No long live the king, because the throne seems to have instantly vanished from everyone's view.
The king's court and his subjects are still in shock, dumbfounded by the fall of their lord.
They do not believe their eyes because everything went so quickly. And even in this realm of intrigue, where news travels fast, no one saw it coming. It will take them a long time to piece together what has just happened to their king, who is still down.
The king, who is usually talkative, has fallen into silence, as if he himself did not believe what just happened to him. His good star has faded and turned into a black hole.
Sam Bankman-Fried, 30, sat on top of the cryptocurrency industry, which aspires to completely replace the traditional financial services sector, until Nov. 8. He had gained power and control over the summer, taking advantage of a liquidity crunch caused by the fall of sister tokens Luna and UST or TerraUSD.
SBF, as he is nicknamed in the crypto industry, had, through his firm FTX Ventures, embarked on an acquisition spree and bailouts of struggling crypto firms, to avoid a collapse of the sector.
He gave credit facilities to lenders Voyager Digital and BlockFi and acquired a significant 7.6% stake in Robinhood, the brokerage house for Gen Z and millennials. He has an option to buy BlockFi.
More recently, the former Jade Street Capital trader, concluded a deal with Anthony Scaramucci, who was ever-so-briefly White House director of communications under former president Donald Trump. FTX Ventures will acquire 30% of Skybridge Capital, the alternative investment company founded by Scaramucci, aka "The Mooch.
"I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion," Bankman-Fried told NPR.
Bankman-Fried, who lives in the Bahamas, was the face of institutional crypto. In the last few months, he spent a lot of time in Washington, D.C., whispering in the ears of regulators on what rules to put in place for the crypto sector.
He had also become a big contributor to political campaigns, in an effort to get pro-crypto lawmakers elected.
"I was a significant donor in both D and R primaries," he posted on Twitter on Nov. 5. "Supporting constructive candidates across the aisle to prevent pandemics and bring a bipartisan climate to DC. And working with them to support permissionless finance."
At 30, he was credited with a fortune of $15.6 billion by the Bloomberg Billionaires Index, as of November 7.
But his rise was abruptly cut short on Nov. 8 at 11:03 a.m. ET, when he announced on Twitter that he had made a deal to sell his empire to arch-rival Changpeng Zhao, CEO of Binance, the largest stock exchange of cryptocurrencies and digital assets in the world by volume.
Six days earlier, a news story suggested his business Alameda Research, a cryptocurrency trading platform, was in financial trouble.
He did not give the reasons for this thunderclap announcement, especially when the day before he assured investors that his group was doing very well. But his rival took the gloves and was blunt.
"This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding letter of intent, intending to fully acquire http://FTX.com and help cover the liquidity crunch," Zhao wrote.
Basically, SBF and his empire were on the brink of insolvency.
The deal is pending due diligence, in other words, it's not even sure that it will happen.
Bankman-Fried owns cryptocurrency exchange FTX.com and Alameda Research.
The news caused the prices of cryptocurrencies and the values of companies in the sector to plummet. If SBF is not safe then who is? Bloomberg Billionaires Index has estimated that Bankman-Fried companies were worth only $1.
SBF’s fortune deflated at a speed rarely seen. He found himself, in a few hours, with a net wealth of only $1 billion, the bulk of it coming from his 7.6% stake in Robinhood, which was then valued at $618 million.
Nearly 24 hours after this collapse, the business community is still speechless, looking for warning signs.
The king is now naked.
How did it happen?
Author
Administraroot
