The FTX cryptocurrency exchange collapse has sent ripples throughout the financial world and in the homes of regular, everyday citizens. FTX is a company headed up by Samuel Bankman-Fried, a 30-year-old financial entrepreneur from California. Bankman-Fried (also known as SBF) and his company rose to prominence pretty much overnight just about three years ago.
FTX was formed off of the company’s base crypto token, FTT. This token is essentially worthless and has now been discovered to simply be a tool for SBF to raise real money to keep the company going. Some of this money was allegedly used to save his failing hedge fund. This is, of course, a felony.
The house of cards came crumbling down after the co-founder of another crypto company called Binance (Changpeng Zhao) decided to pull the company’s holdings of FTT. This caused a “run” on the “banks” of FTX, causing them to not be able to pay out money that was owed to people who had invested in their platform. Investors who poured into the company lost pretty much all of their money unless they were part of the group that pulled out.
Interestingly enough, FTX was formed just 13 days after President Joe Biden announced that he would be running for President. This is an important fact to note considering SBF became the second largest donor to the Democratic party essentially overnight. His mother, Barbara Fried, is a Stanford lawyer and professor who is also a big-time fundraiser for the Democratic party. This story is much deeper than just a simple failed crypto token and platform.
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