Last week ftx, the second-largest crypto-exchange, ran out of cash. It is the biggest cryptocurrency disaster yet. Investors wanted to know what they did wrong. Now we have the answer: almost everything.
The result is a scandal so big it goes far beyond those just interested in bitcoin. It links to corruption at the highest levels and may have even played a major role in the United States midterm elections. The media, financial authorities and the Democratic Party are all implicated.
ftx allowed people to easily trade cryptocurrency. Set up an account, and you could buy, sell and save bitcoin or any number of a wide range of new types of electronic money that have sprung up in recent years.
But ftx wasn’t just going to help you get rich. It was going to save the world. Its founder, Sam Bankman-Fried, was saint and banker—hailed as a “future trillionaire,” a “savior” and “the world’s most generous billionaire.” He partnered with the World Economic Forum, spoke at Davos, and visited the White House.
Sam Bankman-Fried, or sbf as he is known, preached the gospel of earning to give, or effective altruism. Yes, he wanted to get rich—but only so he could give it all away.
But what did he do to get rich? And whom did he send the money to?
‘Borrowing’ Money
It looks like Bankman-Fried cheated in spectacular fashion.
Last week, a competitor put out the rumor that ftx didn’t have the cash to cover all the assets it claimed to have in its accounts….
