Jordan Belfort, ‘The Wolf of Wall Street,’ joined Maria Bartiromo’s Wall Street to discuss the fallout of FTX’s collapse and the scrutiny facing A-list celebrities as well as the SEC chair.
Sam Bankman-Fried, former CEO of FTX, was among the most successful people in crypto before his empire fell apart. The $32 billion loss of trading platform FTX is the biggest-ever failure of a cryptocurrency Exchange.
Customers and investors were left scrambling after the once-dominant virtual currency player was taken out of business by Bankman-Fried and his firm . They filed Chapter 11 bankruptcy protection Nov. 11th and 14.
Bankman-Fried and Zixiao “Gary” Wang co-founded FTX in May 2019. FTX was founded within Alameda Research in May 2019 by Bankman-Fried, Zixiao “Gary” Wang and other crypto traders.
Education and Early Life
The son of two Stanford Law School professors, the 30-year-old was born in April. Joseph Bankman, his father, is a prominent scholar in tax law. Barbara Fried, his mother, has published extensively on distributive justice issues in the areas tax policy, property theory, and political theory.
Bankman-Fried was born in Hillsborough, California. He attended Canada/USA Mathcamp as a high school student. It is a summer program for mathly gifted students.
Sam Bankman-Fried is the founder and chief executive of FTX Cryptocurrency Derivatives Exchange. He was interviewed on Bloomberg Wealth with David Rubenstein in New York on August 17, 2022. (Jeenah Moon/Bloomberg via Getty Images/Getty Images
Bankman-Fried continued his education at the Massachusetts Institute of Technology, graduating with a degree and minor in mathematics. He interned at Jane Street Capital in New York, a proprietary trading company. After graduating at MIT, he was hired as a full-time employee by Jane Street Capital, where he worked three years before launching Alameda Research.
Bankman-Fried started a career as a crypto trader in 2017, and founded Alameda Research with Tara Mac Aulay.
Last week Mac Aulay tweeted, “In April 2018, we all quit, in part because of concerns over risk management, and business ethics.”
The business model of the firm was to trade crypto on global markets.
According to New York Magazine, Bankman-Fried and Alameda friends moved up to $25 million each day in bitcoin.
Two years after he founded Alameda he moved to Hong Kong where he started FTX.
Illustration photo showing a smartphone screen displaying FTX’s logo and a background screen showing the FTX website. This was taken in Arlington, Virginia, on February 10, 2022. (Photo by Olivier Doulier/AFP via Getty Images / Getty Images
Building a Cryptocurrency Empire
In less than three years, Bankman-Fried transformed FTX into a company worth more than $40Billion. By providing financial support to struggling crypto companies like BlockFi, he was seen as the crypto’s lender last resort.
In 2021, the crypto exchange relocated its headquarters to Bahamas to give investors more freedom and less regulation than in the U.S.
A large marketing campaign by the company brought in celebrity such as quarterback Tom Brady, Stephen Curry, and Larry David to promote the brand. It also acquired the rights to name the arena, which is home to professional basketball’s Miami Heat.
The Wall Street Journal reported that Silicon Valley poured money into FTX. Investors pumped in more than $1.8 billion over three years with no strings attached.
Steve Moore, a former Trump economic advisor, discusses FTX’s demise and how the cryptocurrency titan was involved in politics on The Evening Edit.
Bankman-Fried stated to the Financial Times, July 2021 that “If we’re the largest exchange, [buying Goldman Sachs or CME] is not impossible at all.”
His ambitions grew into politics. Ironically, he tried to strengthen crypto regulations at Congress, where he testified, and frequently met with regulators.
Bankman-Fried’s fortune peaked at $26.5 billion in March. However, it plummeted to $16 billion in just one week in November according to Bloomberg’s Billionaires Index.
Bloomberg reports that he lost 94% of his wealth within a single day. This was the largest wealth collapse in history. The CEO of Bankman-Fried was fired days later and FTX filed for Chapter 11 bankruptcy.
He donated $40 million to , mostly Democratic causes during the midterm elections. He was second in the list of billionaires who donated to Democrats after George Soros.
Reuters contributed this report.