The story behind the downfall of the ‘King of Crypto’

Sam Bankman-Fried, whose wealth was $16 billion last week, had to resign as CEO after losing everything.

In the world of business, the collapse of titans is not unheard of. However, when it happened to Sam Bankman-Fried, known as the “King of Crypto,” it rocked the whole IT and crypto industries.

Sam’s net worth was $16 billion a week ago; it fell to zero in a single day, and his company FTX has now declared bankruptcy. It has come as a shock to find that more than 94% of Sam’s wealth has been lost in the crypto sector, which is rife with stories of losses.

Sam has resigned as CEO, but this is only the start of his difficulties as he must deal with federal inquiries into the business’s finances.

According to estimates, FTX has 1.2 million registered users who utilise the platform to purchase cryptocurrencies like Bitcoin.

What specifically contributed to this decline, which is often referred to as the largest financial catastrophe in cryptocurrency history?

Industry insiders claim that a subsidiary company, Alameda Research, was using FTX accounts to trade billions of dollars while using the native token of the exchange as collateral. The US Securities Law is obviously broken here as well as the terms of service for FTX.

Although FTX has been looking for finance for a while to get through its financial difficulty, the decline was completely unanticipated.

Ryne Miller, a lawyer representing FTX, tweeted, “As widely documented, unlawful access to certain assets has occurred,” hinting at the maze of issues the company is dealing with.

It is claimed that Alameda Research borrowed billions from FTX customers rather than storing any cash for trade. Alameda Research, run by Caroline, a friend of Sam’s, is currently closing as well.

FTX was a $32 billion cryptocurrency powerhouse a week ago, but it is currently mired in a severe financial crisis. The business has said that it has halted trading, withdrawals, and the offline movement of digital assets since word of the catastrophe spread.

Sam founded the FTX cryptocurrency exchange in 2019 with the assistance of Garry Wang, who was employed by Google at the time. Sam rose to super-hero status in the cryptocurrency community as a result of the company’s enchanted ascent to fame and wealth. He subsequently fell.

As it advances, we’ll stay in regular contact to decide what’s best to do next.