FTX and Sam Bankman-Fried: Your guide to the crypto crash

livemint.com:

Sam Bankman-Fried was heralded as the savior of crypto. In recent weeks, his empire collapsed. Here’s what you need to know about the unraveling of FTX, including its founder’s rise to fame, how the firm failed and the collateral damage to customers and the crypto industry at large.

Mr. Bankman-Fried, often referred to as SBF, vaulted to celebrity with his attempts to make his crypto exchange into a household name.

The 30-year-old billionaire’s eccentric, unkempt appearance created an aura of genius. Venture capitalists got on board. High-profile athletes and musicians, and a wave of FTX ads, encouraged regular people to use the exchange to tap crypto’s moneymaking potential.

Mr. Bankman-Fried and FTX were among the biggest donors in the recent midterm election cycle, boosting their visibility in Washington. And when other crypto firms started collapsing this year, SBF extended loans to prop up ailing competitors.

Before creating FTX, Mr. Bankman-Fried founded Alameda Research, and it became a major player in crypto market making and institutional trading. Mr. Bankman-Fried recruited Caroline Ellison, whom he met while both were traders at Jane Street Capital, and she later became chief executive. Mr. Bankman-Fried remained CEO of FTX, the crypto exchange.

But even when Mr. Bankman-Fried was no longer at Alameda’s helm, he still owned 90% of it, according to bankruptcy filings. Alameda also traded on FTX.

Mr. Bankman-Fried repeatedly said that Alameda didn’t have any special privileges on FTX. Recent revelations cast doubt on those claims. According to bankruptcy filings, Alameda had a “secret exemption" from the exchange’s process for liquidating bad trades—a loophole that meant Alameda could take on more risk than other