Consumer Neuroscience Expert “JetSet” and Crypto Bro “Joey Sendz” on FTX: “There were obvious red flags.” “Nothing Sam Bankman-Fried said ever aligned with his actions.”

The Founders of NFTMagazine.com, Josh King (“JetSet”) Madrid and Joey Sendz, Break Down What The F@*k Is Going On With FTX for Those Who Know Nothing About Crypto.

• Sam Bankman-Fried, the former CEO of FTX, lost 96% of his fortune after his empire collapsed, say Josh King Madrid and Joey Sendz, who are the co-founders of NFT Magazine.
• An estimated $2 billion of FTX clients’ money has gone missing, according to Reuters.
• SBF is the second-largest donor to the Democratic Party in the United States. Could this have anything to do with FTX’s meteoric rise?

Sam Bankman-Fried is the name on everyone’s lips.

The founder of the cryptocurrency exchange FTX, a 30-year-old billionaire who drives a Toyota Corolla, lost 96% of his wealth when his company collapsed in the biggest one-day drop the cryptocurrency world has ever seen.

Earlier this year, Sam Bankman-Fried, or SBF, as he’s also known, promised to give away his $20 billion fortune. In June of this year, he signed the Giving Pledge, a vow made by the world’s richest people to donate their fortunes to charitable causes. With FTX plummeting and SBF’s fortune going down with the ship, these promises will never see the light of day.

So, what happened to FTX? And could it have been avoided?

FTX practically imploded after reports that Sam Bankman-Fried had been secretly funneling $10 billion of his customers’ money to another company run by his girlfriend, Caroline Ellison. As if that wasn’t enough, an estimated $2 billion of FTX clients’ money has gone missing, and to put the miserable icing on the disastrous cake, FTX officials reported another $473 million stolen in a hack on Friday night.

This was “an entirely avoidable tragedy,” according to Crypto VC’s David Parkman. Parkman is part of the crypto company CoinFund; he was one of the early investors in FTX and could do nothing but watch as it all went down in flames.

“I think it’s absolutely terrible on a bunch of levels.” This failure of the company was brought on by a bunch of flawed human decision-making, not by a failing business. It wrote a lot of really good software. It’s not like it was running out of capital or a victim of the macro environment; however, its leadership, apparently with little oversight, made a slew of bad decisions and did things horribly wrong.

But there is more to this story than just terrible management and a company without proper leadership. Rumors and speculation have been surrounding SBF since the very beginnings of his ventures into crypto. SBF was a big donor to the Democratic Party in the United States and was one of the largest donors to Joe Biden’s presidential campaign in 2020. Some speculate that his close ties to highly influential politicians were one of the reasons for FTX’s meteoric rise to success. but the list goes on and on. We hear reports of blindsided employees, executives jumping ship, sketchy loans with high-risk collateral, and delayed withdrawals, everything pointing to the fact that the company could have been headed for trouble for a long time.

The Endgame

During the months leading up to the FTX disaster, Sam Bankman-Fried lived in a $40 million-plus penthouse in the Bahamas, which he is now selling, with several colleagues and his alleged girlfriend, Alameda executive Caroline Ellison. Large FTX shareholders were kept in the dark as to how bad the situation really was, and many only found out as late as last Tuesday. SBF spent the last days of his empire desperately trying to raise money in the Middle East, meeting with Saudi Arabia’s sovereign wealth fund, but nothing could save the once-thriving company from the errors of its own ways.

In just a few years, Sam Bankman-Fried built an empire that would shake the foundations of crypto trading and make him one of the wealthiest people in the world. And all it took was a few hours for everything to come crumbling down. There were many red flags along the way, but nobody seemed to realize the gravity of the situation before it was too late. The story of FTX and Sam Bankman-Fried will serve as a reminder that not everything that glitters is gold, or at least not real gold.