Thread by @notionhead

This is what happened with #FTX in a nutshell.

This is the story of FTX, the most preferred exchange after Binance and its founder Sam Bankman, the godfather of crypto and their valuation, from $32 Billion to zero in a matter of weeks. 👇

#FTXScandal #cryptonews #Bitcoin

Sam Bankman-Fried, a bright student who graduated from MIT with major in Physics and minor in Maths started his career in a trading firm - that didn't go well.
In 2018 he actually made a blow by making $25Million in a single day with arbitrage trading.

April 2019, FTX was launched and Sam started to dream of conquering the world. CZ (CEO of Binance) and Sam had a quality friendship that lead to Binance investing in FTX in the hope of a fruitful partnership.
Who knew that this newbie is going to hit Binance's door someday!?

In the world of crypto, you can keep lying and keep others' mouths shut until regulators hold your neck. This is actually what happened with FTX.
In the real world, you can't go public to start IPO unless you've that financial stability while in Crypto, you're public from day 1.

In 2021, FTX raised freaking $900M from Sequoia at a valuation of a shocking $18 Billion.
In a question about what else your exchange can do, Sam answered that you can buy bananas on our platform.
Well, that's not a joke.

In 2021-22 when multiple firms were getting bankrupt, Sam appeared as the godfather of crypto.
He saved Robinhood by buying a 7.6% stake, saved Voyager Digital and BlockFi from drowning, sponsored F1 teams, fundraised $5.2M for Biden, helped Elon Musk of $5M to buy Twitter.....

This is where it started to raise concerns : 0 to $32Billion in less than 3 years.
CEO of Alameda Research quit; a month later FTX president stepped down adding more confusion to the rabbit hole.
Regulators started probing FTX if they actually had the cash they claim to have.

Alameda Research's balance sheet got leaked showing that their net equity is actually the valuation of FTT tokens they hold.
Probing on FTX found out that instead of cash reserve, they're showing FTT tokens in their balance sheet.

👉 PANIC MODE ON for the crypto market 📉

Panic selling lead to a crash of the crypto market as well as FTT's price as they didn't have enough cash to offer.
6 Nov, CZ tweeted to sell their FTT holding

It leads to a total panic sellout of FTT and one of the biggest crashes of this year.

FTX didn't have enough cash if everyone wanted to withdraw at the same time, and the reason why they had to block withdrawing - led to more and more PANIC.
Meanwhile, CZ tweeted that FTX seeking for help and Binance will resolve this significant liquidity crunch to protect users.

After checking their balance sheet, CZ found out that the condition FTX is dealing with is severe and the future is hopeless. CZ took back his offer.
And that's how a $32 Billion dollar company crunched to zero in a matter of weeks.
Sam, once the godfather, is now a SCAM-STAR.

That's a wrap!

If you enjoyed this thread:

1. Follow me @notionhead for more of these
2. RT the tweet below to share this thread with your audience

https://twitter.com/1379772678517751814/status/1592800946035347458