“Crypto King” AKA Billionaire Scammer

Chances to become a crypto or bitcoin millionaire are less than 1%.

Demand and desire are not in shortage when we see how many of us want to become millionaires, and it looks like the easiest way in the shortest period of time to become one is to invest in bitcoin or cryptocurrency.

Techopedia reports that 580 million people worldwide are investing in cryptocurrencies and bitcoins, with an encouraging percentage of these investors becoming millionaires. The remarkable figure of 88.200 millionaires represents less than 1% of the total number of investors.

To illustrate why investing in cryptocurrency or bitcoin won't make you a millionaire, consider the reality that most people overlook: there are individuals who are adept at exploiting your money through Ponzi schemes.

This can happen when you invest in cryptocurrency or bitcoin, only to discover later that another successful businessperson has been arrested on a yacht, private jet, or is in hiding.

This narrative centres on Whiz Kid Sam Bankman-Fried, whose fraudulent activities, Ponzi schemes, and scams bear a striking resemblance to those of Ruja Ignatova, who embezzled 4.5 billion through her OneCoin cryptocurrency and bitcoin company.

About FTX

In late March 2024, a court found Sam Bankman-Fried, the creator of the cryptocurrency exchange FTX, guilty of one of the largest financial scams in US history and sentenced him.

Former cryptocurrency sensation Bankman-Fried, who was well-known for his untidy curly hair and preference for shorts and T-shirts over business attire, has joined the ranks of "reputable" celebrities and fraudsters, including Jordan Belfort, the "Wolf of Wall Street," and Bernie Madoff, who was convicted of serious financial crimes in the US.

After his company, FTX, failed in November 2022, preventing consumers from accessing their funds, Sam Bankman-Fried, the disgraced cryptocurrency entrepreneur, received a 25-year prison sentence for embezzling billions of dollars from his clients.

But first, let's go in order.

Sam Bankman-Fried: Who is he?

On March 5, 1992, Samuel Benjamin Bankman-Fried was born in Stanford, California. He goes as SBF. His parents are Stanford Law School professors. In 2014, he earned a bachelor's degree in physics with a minor in mathematics from the Massachusetts Institute of Technology.

In 2013, Bankman-Fried interned at a private trading company that dealt in foreign exchange-traded funds.

Following his graduation from MIT, he went back to his full-time job.

Bankman-Fried left this position in September 2017 and relocated to Berkeley, California, where he served as Director of Development for the Centre for Effective Altruism (CEA) from October to November of the same year.

Businessman Luke Ding and millionaire computer programmer Jaan Talin provided funding for Tara Hedley and Bankman-Fried to form Alameda Research, a quantitative trading company, in November 2017.

By 2021, Bankman-Fried owned ninety percent of Alameda Research. In January 2018, Bankman-Fried set up an arbitrage trade to profit from the higher price of bitcoin in Japan compared to other countries, moving up to $25 million a day.

In late 2018, after going to a cryptocurrency conference in Macau, he relocated to Hong Kong.

Bankman-Fried and every senior employee of FTKS moved to the Bahamas in September 2021 from Hong Kong.

Bankman-Fried and other business leaders gave testimony before the Financial Services Committee on December 8, 2021, regarding cryptocurrency sector regulation.

In May 2022, news broke that Bankman-owned Emergent Fidelity Technologies Ltd. had acquired a 7.6 percent stake in Robinhood Markets.

According to a September 2022 story, Bankman-Fried's advisors made a financial offer to support Elon Musk's acquisition of Twitter.

Investment banker Michael Grimes stated in correspondence that Bankman-Fried would be willing to contribute up to $5 billion on April 25, 2022, according to documents made public as part of a litigation between Twitter and Musk during the Twitter acquisition.

Nevertheless, when Musk finished the transaction, there was no investment.

In addition to investing more than $500 million in venture capital firms, such as $200 million in Sequoia Capital, which is also an investor in FTKS, Bankman-Fried spent $500 million in Anthropic.

A "flawed and at times dystopian" initiative, according to reports that surfaced in July 2023, involved Bankman-Fried "buying" the island country of Nauru to serve as a bunker in the event of a cataclysmic disaster.

Bankman-Fried, known as the "crypto king," lives the life of a billionaire, with his business headquartered in the Bahamas.

Forbes ranked him second among the world's richest cryptobillionaires in February 2022.

His estimated wealth is 24 billion dollars, with FTX alone valued at around 32 billion. Through Alameda, FTX, and venture capital funds, he invests at least 500 million dollars in hundreds of other firms and initiatives.

He donates to both politicians and different humanitarian organisations, and everything appears to be perfect—that is, until the general public learns about the dubious origins of his cryptocurrency empire.

In addition, he regularly makes contributions to political parties and has given Joe Biden's 2020 presidential campaign about $5 million in support.

It's all a fraud.

FTX...CZ...WTF?

The investigation showed that Alameda Research bases its financial sheet on the FTT token, which the FTX exchange produces.

A portion of their holdings consist of salt pans and other tokens, but the connections to FTX are especially questionable and imply that the SBF empire as a whole is bloated and may even be bankrupt.

Changpeng Zhao (CZ), the CEO of Binance and owner of a sizable quantity of FTT tokens, becomes embroiled in the narrative shortly afterwards when he decides to swiftly sell off that token.

Not only has the sale begun, but panic and public mistrust of FTX are also increasing. Furthermore, the disclosure reveals that FTX invested a portion of the funds in their endeavours, a strong indication of a Ponzi scheme or other fraudulent operation.

Thus, the prophecy of insolvency becomes self-fulfilling: FTX clients start withdrawing their cash out of fear of losing them, which quickly led to this exchange becoming insolvent.

And that's only the beginning of the story: the whole market, their token, and their assets are all worthless.

After announcing that it would acquire FTX, Binance suddenly pulls out of the deal, citing the finding of suspicious transactions and client fraud. Even FTX stops running on a regular basis.

Some now blame Binance for deliberately undermining its rival, while others note that they were aware of FTX's operational issues. They allege that Bankman-Fried invested billions of dollars' worth of his clients' deposits in Alameda, and when those bets failed, he had nothing left to distribute to his clients.

Subsequently, Bankman-Fried resigned as CEO, and FTX and 130 affiliated companies declared official bankruptcy.

Authorities in the United States and the Bahamas are investigating him, and he allegedly attempted to escape to one of the nations from which he was not eligible for extradition.

Investors who bought cryptocurrency through FTX remain uncertain about the existence of their money, and whether they will ever see their investments in digital wallets within that firm.

Experts believe that one to two billion dollars have disappeared, and it's likely that the majority of the ten billion dollars secretly transferred to the Alameda business also vanished.

Clinton, Blair, and Katy Perry are next in line

He became something of an industry spokesperson for the whole cryptocurrency space, showing up side by side in shorts and baggy t-shirts with Bill Clinton, Tony Blair, Gisele Bundchen, and Katy Perry at the very moment the business was starting to take off.

The fact that Bankman-Fried appeared to shun the level of extravagance his wealth permitted added to his mystery. He drove an outdated Toyota Corolla; he didn't own a yacht.

"In a strange way, he seemed like a grown man in the crypto world."

Trial

Two different accounts developed during the course of the trial, which lasted four weeks, two different accounts developed. In one case, the previous mogul was an intelligent but foolish specialist whose oversights as CEO caused massive scams to occur right in front of him.

With the assistance of former members of his inner circle, Bankman-Fried quickly embezzled billions of dollars from clients, believing he would remain undetected.

Both accounts show how closely the reputation of FTX's creator, whose magnetic personality drew billionaire investors, former presidents, and famous people into his orbit, contributed to the company's success.

Throughout the Manhattan trial, Bankman-Fried's attorneys portrayed their client as a math nerd who was crushed by his expanding enterprise.

At the podium, now dressed in a suit and sporting short hair, Bankman-Fried assigned some of the blame to Ellison, who entered a guilty plea to fraud, for not following his directive to "protect" the shareholding and, thus, Alameda from a market slump.

The prosecution, on the other hand, painted Bankman-Fried as a person whose conceit and unbridled desire combined to cause him to defraud his business.

"He thought there was a 5% chance he would one day become President of the United States."

The phrase "the defendant gambled with clients' money" kept coming up.

Former members of Bankman-Fried's close circle, such as Ellison, the CEO of Alameda, and his childhood friend Nishad Singh, who was Bankman-Fried's younger brother's childhood pal, all contributed to his defeat in court.

They stated in court that Bankman-Fried led them into fraud and set up connections between Alameda and FTX so he could use FTX as his personal piggy bank, all the while vowing to safeguard client cash and clean up the cryptocurrency sector.

His rise was propelled by money.

Along with helping to pay off Alameda's enormous debts, he also made real estate investments, stock market investments worth billions, and political contributions totalling almost $100 million.

Ellison asserted that he staged his physical appearance, viewing his inexpensive automobile and dishevelled haircut as "good for his image," as they gave him a more genuine aspect than the average stockbroker. But Ellison contended that his modest demeanour concealed his tremendous ambition.

"He thought there was a 5% chance he would one day become President of the United States.".

Who knows? Maybe he will become one someday—power, money, and politics are all intertwined, right?