In recent days, the CEO of the cryptocurrency company FTX, Sam Bankman Fried, has turned from an entrepreneur into a mere fraud; This happened after his company declared bankruptcy and lost most of his wealth, and he became the target of investigations by the Securities and Exchange Commission and the Department of Justice.
The empire built by the 30-year-old Mr. Bankman Fried, who was once compared to finance giants such as John Pierpont Morgan and Warren Buffett as a crypto genius, has collapsed. His company collapsed last week as investors flocked to their deposits in the cryptocurrency market.
With an $8 billion deficit forcing the company to file for bankruptcy, it destabilized other crypto companies and sowed widespread distrust in the technology.
According to Reuters, at least $1 billion in customer funds have disappeared from FTX, one of the largest cryptocurrency exchanges, amid investigations by the Department of Justice and the Securities and Exchange Commission.
Some information revealed that FTX may owe money to over a million people and organizations.
The company owner did not provide any details about whether FTX improperly used billions of dollars of customer funds, or were defrauded andDispose of depositors’ funds and not purchase any assets.
For investors, FTX was a gateway to the world of crypto, an exciting market where celebrity ambassadors like quarterback Tom Brady invited them to open accounts and trade digital currencies like bitcoin and ether.
FTX, in turn, operates in many ways like banks and traditional finance brokers, maintaining client accounts, exchanging currencies, and making loans and investments with clients' assets.
FTX operates outside the traditional banking system which creates enormous risks. Although they act like banks and brokers, cryptocurrency exchanges are not typically subject to the same kind of regulation, insurance and information disclosure that protect traditional bank customers.
Mr. Bankman-Fried, who is based in the Bahamas, declined to comment on his current location, citing safety concerns.
