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FTX’s Sam Bankman-Fried cashed out $300M during funding spree

wsj.com

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Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#31

Post by sillysaurusx »

> Three months earlier, in July 2021, Mr. Bankman-Fried bought out the roughly 15% stake owned by Binance, FTX’s first outside investor. Binance CEO Changpeng Zhao tweeted this month that the amount totaled $2.1 billion, paid in a combination of FTT, FTX’s in-house cryptocurrency, and BUSD, Binance’s stablecoin, whose value is pegged to the U.S. dollar.

Hmm. Binance triggered FTX's downfall by dumping FTT, causing the domino effect.

Does this mean that Sam was the one who sold Binance the FTT which Binance subsequently used to cause FTT to collapse? I just assumed Binance bought a bunch of tokens themselves for some reason.

That's quite the turn of events!

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#32

Post by woeirua »

slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

It was fraud all the way down.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#33

Post by thr0wawayf00 »

slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

When the hype train is rolling and the valuation is skyrocketing, nobody asks questions.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#34

Post by wmf »

sillysaurusx wrote: post #31

> Three months earlier, in July 2021, Mr. Bankman-Fried bought out the roughly 15% stake owned by Binance, FTX’s first outside investor. Binance CEO Changpeng Zhao tweeted this month that the amount totaled $2.1 billion, paid in a combination of FTT, FTX’s in-house cryptocurrency, and BUSD, Binance’s stablecoin, whose value is pegged to the U.S. dollar. Hmm. Binance triggered FTX's downfall by dumping FTT, causing th…

Does this mean that Sam was the one who sold Binance the FTT which Binance subsequently used to cause FTT to collapse?

Yes exactly.

Binance triggered FTX's downfall by dumping FTT

I don't know if they actually dumped; they just announced it. It doesn't matter now.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#35

Post by [deleted] »

Schnitz wrote: post #11
leet_thow wrote: post #4

How common was it for founders to cash out on common shares in the Series C-E rounds the last decade?

Very. It's usually not this egregious though. Founders might want stable finances for their family or the ability to buy a reasonable home, but VCs want them to keep going, so VCs allow founders to cash out some of their equity so that founders don't go for an exit for the sake of their personal finances.

[deleted]

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#36

Post by colechristensen »

karmakurtisaani wrote: post #30
slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with wildly inappropriate things. More generally, we (as a society) seem to be worshiping those who make a fortune, and forget that they too are just as faulty as the rest of us. Initial innovative success gets projected to mythical proportions, and once the invest…

In other words, the investors were stupid and deserved what they got.

Customers were owed better, but large scale investors who don't do due diligence and end up losing their shirts deserve every bit of it.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#37

Post by belter »

anticrisis wrote: post #27
kjs3 wrote: post #24

Earlier quoted context omitted.

I thought that was the whole point: unregulated (or at least extremely minimally regulated, preferably in a jurisdiction that has a looooong history of looking the other way and in a perfect world with no extradition treaties), decentralized, anonymous financial systems. It doesn't surprise me in the least that these clowns were running across the high wire without a net using other peoples money. The fascinating par…

The whole circus is a mass delusion. I would really like to see some academic studies on the phenomenon.

I give you the studies:

“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”

― Friedrich Nietzsche

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#38

Post by sillysaurusx »

wmf wrote: post #34
sillysaurusx wrote: post #31

> Three months earlier, in July 2021, Mr. Bankman-Fried bought out the roughly 15% stake owned by Binance, FTX’s first outside investor. Binance CEO Changpeng Zhao tweeted this month that the amount totaled $2.1 billion, paid in a combination of FTT, FTX’s in-house cryptocurrency, and BUSD, Binance’s stablecoin, whose value is pegged to the U.S. dollar. Hmm. Binance triggered FTX's downfall by dumping FTT, causing th…

Does this mean that Sam was the one who sold Binance the FTT which Binance subsequently used to cause FTT to collapse? Yes exactly. Binance triggered FTX's downfall by dumping FTT I don't know if they actually dumped; they just announced it. It doesn't matter now.

It matters! Because that'd be hilarious. Is that really true that an announcement of a pending large sale (but no actual sale) was enough delta to topple the house of cards?

Fascinating.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#39

Post by engineer_22 »

FBM is a loon, and everyone knew it, but as long as they were making money they looked the other way.

The crypto bubble crash was directly driven by the COVID bailout. People had pockets full of money from day trading on robin hood, money flowing out of Blackrock like it was the big rock candy mountain. Nobody should be shocked, and the professional pension fund managers should be ashamed.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#40

Post by kevin_thibedeau »

slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

Zero interest rates make the rich desperate to find a new money printer.
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