FTX Crypto Scam is making controversies all over the internet. The court declares imprisonment for 25 years to former FTX CEO Sam Bankman-Fried for his crypto scam with FTX consumers and venture capitalists. More than eight allegations against him claim around $8 billion to be missing. The users of FTX apps were not able to withdraw their money as he took the money of those users to give elsewhere. However, the company is now mentioning that they have enough resources to pay off all the debts of the users.
Who Is Sam Bankman-Fried?
Sam Bankman-Fried was born on 6 March 1992 at Stanford, California, United States. He has been a fast learner since his childhood. Born in an influential background, he got exposure to the business world early in his life. Sam enrolls in Massachusetts Institute of Technology to complete his graduation majoring in Physics. He completed his education in 2014. However, he was aware of the ongoing innovations in the market. Sam has been fascinated with the innovations since his younger age. Cryptocurrency was becoming big at that time. He gave his full attention to earning huge money from it later.
Sam Bankman-Fried Parents
Sam Bankman-Fried parents are Barbara Fried and Joseph Bankman. Both his parents are influential personalities in their fields. Her full name is Barbara Helen Fried. She is an American Lawyer and Professor Emeritus at Stanford Law School. On the other hand, his father Joseph Bankman is a legal scholar and psychologist. He teaches legal ethics at Stanford Law University. As per some sources, he has also worked at his son’s company.
Sam’s parents met while teaching at Standford University. They have been together since 1988. After he was exposed to the world about his company’s scam, his mother presented a six-page letter to the judge in his court hearing. The letter explained her son Sam’s personality well. She says that he wishes good for others and finds happiness if others are happy.
How Sam Bankman-Fried Become A Billionaire In His Twenties?
Sam Bankman-Fried started working at Jane Street as a trader after completing his graduation. After working for three years in the company as a trader, he was looking for some more opportunities. While exploring some other opportunities, he already left Jane Street and was working as a Director of Development at The Centre for Effective Altruism. Within two months, he gets to know about the increasing scope of cryptocurrency.
He finds that there is a scope in trading cryptocurrency. Sam came up with a company, Almeda Research in 2017. The company offers a simple deal to the investors asking to invest their money with Almeda Research. In return, they will trade in cryptocurrency and provide them a 15% return with no drawdowns. Thus, Almeda acted as a hedge fund for crypto. All the investors started inclining towards his deal at a bigger level.
His company was the only company getting investment from all the top 25 venture capitalists together. With high-profile people meeting him, he started being in the limelight. Everyone was eager to know more about him. He started giving more interviews. The media was always around him focusing on what he was doing. Sam used to have one of the biggest crypto conferences named Crypto Bahamas.
While he was running Almeda Research successfully, people started to know him better. Everyone had a good image of Sam in their minds. The big reason is his down-to-earth personality and donations. He was so humble that he used to answer each media person by himself. Sam successfully donated $40 million in his late twenties. He also has political donations worth more than $80 million. Thus, Sam has donated more than $100 million. He is said to have the highest amount of political donations. Why is Sam getting imprisoned then? Let us have a look at the crypto scam below.
FTX Crypto Scam Explained: The Beginning To End Of FTX Crypto Scam
As Sam was running Almeda Research successfully, he formed another company FTX which is a crypto exchange. The company started in 2019. It was the period of COVID and lockdown. People were sitting at their homes. The company started in the Bahamas as it had fewer restrictions on crypto businesses. FTX is a cryptocurrency exchange that gave tough competition to Binance. FTX was said to be the second-largest crypto exchange in the world.
FTX launched its own coin FTT after some time. The company asked its users to buy FTT coins. They also introduced additional benefits to those buying the coin. Sam said that the FTT coin buyers will get fewer brokerage charges and other premium benefits. While the others not buying the FTT coin will not get any additional benefits. As people were trusting him already, they started buying FTT coins. Many sources mention that the company also put its own revenue in the FTT coin.
Thus, there was no actual cash in the company’s bank account. During that time, Luna’s coin crashed badly. It led to a huge loss in the crypto market. Thus, the VC investing in crypto started becoming cautious. They asked all companies where they invest to put their money in their VC’s bank account, saying they would return it the next day. This was to make sure whether the companies actually had enough money or not.
As Sam was having the money invested in FTT coin, he was left with no option to transfer money to VC. Binance’s former CEO, CZ also mentioned that he will buy a 20% stake in FTX. However, there was a lot of confusion about whether Binance actually wanted to buy. Changpeng Zhao, Former CEO of Binance, decided to sell its stakes brought earlier. Sam pays 550 million as an FTT token to CZ and the rest in cash.
Upon not getting the deal of 20% stake buying from Binance CZ, the company declares Bankruptcy. As per details, 8 billion dollars are missing. It includes money from VC and also the users of the FTX app. Sam utilized the money from the FTX user’s brokerage account to cover the actual truth. However, customers not able to withdraw their money now were getting angry. The lawsuit filed against him with more than eight allegations of money laundering and other scams led him to imprisonment of 25 years.
Many tried to claim bankruptcy also to recover their lost money. Recently, news became viral when Sam said that the company could re-pay all the debts from its assets. They have more than they owe. We hope you get enough details about FTX Crypto scam above. Keep reading with Charcha Times for more information.
