The story of SBF could inspire directors to produce a movie called “The King of Crypto,” Saylor opined.
The Executive Chairman of MicroStrategy and prominent bitcoin bull – Michael Saylor – likened the CEO of FTX – Sam Bankman-Fried – to the notorious Jordan Belfort, also known as “The Wolf of Wall Street.”
In his view, SBF “was using stolen money” and cooperated with corrupt regulators to keep his business going.
Make a Movie About Him
Bitcoin evangelist Michael Saylor believes Bankman-Fried lobbied against “all of the virtues of the industry,” including bitcoin, by using counterfeit finances and bribing certain individuals.
MicroStrategy’s Co-Founder went further, describing FTX’s CEO as “The Wolf of Wall Street” of the crypto sector. Hollywood should focus on him and produce a film called “The King of Crypto,” Saylor added:
“I think this [crypto] crash accelerates regulatory intervention. I mean, in fact, in a sense, SBF is like the Jordan Belfort of the crypto era. Instead of ‘The Wolf of Wall Street,’ they’ll make a movie called ‘The King of Crypto.'”
Jordan Belfort, a.k.a “The Wolf of Wall Street,” is a former trader who pleaded guilty to crimes related to stock market manipulation at the end of last century. His offenses led to a two-year prison sentence, while after his release, he started traveling the world working as a motivational speaker.
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Belfort received additional popularity in 2013 when Leonardo DiCaprio played the “Wolf of Wall Street” in the eponymous film directed by Martin Scorsese.
The crypto community is yet to see how the situation around Sam Bankman-Fried will evolve.
SBF in the Spotlight
The crash of the US-based crypto exchange FTX created a mountain of negativism toward its former CEO.
The world’s richest man Elon Musk was among the critics, saying he was not left with a good opinion on SBF after they discussed the Twitter deal a few weeks ago:
“I got a ton of people telling he’s got huge amounts of money that he wants to invest in the Twitter deal, and I talked to him for about half an hour, and I know my bullshit meter was redlining. It was like, this dude is bullshit – that was my impression.”
The former CEO of Kraken – Jesse Powell – also criticized Bankman-Fried, claiming the latter was inking multi-million sports deals only to nurture his ego. SBF was also buying political favor and donated a significant amount of funds to the Democratic Party so he could emerge as a “media darling,” Powell added
Aside from losses resulting from theFTXhack, the bankrupt exchange is apparently unable to account for $1 billion to $2 billion of client funds, say people familiar with the matter, and itsbalance sheet shows liabilities of $8,859 millionagainst assets of just $899 million.
FTX balance sheets shown to investors by Sam Bankman-Fried
In addition, $10 billion was transferred to sister company Alameda Research and, perhaps most damagingly from a legal perspective, FTX insiders created a “back door” to its accounting systems, according to Reuters reports.
A back door to bypass oversight requirements opens the FTX leadership to charges that they were trying to shield their nefarious activities from the rest of the groups employees.
At least $600 billion lost in hack – and what is balance sheet itemization TRUMPLOSE and other anomalies
So far it is estimated that the $600 million may have been drained from wallets in what was either a hack or nefarious behaviour by insiders.
The sketchy balance sheet shown above includes a number of large “less liquid” and illiquid entries, such as $2.1 billion worth of Serum (SRM) tokens, which when marked to market will be worth much less than the book entry indicates.
There are other strange entries, such as "Anthropic" $500 million; "TWTR" $43.2 million and "TRUMPLOSE" $7.3 million.
TWTR is of course the ticker for Twitter, but it is sitting in the illiquid part of the ledger, which is strange as even though Twitter is now a private company, as a shareholder when it was public, if an FTX entity was a shareholder, FTX should have received $54.20 a share for its stock holding.
As the FTX disaster unfolds, crypto prices remain weak. Bitcoin is off 2% today at $16,565.
FTX crypto operation "run by a gang of kids in the Bahamas"
But as reports emerge about how the close knit executive team lived and worked together – some of them in off and on relationships – the multiplying fears about the way FTX was run are mounting.
A nexus of former Jane Street traders is at the centre of the running of the company out of a Bahamas mansion, where many of the executive live, according to a story on Fortune citing its own and Coindesk reporting.
Damningly, one person in the know said of FTX: “The whole operation was run by a gang of kids in the Bahamas".
There are nine people who are though to live together in the luxury dwelling alongside FTX former CEO Sam Bankman-Fried.
SBF breaking ground for the Bahamas HQ
Among them are Alameda Research CEO Caroline Ellison, FTX co-founder and chief technology officer Gary Wang and FTX Director of Engineering Nishad Singh. According to Fortune the other six are all FTX employees.
“Gary, Nishad and Sam control the code, the exchange’s matching engine and funds,” the first person familiar with the matter said. “If they moved them around or input their own numbers, I’m not sure who would notice.”
Another person said to be familiar with how the company operated claimed: “They’ll do anything for each other.”
Also, Wang, Nishad and Bankman-Fried were the sole board members of the philanthropic arm of the sprawling FTX empire, the FTX Foundation.
Bankman-Fried is a graduate of MIT, as is Gary Wang.
The FTX and Alameda offices are situated next to each other in a compound that they share with various crypto incubator projects.
These internecine relationships made FTX, allegedly, a nest of conflicting interests and oversight nightmares.
Where in the world is Sam Bankman-Fried?
Rumors are now circulating on social media that Sam Bankman-Fried and other members of the top team were on a private jet flight from the Bahamas to Argentina at 01:45 EST on Saturday morning.
The Gulfstream private jet registration is LVKEB and is thought to be an FTX property.
Yesterday, the Gulfstream's journey was the most tracked flight in the world.
However, SBF has since communicated with Reuters via text and he is reported to have replied “Nope” when asked if he was in Argentina, apparently confirming that he was still in the Bahamas.
Cryptonews has also reached to SBF, on Telegram, but by press time had not received a reply.
But on the official FTX Telegram a pinned message from an admin named Jack says they have no idea where SBF is – in other words they are not corroborating the statement the former CEO made to Reuters in which he claims to still be on the Caribbean island of the Bahamas.
Speaking at a conference in Indonesia on Saturday, Binance CEO Changpeng Zhao (CZ) thinks that the FTX collapse has severely damaged the crypto space, setting it back years.
Critics of CZ might argue that he should have thought of that before he triggered what was in effect a bank run on FTX.
“I think basically we’ve been set back a few years now. Regulators rightfully will scrutinise this industry much, much harder, which is probably a good thing to be honest.” said CZ
Solana, which has, up until now, had a close relationship with FTX, is seeing selling pressure in its SOL token continue to increase, down another 7% today to $13.98.
The extreme bearishness has spread to wrapped BTC on the Solana chain, which is down 76% in an ominous sign for those involved in the coin ecosystem.
FTX victims are starting to take proactive action by preparing for a law suit.
Group called FTX CLASS ACTION LAWSUIT (CHAT) with 50-plus members already exists and is growing fast, as some worry that the official telegram could be closed and therefore want to organise independently of the filled exchanges’ outlets.
Group founder AJ told Cryptonews that they haven't hired a lawyer yet but "should be done with that in a couple of days".
In a further illustration of the weak processes that are in place on some exchanges, it has just emerged that crypto.com accidentally sent 320k ETH in customer funds to Gate.io, which gate.io promptly returned – as shown in gate.io proof of reserves.
And there are also doubts being raised in some quarters about the veracity of some of the proof of reserves (PORs) reports that are being published by centralised exchanges. Mario Nawfal, CEO or IBCGroup.io is not impressed by the PORs from Gate and Huobi
In other news, Binance has passed FTT deposits after noticing “suspicious movement of a large amount of FTT”.
The FXT Token (FTT) price continues its seemingly unstoppable descent to $0:
Providing some advice for crypto market participants, CZ tweeted in the past hour or so “@TrustWallet your keys, your coins”, in a reference to the Binance self-custody wallet and the mantra for crypto safety.
Those self-custody lessons seem to have been overlooked by many in recent times, as exchanges appeared to have become safer places to trade and to be trusted with custody of assets.
The Trust Wallet Token (TWT) is up 63% today at $2.02:
Crypto is not all gloom, providing you know where to look – checkout these 2 new tokens
One such area is in presale tokens, which can offer a haven at times like this – providing you pick the right ones.
Two presale tokens catch the eye today – Dash 2 Trade (D2T) and RobotEra (TORA).
Dash 2 Trade is building an analytics and signals trading platform with a state-of-the-art dashboard, featuring, unique presale scoring system, social sentiment analysis and social trading, auto-trading and backtesting.
In a vote of confidence in the project, LBank and, most recently, BitMart has both signed deals to list the token after its presale ends.
RobotEra could be the next hot metaverse gaming project and is akin to The Sandbox. Checkout the video for more info on this 30x opportunity. RobotEra is backed by Kucoin exchange and Polygon Studios.
Vitalik Buterin has shared some thoughts on SBF and the way the community has reacted to the whole fiasco so far.
The co-founder of Ethereum has shared some thoughts on the FTX fallout and, more precisely, on the reaction toward the former CEO – Sam Bankman-Fried.
It appears that the cryptocurrency community is unanimous in its stance against the action of Sam Bankman-Fried, the former CEO of FTX.
The overwhelming majority of reactions are entirely negative, with many calling for prison time and the most severe regulatory punishments.
Vitalik Buterin, the founder of Ethereum, has also chipped in on the matter.
He believes that, as a public figure, SBF deserves everything he’s getting. He even said this is healthy in a bid to reaffirm important values for the community.
On the other hand, though, “Sam the human being” deserves support and love, according to Buterin.
SBF the public figure deserves what it’s getting and it’s even healthy to have a good dunking session to reaffirm important community values.
Sam the human being deserves love, and I hope he has friends and family that can give it to him.
Most of the commentators disagreed with Buterin, arguing that SBF was acting fraudulently and with malice until the very end, even after that.
Before resigning as CEO, he reassured users that the US-based arm of FTX was completely liquid and that it was not caught up in the mess. A day later, it filed for bankruptcy.
In what seems to be a repeated mistake, CryptoCom has once again sent money accidentally, only to recover it later.
FTX’s collapse stirred the cryptocurrency market in a way that not many expected, but there’s some silver lining, however tiny it may seem.
For once, most of the leading exchanges decided to go ahead with their proof-of-reserves and published the majority of their addresses that contained the funds stored on their platforms.
CryptoCom is one of the exchanges that published their addresses, showcasing how much and what cryptocurrencies it stores on behalf of its customers.
However, quickly after the information went public, members of the crypto community discovered a transaction for a whopping 320,000 ETH sent out from one of the exchange’s addresses.
This represented roughly 80% of the ETH stored on CryptoCom.
The company’s CEO, Kris Marszalek, gave an explanation of what happened:
It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.
Despite the explanation, the community is left with a sour taste as to how it is possible to accidentally send a whopping $400 million worth of ETH to an address that was not the designated receiver.
This is not the first time CryptoCom makes a mistake of this kind.
Last year, the exchange accidentally sent $10M to a woman instead of $100. The more alarming thing is that it didn’t discover the mistake for a whopping 7 months.
CZ believes that although the FTX fiasco will have cascading effects, the market will eventually heal itself.
Changpeng Zhao (CZ), CEO of the world’s largest cryptocurrency exchange Binance, has expressed his belief in the ability of the crypto market to heal itself once the full impact of FTX’s implosion is felt.
Speaking at a conference in Indonesia, CZ said that more companies would be affected by FTX’s downfall, considering how big the crypto exchange was.
“With FTX going down, we will see cascading effects. Especially for those close to the FTX ecosystem, they will be negatively affected,” he said, adding that in the end, the “market will heal itself.”
CZ: Crypto Crisis Echoes 2008 Crash
The Binance CEO likened the current crypto winter to the 2008 global market crash, the most severe financial crisis since the Great Depression.
CZ noted that the global economic crisis is “probably an accurate analogy” to the recent happenings, adding that the full impact of FTX’s collapse is yet to be felt. He said the downfall would have cascading effects and that more companies would fail in the coming weeks.
Zhao’s comments follow the sudden collapse of now-ex-billionaire Sam Bankman-Fried’s crypto empire FTX.com and Alameda Research. FTX and over 130 of its affiliates have already filed for bankruptcy, with Bankman-Fried stepping down as CEO.
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The series of ugly events, which quickly unfolded this week, sent the crypto market crashing down, with Bitcoin (BTC) dropping to new lows below $17,000.
More Crypto Firms to Fail in Coming Weeks
Recall that Bankman-Fried was popularly known as crypto’s white knight due to the massive bailouts he rendered to struggling crypto firms affected by the market crash in May.
The list of firms he helped includes crypto-lender BlockFi. The former FTX CEO signed a $250 million revolving credit facility deal with BlockFi to allow the lender to continue processing users’ withdrawals. The crypto lending firm has now halted withdrawals following the downfall of FTX.
Bankman-Fried also won an auction to buy bankrupt crypto broker Voyager’s assets for $1.4 billion.
During the conference, CZ said FTX “obviously… won’t have the money” for the Voyager transaction, adding that “a few other projects are going to be in similar situations. I think it will take a couple weeks for most of them to come out.”
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Elon Musk says he had a conversation with SBF prior to the Twitter deal. Here’s what he thought of him.
Elon Musk recently said that he had a conversation with Sam Bankman-Fried before the Twitter deal. He also shared some predictions going forward.
The world’s richest man recently joined a discussion on Twitter with over 60,000 listeners to talk about the FTX hack and bankruptcy.
Musk revealed that he had a conversation with the exchange’s former CEO – Sam Bankman-Fried and that his opinion of him wasn’t the best.
… I got a ton of people telling he’s got huge amounts of money that he wants to invest in the Twitter deal and I talked to him for about half an hour and I know my bullshit meter was redlining. It was like, this dude is bullshit – that was my impression.
Musk said he hadn’t heard of him before that, while adding:
[…] Everyone including major investment banks – everyone was talking about him like he’s walking on water and has a zillion dollars. And that was not my impression – that dude is just, there’s something wrong, and he does not have capital and he will not come through. That was my prediction.
Later on, Musk also reiterated the importance of keeping funds on cold storage. He also said:
I think there probably is a future for Bitcoin, Ethereum, and DOGE. I can’t really speak to the others. But if you’ve got one of those three in a cold wallet and off an exchange, I think my guess is it works out well.
With consumer confidence shaken, CZ believes that the event will serve as a “wake-up call” in the long term to learn how to deal with risks that come with the nascent industry.
FTX has lost several potential rescuers after shady details of the internal workings continue to emerge. The biggest setback was Binance pulling out of the deal.
But according to the crypto giant’s CEO, the deal with FTX did not make sense.
While speaking at the Indonesia Fintech Summit, Changpeng “CZ” Zhao weighed on the takeover that never materialized and the reason behind it.
“From a financial perspective, there is a big hole. From new users, we have very high overlaps. We cover all the regions they cover and they have much less users than us. From a technology or product perspective, I think we have a superior product. They don’t have anything we don’t have.”
According to CZ, the original intention was to “protect” the users. However, the reports of misappropriating user funds as well as probes from US regulatory agencies prompted Binance to call off the takeover.
The exec also said that there will be shift in regulatory perspective.
Earlier, watchdogs were more concerned about KYC/AML compliances. But with FTX going down, the focus will be on exchange operations, business models, and proof-of-reserves.
Bankman-Fried had reportedly approached stablecoin issuer Tether, crypto exchange and Kraken OKX as well as venture capital firm Sequoia Capital for $1 billion or more from each of the platforms.
Tether CTO Paolo Ardoino confirmed that having no plans to invest or lend money to FTX or its sister trading company, Alameda, which is at the center of the debacle.
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