After the empire of the supposed crypto genius and FTX CEO Sam Bankman-Fried began to crumble in November, the next development followed: The 30-year-old was arrested by Bahamian authorities.
Who is it about? Sam Bankman Fried is a 30-year-old American who was considered something of a financial prodigy or crypto genius. In a Zoom meeting, Bankman-Fried convinced investors to buy his app FTX while playing LoL. The impressed investors then invested $214 million in the 30-year-old’s company.
In November 2022, revelations followed that caused the 30-year-old’s empire to crumble
What happened in November 2022? Bankman-Fried is said to have held 14.6 billion US dollars in the in-house cryptocurrency “FTT” (FTX Token) via the crypto hedge fund Alameda Research (via cryptonews.de).
This has led to a loss of confidence in the cryptocurrency, as Bankman-Fried is also the founder of Alameda Research and it is a bad sign when a company holds so much value in its own currency.
Following the revelation, the takeover of FTX by competitor Binance fell through. Also, Binance announced it would withdraw about $2.1 billion from the FTT currency (via Twitter).
Shortly thereafter, the FTX token collapsed, dropping from $26 to $4 in an instant. Bankman-Fried’s fortune also fell from $15.2 billion to $991.5 million within a short period of time – an alleged loss of over $14 billion. On top of that, FTX filed for bankruptcy in November 2022.
Allegations of misappropriation of customer funds
Why was Bankman Fried arrested? The New York Attorney’s Office announced on December 13, 2022 that Sam Bankman-Fried has now been arrested by local authorities in the Bahamas at the request of the US government (via Twitter).
As the New York Times reports, prosecutors in Manhattan are investigating whether FTX broke the law. Accordingly, it is being examined whether FTX has transferred billions of dollars in customer funds to the crypto hedge fund Alamada Research, founded by Bankman Fried, and embezzled them in the sense that, according to Business Insider, this is said to have led to high losses on the part of customers.
Likewise, according to the NYT, prosecutors are investigating whether Bankman-Fried and Alamada Research were involved in market manipulation that may have contributed to the failure of two well-known cryptocurrencies last spring.
What is FTX? FTX is a trading platform founded by Sam Bankman-Fried. Users of the platform can trade cryptocurrencies through it.
In 2021, FTX bought into esports organization TSM and became the naming sponsor of the team active in various games such as League of Legends, Apex Legends and Rainbow Six: Siege. From then on, TSM competed as “TSM FTX”, but Riot Game objected.
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