Some are calling for the ex-CEO to be jailed.
• This is the second apology thread the executive has published on Twitter this week, following the news that FTX was in need of over $4 billion to cover its debts.
• In Thursday’s 22-part apology thread, Bankman-Fried wrote some text in all-caps and tried to justify his actions and explain his behavior.
• The trouble began for FTX last week after Coindesk reported that a substantial portion of assets belonging to Alameda Research, another company owned and founded by Bankman-Fried, were in FTT—a token issued by FTX.
• That sell-off crashed the price of FTT, and the loss in confidence in FTX caused a “bank run” on the exchange. And now, following its Chapter 11 filing, FTX is officially out of business.
Sam files Chapter 11
Sam Bankman-Fried, the CEO of crypto exchange FTX, took to Twitter Friday morning to apologize for the company’s recent bankruptcy filing. In a five-part apology thread, Bankman-Fried confirmed that FTX and its affiliated companies had filed for Chapter 11 bankruptcy protection. This is the second apology thread the executive has published this week, following the news that FTX was in need of over $4 billion to cover its debts.
There are some that took to twitter to state that they feel the CEO should go to jail for his fraudulent actions and lies that he held onto. The FTT token that was created by Sam’s company Alameda Research was used to build a a house of cards that was quickly tumbled over by Binance’s Changpeng Zhao.
“Well played; you won,” Bankman-Fried wrote in his thread which was a possible reference to Binance CEO Changpeng “CZ” Zhao.
More Lunacy?
A lot of members of the crypto community have begun to associate the situation with FTX to that of the situation with Do Kwon and Luna. Do Kwon was the co-founder of Terra and Luna was a DeFi protocol built on top of the Stellar network. After an investigation by The Block, it was revealed that Do Kwon had been using Tether (USDT) to inflate the price of Luna. Do Kwon and Terra have since then been sued for their actions.
The community has also taken to Twitter to criticize CZ for his part in the situation. It is worth noting that FTX was one of Binance’s closest allies and was integrated into the Binance ecosystem. The exchange even used Binance’s liquidity to offer traders leverage on their positions.
Some are even going as far as to say that CZ was in on the scam and helped Bankman-Fried to pull it off.
It is still unclear what will happen to FTX and its employees. The situation is still unfolding and more details are sure to emerge in the coming days and weeks. For now, it seems that FTX is out of business and Sam Bankman-Fried is facing some serious backlash from the crypto community.
Sam has stated that he has some dirt he wants to share on a rival , hinting at CZ that will come out soon but that remains to be seen.
Either way there is a bit of fraudulent activity going on.
In Thursday’s 22-part apology thread, Bankman-Fried wrote some text in all-caps and tried to justify his actions and explain his behavior. The trouble began for FTX last week after Coindesk reported that a substantial portion of assets belonging to Alameda Research, another company owned and founded by Bankman-Fried, were in FTT—a token issued by FTX. That sell-off crashed the price of FTT, and the loss in confidence in FTX caused a “bank run” on the exchange. And now, following its Chapter 11 filing, FTX is officially out of business.
The Initial Announcement
On Thursday morning, Sam Bankman-Fried took to Twitter to announce that FTX had filed for bankruptcy. In a series of tweets, he explained that the decision was made in order to protect user funds and minimize customer losses. He also announced that all trading on the exchange would be suspended immediately and that user withdrawals would be processed as soon as possible.
Justification
In an attempt to justify his actions, Bankman-Fried wrote a lengthy thread explaining his thought process leading up to the decision to file for bankruptcy. He insisted that he had been trying to protect user funds and minimize customer losses, but that ultimately he had made a series of bad decisions that led to the current situation. He concluded by saying that he was “truly sorry” for what had happened and that he would do whatever it takes to make things right.
The Aftermath
Following the announcement of FTX’s bankruptcy filing, there was a lot of speculation about what would happen next. Many users expressed frustration and anger at being left high and dry by an exchange they had trusted with their money. Other users rallied around Bankman-Fried, insisting that he had made the best decision possible under difficult circumstances. Meanwhile, industry experts began speculating about who would be liable for customer losses and whether or not FTX would be able to make a comeback from this devastating blow.
The situation with the FTT token Mimicks that of LUNA almost and it seems as if the playbook is the same for most of the crypto giants. It’s with this thought that many think that Sam Bankman-Fried should face some jail time for the situation as they believe this was one big giant con.
It remains to be seen what the long-term fallout from Sam Bankman-Fried’s actions will be. There may be some charges coming out as FTX is also being investigated by the Texas Securities Board, the DOJ, the SEC, the CFTC, and California’s Department of Financial Protection and Innovation. For now, FTX is out of business and customers are left wondering if they will ever get their money back. Only time will tell how this situation plays out, but one thing is certain: it’s been a wild ride
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