World’s Most Generous Billionaire Went Bankrupt


Photo via Twitter

Changpeng Zhao (on the left) and Sam Bankman-Fried (on the right)

J.Zheng, Staff Writer

Sam Bankman-Fried (SBF), also known as the world’s most generous billionaire is the CEO of the world’s 2nd largest crypto currency FTX. The first is Binance and is owned by Changpeng Zhao (CZ). SBF also founded another company called Alameda and Caroline Ellison is the current CEO. 

On November 2, 2022 Alameda balance sheet was leaked. Alameda had $14.6 billion worth of digital assets and a lot of it was from FTX. According to CoinDeck “This is comprised of $5.8 billion FTT token, $1.2 billion Solana token (SOL)…”. FFT tokens digital assets that are similar to bitcoin or dogecoin that are issued by FTX. They are worth about $25 a token as of November 2.

On November 6, 2022 CZ came out with a tweet saying he is going to sell (liquidate) all the FTT tokens he has which were worth around a couple hundred million dollars. 

On the same day, Caroline the CEO of Alamina came out with a tweet offering to buy all the FTT tokens from CZ at a good price to minimize the impact of selling all his tokens.

On November 7, 2022 CZ denied the offer to sell it directly to Alamina and decided to stay in the free market which caused mass panic among people who also decided to sell their FTT tokens. With a lot of people selling their FTT tokens it caused FTT tokens to crash in value.

On November 8th, 2022 A article came out saying FTX stopped processing withdrawals.

On the same day, CZ came out with a tweet saying they plan on buying FTX to help with the liquidity crunch. Due to everyone selling their FTT token FTX did not have enough money to give back but did have the assets to sell but couldn’t sell it right away to pay back their clients. To help payback the money CZ will buy FTX and payback their clients.

On November 9, 2022 Binance came out with a tweet saying they decided to not continue with the plan of buying FTX due to mishandled customer funds. 

Mishandled Customer Funds

According to Wall Street Journal SBF was using client funds and lending it to Alameda. “Sam Bankman-Fried said in investor meetings this week that Alameda owes FTX about $10 billion… FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes”. However in FTX Terms of Service they claimed they wouldn’t. “You control the Digital Assets held in your Account… FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX trading.

How Did Alameda Lose $10 Billion

SBF said to him “Alameda owes FTX about $10 billion” but where did this money go? There are many different reasons and not all of it is confirmed but one theory is FTX was lending Alameda money to make FTT tokens more valuable. Another theory was advertisement. They spent $200 million to add their name to e-sports org TSM, they also acquired a stadium also known as the Miami Heat Stadium in Miami Florida . 

On November 11, 2022 SBF declared Bankruptcy for all his companies FTX, FTX US, and Alameda

That same day FTX and FTX US got hacked and lost over $600 million.

Terminated Contracts

Both the Miami Heat stadium and their TSM terminated their contracts with FTX.

As of November 16, 2022 It’s unknown who the hacker is,  the people who bought FTT tokens probably won’t get their money back and it is unknown what Sam BankMan-Fried is up to.