SBF, CZ, FTX & BINANCE — A TIMELINE
This week is one for the history books. What happened the last 72 hours is something no one could have imagined. It once again shows, that this space is only 10 years old and full of inexperienced and bad people, that made a lot of money over a very short period of time.
In this article we do not wish to pass judgment on whether SBF carried out his deeds consciously or unconsciously, whether he secretly had good or bad intentions. Rather, we would like to shed light on the story of the former second most powerful man in the crypto industry and his fall down.
SBF was born in 1992 on the campus of Stanford University into a family of academics. Studying at MIT, he graduated with a degree in physics and a minor in mathematics in 2014. He then started a classic career in finance until he launched Alameda Research, a digital asset-focused proprietary trading and venture capital firm.
The Start Of FTX
Incubated by Alameda Research and backed by Binance SBF and Gary Wang launch FTX, an exchange incorporated in Antigua and Barbuda and headquartered in The Bahamas. They started spending a lot on marketing e.g. they bought over the the naming rights of the former American Airlines Arena for $135 million and finally renamed it FTX Arena in 2021.
FTX grew steadily and by the end of 2019 they were already valued at $1 billion.
FTX On The Rise
With support from industry heavyweights like Blackrock and Temasek Holdings FTX raised $430 million, drawing in 69 investors in total and was now valued $25 billion in 2021. VIPs like Tom Brady and Gisele Bundchen jumped on the hype train and took equity stakes in FTX.
With the acquisition of BlockFi for $250 million the rise of FTX continued and SBF’s rise also continued. In August 2022, Alameda Research Co-CEO Sam Trabucco announced his retirement and SBF became one of the richest men on earn with a total net worth of $22.5 billion.
In September the same year FTX won the Voyager Digital Assets Auction for $1.4 billion but the facade slowly began to crumble, when Brett Harrison, the next employee in a leadership position announced his retirement.
In October 2022 SBF launched a report on his thoughts on crypto regulation. His statements were met with severe backlash from the crypto industry and SBF gos on bankless to discuss regulation with Erik Voorhees.
And all of a sudden everything changed real quick. Alameda’s balance sheet got leaked and showed, that it’s largely made of FTX’s native FTT token.
CZ, the Co-Founder and CEO of Binance announced their plans to sell $2.1 billion in FTT holdings, which led to FTT withdrawals. In return Caroline Ellison, the CEO of Alameda, offered to buy the FTT from CZ for $22.
But this play isn’t working out, the FTT token price falls from $23 to $16 and Alameda start to sell off SOL to maintain the price of FTT.
SBF then tweets, that Binance is going to acquire FTX and FTT pumped back to $18 but took a fall to $4 shortly after.
After their due diligence Binance decided to not pursue the potential acquisition of FTX and currently FTT is trading at $2.82 and bankruptcy is likely.
CZ summed up, what business can learn:
We will see if the “King Of Crypto” stays to his words. In moments like these everything is possible.
And what about the retail?
In any contagion, yield was the common denominator. Many people were brought into space by the pursuit of profit, but it was a double-edged sword that caused them to fall:
- The fall of LUNA was attributed to chasing the 20% of UST yield.
- Celsius has an unsustainable yield on other assets.
- Alameda is taking loans from FTX for extra yields.
- …and don’t forget 3AC as well.
There is no evil greater than greed and the decisions made at the top by people plagued by greediness will affect everyone below.
Stay safe! Never give up and keep building. This space is the most amazing thing that happened to us in the last decade and we should all fight for it.
Who We Are
Moonrock Capital is a Blockchain Advisory and Investment Firm, incubating and accelerating early stage startups since 2019.