From Crypto Savior To Being Up Against The Ropes — How It Turned Around For FTX’s Sam Bankman-Fried ⋆ ZyCrypto

From Crypto Savior To Being Up Against The Ropes — How It Turned Around For FTX

From Crypto Savior To Being Up Against The Ropes — How It Turned Around For FTX's Sam Bankman-Fried




  • FTX’s founder earned the title of being crypto’s white knight after a series of bailouts to troubled firms in the industry.
  • Barely six months after the glowing accolades, the tides appear to be turning for Sam Bankman-Fried, given the speculation about the balance sheet of Alameda Research.
  • A number of firms are taking a piece of the speculative attack on FTX and Alameda Research.

Crypto’s golden boy is facing pressure over the balance sheets of one of his companies, but only six months ago, he was saving distressed firms in the ecosystem from implosion.

Sam Bankman-Fried, the founder of FTX and Alameda, grabbed the spotlights early in the year after earning the title of being the youngest billionaire at 29 with a net worth of $22.5 billion. A few months later, the “crypto winter” kicked in, and several firms announced that they were in dire financial conditions, sparking fears of the spread of a contagion.

His company, FTX, entered a deal with cryptocurrency lender BlockFi, offering them a $400 million revolving credit facility while his quant trading firm Alameda Research gave Voyager Digital a line of credit that kept the firm afloat.

Bankman-Fried disclosed that several firms in a liquidity crunch reached out to his companies for help, including those engaged in mining digital assets. At the time, he expressed readiness to extend lines of credit to the troubled companies while noting that he still had a “few billions” to hand out.

“FTX has shareholders, and we have a duty to do reasonable things by them, and I certainly feel more comfortable incinerating my own money,” he said.




The reversal of fortunes

It began with the revelation that the bulk of Alameda’s balance sheet was made up of FTX’s FTT tokens which industry players believe to be a somewhat unsafe financial position. Immediately after the story broke, Binance moved to sell off its holdings of FTT tokens in a move it described as “learning from LUNA”.

“Liquidating our FTTT is just post-exit risk management, learning from LUNA. We gave our support before, but we won’t pretend to make love after divorce,” said Changpeng Zhao, Binance CEO. “We are not against anyone. But we won’t support people who lobby against other industry players behind their backs.”

Zhao’s comments have fuelled speculation of a rift between FTX and Binance, which Bankman-Fried retorted by saying that his firm is in a good financial situation. “A competitor is trying to go after us with false rumors,” said Bankman-Fried.

BitDAO, a leading decentralized autonomous organization, announced that it would be holding a vote to decide its next line of action amid speculation that Alameda sold off its BIT tokens as part of efforts to defend FTX. The DAO has asked Alameda for proof of funds which Alameda says it will provide when the storm passes.

In an unexpected turn of events, it was just announced that Binance would acquire FTX in its entirety to prevent a liquidity crisis for its users.

Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.

Source link .

%d bloggers like this: