Maybe you’re not a "crypto girl." Perhaps you’re ill-informed about FTX and its CEO, Samuel Bankman-Fried. Well, you’re not alone – even traders who have been in the cryptocurrency space for years are just as confused as you are. There’s more to the (previous) $32 billion-dollar exchange than meets the eye… far more than anyone would have ever imagined. The media won’t tell you about it – but we will.
By now, you’ve probably seen countless bombshell headlines on FTX and Sam Bankman-Fried. So, let’s cut to the chase – here’s everything (including all of the weirdness surrounding it) you need to know about the popular exchange that got eviscerated in just one week.
What Is FTX, Alameda Research, and Who Is Sam Bankman-Fried?
FTX was founded in 2019 by MIT grad Samuel Bankman-Fried (SBF), which is a cryptocurrency exchange based in the Bahamas. Alameda Research (created in 2017) is FTX's sister company, a quantitative trading firm whose CEO is none other than “Harry Potter-loving” Caroline Ellison – we will go back to her later.
Changpeng Zhao, the CEO of Binance, was one of the early investors of the platform, purchasing a 20% stake in FTX just over a year after it was created. In 2021, FTX managed to raise $900 million from over 60 investors, including Sequoia Capital and Softbank. The FTX empire grew to $32 billion in the span of just three years. It got so massive that even celebrities were getting involved – Tom Brady, Stephen Curry, and Shaquille O'Neal all had exclusive deals with FTX. (There are even rumors going around that the reason for Brady and Bundchen's divorce is due to the exchange going bankrupt!) So what went wrong?
What is FTT?
Let me introduce you to FTT real quick! To put it simply, it's FTX's native exchange token. Its primary use is being a payment source for the trading fees on the platform. Last year, Zhao (of Binance) sold his stake in FTX back to Bankman-Fried, who paid a portion of it with FTT. Then, earlier this month, CoinDesk made a report on a leaked document that allegedly showed Alameda Research holding a large amount of FTT tokens.
However, FTX and Alameda are two separate entities – this called into question FTX's actual liquidity. Days later, Binance announced that they would sell their FTT tokens after "recent revelations." You can probably suspect what happened next – FTT's price quickly plummeted as traders began to withdraw from the exchange. About $6 billion worth of withdrawal requests (which, people never got by the way… because they apparently had no assets) occurred on November 6, forcing Bankman-Fried to find an emergency investment.
On November 8, Zhao tweeted about FTX asking for their help. According to his tweet, Binance would buy FTX, but they would also have the "discretion to pull out from the deal at any time."
Bankman-Fried went on Twitter after Zhao’s announcement and added that because of Binance's involvement, "customers are protected."
On November 9, much to investors’ dismay, Binance tweeted that they would no longer pursue the "acquisition of FTX."
The day after the deal fell through, SBF took to Twitter to apologize for his mistakes. "I f*cked up twice," he admitted. Of course, an apology in a series of tweets means absolutely nothing to the millions of people who have lost their money. It doesn't help the fact that The Wall Street Journal made a report that FTX loaned $10 billion dollars of customer funds to Alameda Research for gambling purposes. The fall of FTX – which, over the years, has grown to be trusted by many – fell quickly, which affected Bitcoin and Ethereum.
I f*cked up twice.
We won't get too much into this, but hours after FTX declared bankruptcy, a hack occurred and $338 million dollars in tokens were taken out of the company's wallets (hmm, inside job?).
Okay, now that you’re all caught up, here’s where things get even more ridiculous. After the whole FTX fiasco, @GRDecter, @reallygraceful, and other users started to dig up some things (that, honestly, should have raised red flags from the beginning) on FTX and Bankman-Fried.
Here’s What Mainstream Media Won’t Tell You About SBF
In a video by @reallygraceful, she covers what mainstream media dares not to cover – Bankman-Fried's family members and friends who seem to have connections in the political and pharmaceutical space. Here's a summary: Bankman-Fried found FTX two weeks after Biden announced he was running for office in 2019. SBF's mom is a Stanford professor who co-founded Mind the Gap, a Silicon Valley-based Democratic fundraising organization.
SBF's brother, Gabe, is the founder and director of Guarding Against Pandemics (by the way, his page is gone on the website now), an organization whose mission is to – you guessed it – "prevent pandemics" by advocating for investments. He was also a legislative correspondent for the U.S. House of Representatives.
Remember when I told you about Sequoia Capital? They invested $213 million dollars in FTX, and then SBF invested $500 million back into the hedge fund. SBF also purchased a 30% stake in Anthony Scaramucci's (a former White House Director of Communications) Skybridge Capital.
Once Biden was in office, he appointed Gary Gensler as the Campaign Finance Chair for Hillary Clinton. Interestingly, he taught lectures at MIT (where SBF graduated from) and serves as the current chairman of the Security and Exchange Commission. Gensler's old boss is Glenn Ellison, a professor at MIT. Ellison's daughter, Caroline, was the president of Alameda Research. However, Caroline didn’t attend MIT – she graduated from Stanford, where both SBF’s parents work. Can you guess what Caroline’s advice is for college students? She actually says that classes don't matter that much, and that "friends and networking are really important."
Lastly, FTX's Head of Ventures is Amy Wu, and she worked for the Clinton Foundation. There are probably more connections that we can make. But, for now, let's stick to the messy web that we have. We have to talk about FTX's involvement with Ukraine and the Democratic party.
FTX Allegedly Laundered Money for the Democratic Party (Thanks To Ukraine)
According to CoinDesk, Ukraine launched a partnership with FTX in March. FTX was converting donations into fiat to assist in the "war efforts of Ukraine." This process generated FTX tons of money. Then, SBF proceeds to donate millions of dollars to the Democrats.
"It's pretty suspicious that the downfall of FTX happened right after midterms," adds Grace. "To summarize, make sure we have this right, you, the taxpayer, give your hard-earned money to the American government. Then, the American government turned around and gives it to Ukraine, and Ukraine runs your donations through FTX. And then, the FTX founder takes your money and gives it to the Democrats," Grace explains. She also believes that SBF was most likely set to fail so that people would demand stricter regulations on crypto.
Ukraine runs your donations through FTX.
A series of tweets have come out to support Grace's suspicions. “So Biden gave loads of money to Ukraine, who gave loads of money to FTX, who gave loads of money to Democrats,” writes @SethDillon. “Sounds like a potentially massive scandal the media will have absolutely no interest in covering.”
FTX Donated Almost $40 Million to Democrats
Interesting how SBF has become one of Biden's biggest donors, becoming the second largest donor to the democrats, just after George Soros. So how much did he give them? SBF spent $40 million on campaigns this election cycle, making him the sixth-largest single donor in the United States. The vast majority of the money went into supporting Democrats, according to OpenSecrets. Apparently, he donated $36,793,596 to Democrats, and $235,200 to Republicans.
So, there you have it. SBF has connections with some of the most prolific individuals, possibly allowing him to launder money in places people wouldn't have thought to look. Unfortunately, there were other glaring warning signs from FTX and SBF that others missed. Let's go over them!
The Other Red Flags That People Somehow Missed
FTX Didn’t Even Have a Board of Directors
You would think that a billion-dollar company would have elected individuals to represent their shareholders. That wasn't the case when it came to FTX. "No investors joined FTX's board of directors, which was made up of Mr. Bankman-fried, an FTX employee and a lawyer," the NY Times writes.
FTX Was a World Economic Forum Partner
Guess what? The World Economic Forum's website used to have a page on FTX under their "Partners" tab. The WEF has since deleted the page, but the internet is forever, and people were quick to take screenshots.
FTX's Chief Lobbyist Deleted His Twitter Account
I probably should have mentioned this beforehand, but FTX actually had a Chief Lobbyist named Mark Wetjen, who was actually nominated by former President Barack Obama to serve a five-year term as a Commodity Futures Trading Commission (CFTC) Commissioner. No wonder people put so much faith in FTX!
People Think Alameda Research’s Logo Looks Like a Symbol Used By Pedophiles
Users believe that Alameda Research's symbol and the logo on SBF's shirt look awfully familiar. But remember when the founder of MakerDAO (another cryptocurrency lending platform) Nikolai Mushegian tweeted about how the CIA, Mossad, and a pedophile ring were running a sex trafficking entrapment in some islands? And how he was found dead a day later at the beach? Yeah, I’m sure that was nothing.
FTX Was Allegedly Run By "a Gang of Kids in the Bahamas" Who Were All In a Polyamorous Relationship
One close source stated that the whole operation was "run by a gang of kids in the Bahamas." Many of SBF's former colleagues and friends from college shared a luxury penthouse with him. CoinDesk states that members of his group were all dating each other. On Caroline Ellison's Tumblr, she actually talked about exploring polyamory.
FTX Worked With A "Metaverse Nightclub-Loving" Audit Firm
The audit firm, Prager Metis, operates Decentraland, where they sponsored "Decentraland Babydolls" (DCL Babydolls for short). Totally normal.
What’s next for FTX? John Jay Ray III has stepped up, Enron’s former bankruptcy lawyer. In FTX’s recent bankruptcy statement, they said that beginning “an orderly process to review and monetize assets for the benefit of all global shareholders” is one of their plans. However, there are no estimated timelines for this event.
Now, whether or not this whole thing was planned is, of course, up for debate. One thing stands for certain: A total of $1 billion dollars (possibly $2 billion) of FTX’s customer funds are now gone, leaving millions of Americans to struggle and fend for themselves. That is, until, the government “steps up” to offer a new “solution.”
Don’t miss anything! Sign up for our weekly newsletter and get curated content weekly!