Things just keeps getting worse for Sam Bankman-Fried and FTX

In the beginning of the end of a story that could arguably prove Murphy’s Law, FTX – previously the world’s fourth-largest crypto exchange by volume – announced plans to file for bankruptcy on Friday. Its sister trading firm Alameda Research followed suit.

The now-infamous Sam Bankman-Fried (SBF) also got fried, resigning from his role as leader of both companies after overseeing the swift and tumultuous collapse of a company once valued at ~$32 billion.

Quick recap:

• A CoinDesk report, published two Wednesdays ago, exposed Alameda Research’s balance sheet. It had some pretty major issues.
• Cue: a run on the exchange. Traders withdrew $6 billion over a 72-hour period, creating a liquidity crisis.
• Rival crypto exchange Binance then agreed to bail out FTX, only to flip-flop after due diligence. A move probably related to Alameda Research secretly trading with billions of dollars worth of FTX customers’ funds. Between $1 billion and $2 billion is still missing.

It doesn’t get better either. Since declaring bankruptcy, FTX froze trading and withdrawals, reportedly due to a $477 million hack, transferring its remaining digital assets into cold storage (aka offline).

👀 Looking ahead… The exchange is currently under criminal investigation by the DOJ, SEC, and authorities in the Bahamas, where it and SBF are headquartered. And speaking of: reports over the weekend that he fled to Argentina – a country with US extradition – are greatly exaggerated.

+It’s giving Theranos: Alameda Research was overseen by SBF’s 28-year-old girlfriend, Caroline Ellison.