FTX collapse: Rising troubles for FTX founder Sam Bankman-Fried

The problems for Sam Bankman-Fried are only increasing as Federal agencies are investigating the biggest collapse in the Crypto market. Just a week ago, FTX Exchange was one of the most popular crypto exchange companies in the world. But since then, the company has fallen from being a crypto leader to being nothing. The founder of FTX, Sam Bankman-Fried lost almost all of his fortune of $32 billion. Along with this, Sam Bankman-Fried is being questioned by SEC and US lawmakers regarding his company’s downfall. If he is proven to be guilty in this situation, he could be awarded a possible jail sentence on the grounds of scamming people. 

Sam Bankman-Fried took to Twitter last Friday stating that he will be fully explaining the situation and how his company collapsed. On Monday and Tuesday, Bankman-Fried made a series of tweets where he promised people that he will explain what exactly happened with FTX but first the people should look at where FTX currently stands. As of today, Sam Bankman-Fried has lost almost all of his fortune and has no net worth which could support his businesses. Bankman-Fried was the owner of two companies, trading firm Alameda Research, and cryptocurrency exchange FTX. Both of these companies have filed for Bankruptcy. 

As per the investigators, FTX was hacked by some intruders who had acquired the funds available at the FTX. Because of this hack, the users were notified not to use the FTX apps as doing so would have compromised the security of their devices. But due to the possibility of attack, people rushed in to get their withdrawals from FTX, to which the company said that it does not have the money. According to Bankman-Fried’s statement, withdrawals of around $6 billion were filed within just six days. Contrary to the panic of his customers, Bankman-Fried said that he is feeling relieved after the downfall of FTX. The downfall of FTX also took down Almeda Research, as most of its resources were invested in FTX. He said that many expected him to lose his sleep due to both companies being bankrupt, but he is coping better than expected and has been getting enough sleep. He also admitted that after the events, he has been playing video games as a coping mechanism.

Multiple reports suggest that Bankman-Fried contacted investors to offer money for covering the withdrawals made by Almeda Research, but was denied by everyone. It is estimated that this amount is as big as $10 billion. Changpeng Zhao, CEO of FTX’s rival, Binance announced that he is ready to buy FTX and bail it out of the situation. But later he refused to buy the company stating that it is in no condition to be worth anything. Bankman-Fried later accused Zhao that he had no intentions to buy FTX but of just doing everything to ruin the company’s reputation even more. This event did lead to the downfall of FTX as it exposed the bankrupt situation of the company. This is how one of the biggest crypto exchanges went from a billion-dollar company to a bankrupt company, and at the end of all this, the customers were the ones who lost their hard-earned money.