The failure of FTX and Sam Bankman-Fried will leave deep scars

livemint.com:

Nobody in crypto has slept in days. That, at least, is what it feels like in the never-ending Twitter “spaces" which have been running since ftx, a Bahamas-based crypto exchange and crown jewel in the empire of Sam Bankman-Fried, its once-feted founder, filed for bankruptcy on November 11th. The scattered crypto-community often comes together in these online forums—they are where people shill tokens, organise pump and dumps, and occasionally even discuss exciting innovations. In the days after the fall of ftx and Mr Bankman-Fried’s other firms, including ftx.us, an America-based exchange, and Alameda Research, a trading firm, they became places for traders to mourn, former employees to spill the beans and other exchange operators, including Changpeng Zhao of Binance and Jesse Powell of Kraken, to try to reassure customers.

In other words, they are places that now reek of despair—not just about the billions of dollars that are trapped on a defunct exchange, but about the architect of the mess. Mr Bankman-Fried was crypto’s golden boy. He studied physics at the Massachusetts Institute of Technology and was supposed to have learned the craft of marketmaking and trading at Jane Street, an elite financial firm. It was this, along with the fact that ftx gobbled up market share after it was founded in 2019, that attracted investors like Sequoia, considered one of Silicon Valley’s sharpest venture-capital firms, and Temasek, Singapore’s sovereign-wealth fund. Mr Bankman-Fried used his credentials and newfound wealth—ftx was worth $32bn at its peak in January—to donate to politicians, push his views on regulation and buy up competitors. He was supposed to be crypto’s future. Instead, he may have robbed the industry of one.

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