What did Sam Bankman Fried do?
The FTX founder is currently on trial. All over the internet, it's written that he "embezzled" billions of dollars in customer funds. But I can't imagine what that means. Did he simply spend the investors' money? Did he lose control of his company and then try to salvage something with the funds? How does a billionaire get into such a situation? He probably had enough money for life before he "cheated"? That just doesn't make sense to me.
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You can find various videos on YouTube about this, here is just one:
https://www.youtube.com/watch?v=b1YC7dgIxQE
In short: he and his ex are fraudsters who embezzled or burned investors' money.
I think this is a false facade that had to fall at some point. The initial success wasn't enough, or people wanted and needed more, and it escalated.
I think this has to be viewed in perspective. He certainly earned enough compared to the average income. But he also likely had higher costs/risks, and this certainly involved a certain change in his living conditions. Obviously, it wasn't enough, and I think he would have been smart enough to stop if he could have. But of course, it could also have simply been an addiction to recognition and success. As I said, there are dozens of videos on YouTube about it.
What matters most to me is that he cheated others and clearly created nothing of value, and that he failed and was condemned for it is only fair. One could even say that he's a negative example of trayding.
The rough description looks like this:
Before he built FTX, he had set up a business called Alameda Research. He was already frustrated with the lack of capital there. Then he built the FTX marketplace and turned it into a major player, which led to a lot of capital flowing into FTX. Over the years, he transferred the money from FTX to Alameda Research and, as I understand it, also invested there. So, perhaps not only lining his own pockets, but nevertheless, over the years, he increasingly withdrew more money from FTX and burned it at Alameda than FTX received in investments.
When inconsistencies first appeared in the balance sheets, people wanted to withdraw their cash from FTX, but FTX couldn't pay them because they had no money, as the banker Fields had lost the money at Alameda. So the investors lost about $13 billion.
Information is much more detailed here, but behind a registration barrier: Sam Bankman-Fried's downfall is complete (economist.com)
Thanks! So the whole drama is based only on the second company. What a shame, really.