who play it is: I wish I didn’t play it […]
Some people drink too much, some gamble – I play League of Legends.
The success of his company relied on the image of the founder as a genius who understood things
Why was that so important? As the site Kotaku explains, FTX’s success depended almost entirely on investors having complete faith in Bankman-Fried and his genius.
Kotaku writes: People wouldn’t have invested in FTX, but actually in Bankman-Fried, the Magic: The Gathering nerd and the financial genius.
Kotaku believes the motivation behind investing in FTX was that even if you don’t understand all the crypto stuff, there’s this one guy who does, and he’ll make you billions of dollars with his really clever ideas.
In this extremely cool clip showed
The coin falls, a merger fails – the fortune is in free fall
What went wrong now? Bankman-Fried’s empire is crumbling. In a Nov. 2 article, crypto site Coindesk explained that Bankman-Fried holds $14.6 billion in the coin FTT, which FTX developed, through another firm.
This was seen as an extremely bad sign when a single company is making so much money on a cryptocurrency. This has apparently shaken confidence in the coin.
His company FTX, which was actually supposed to be taken over by competitor Binance, is now in the rain – Binance has withdrawn the takeover bid.
Binance has even announced that it will withdraw its approximately $2.1 billion from FTT “after the recent revelations”, which apparently really hurt.
$14.6 billion ‘wiped out’
As a result, the price of the FTT coin collapsed extremely: it fell from $26 to $4. A year ago, in September 2021, the coin was even worth $84, of which 96% are now missing.
Bankman-Fried’s “net worth” has also dwindled enormously in a short period of time: As the site Bloomberg knows, on November 8, the value fell by 94% in one day:
With that, $14.6 billion was “wiped out” overnight.
Exactly the kind of news that investors really don’t want to see.
This is another one of those crypto stories that shows you how volatile and ephemeral the whole virtual currency business is, which you can’t see and which is heavily based on trust and belief. Once trust is shaken, it seems to be inexorably falling.
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Bankman-Fried resigns from all offices
Update 11/12, 12:45 p.m.: Crypto exchange FTX filed for bankruptcy on Friday, November 11th. CEO Sam Bankman-Fried has resigned from all posts as CEO.