[ad_1]
When cryptocurrency exchange FTX raised $400 million from investors including Softbank, Temasek, Tiger Global and others in January 2022, his net worth took off.
The funding, amazingly, quickly increased its value to $32 billion. In November, it was bankrupt.
As FTX cemented its reputation with big-name investors, it also allied itself with high-profile celebrities, including NFL great Tom Brady, his then-wife, model Gisele Bündchen, the superstars of NBA Stephen Curry and Shaquille O’Neal, tennis player Naomi Osaka. , and Hollywood’s Larry David.
FTX CEO Sam Bankman-Fried was the institutional face of the cryptocurrency industry. He amassed a net worth of over $21 billion, but lost most of it within days starting November 8.
The company was a mechanism used by people to buy and sell cryptocurrencies such as bitcoin and ether. But trust in FTX was destroyed as its customers rushed to withdraw their money by selling the cryptocurrencies they had previously purchased through the platform.
And the rest is history. Bankman-Fried now faces criminal and civil charges on fraud charges.
The celebrities who backed his cryptocurrency empire are now facing blinding and embarrassing consequences.
Tom Brady has lost an impressive number of shares
One of FTX’s most prominent promoters was NFL star Tom Brady. Needless to say, his remarkable investment went horribly wrong.
An eerily prophetic video was captured in a Twitter post, where Brady asks Bankman-Fried, “Sam, where are you going bro?” The post was shared by @MilkRoadDaily.
The Tampa Bay Buccaneers quarterback reportedly owns over a million shares, and the value of that could now be zero.
Why did the bank run on FTX?
On November 2, Coindesk published an article that raised concerns about the financial health of FTX and Alameda Research. The article claimed that Bankman-Fried’s Alameda Research assets consist of FTT (~FTTUSD), the cryptocurrency issued by FTX.
The revelation that FTX was using FTT, the once-beloved cryptocurrency, as collateral on its balance sheet raised serious concerns due to the concentration risk and volatility of FTT. Customers and investors have become skeptical of the capital reserves of Bankman-Fried’s Alameda and FTX trading company.
On November 6, Binance announced that it would sell approximately $530 million worth of FTT, sparking the bank run.
On November 8, Binance officially declared that it was acquiring FTX as cryptocurrency values such as bitcoin fell. Shares of crypto companies, including Robinhood (HOOD) – Get Free Report and Coinbase (COIN) – Get Free Report, fell in value.
The very next day, Binance announced that it was withdrawing its acquisition offer. The situation was worse than first thought.
On November 11, FTX filed for bankruptcy and Bankman-Fried resigned as CEO.
Soon it was announced that FTX was under federal investigation by New York prosecutors for giving funds to clients at Alameda Research.
And a civil action followed.
“Bankman-Fried orchestrated a massive, years-long fraud, embezzling billions of dollars of trading platform client funds for his own personal benefit and to help grow his crypto empire,” the Securities and Exchange Commission alleged in a statement. his civil complaint.
|
Sources 2/ https://news.google.com/__i/rss/rd/articles/CBMiZWh0dHBzOi8vd3d3LnRoZXN0cmVldC5jb20vaW52ZXN0aW5nL2NyeXB0b2N1cnJlbmN5L3RvbS1icmFkeS13aW5zLWF0LWZvb3RiYWxsLWJ1dC1sb3Nlcy1iaWctYXQtY3J5cHRv0gFqaHR0cHM6Ly93d3cudGhlc3RyZWV0LmNvbS8uYW1wL2ludmVzdGluZy9jcnlwdG9jdXJyZW5jeS90b20tYnJhZHktd2lucy1hdC1mb290YmFsbC1idXQtbG9zZXMtYmlnLWF0LWNyeXB0bw?oc=5 The mention sources can contact us to remove/changing this article |
[ad_2]