Sam Bankman-Fried is quickly becoming an outcast in the crypto community. After a liquidity crisis, SBF’s giant crypto exchange FTX will be acquired by Binance, CEO Changpeng Zhou revealed. Binance is the largest crypto exchange and acquiring its biggest competitor makes CZ the most powerful man in crypto.
Meanwhile, SBF’s fortunes are taking a turn for the worse. Within a couple of days, Sam Bankman-Fried, the second-richest man in crypto, has lost almost all of its wealth. According to Bloomberg’s Billionaire Index, SBF was worth $16 Billion before the liquidity crisis. However, he is now worth $991 million.
SBF’s troubles seem to only be starting. Experts believe that both FTX and its founder can see a large number of lawsuits heading their way.
Why Can SBF and FTX Face Legal Troubles
The crypto community is up in arms regarding the FTX crisis. Until this point, most of the crypto bear market was a result of macroeconomic conditions. Coinbase research pointed out that two-thirds of the selloff in the market is a direct result of the struggling macroeconomic outlook. As the general market would swing from the news of inflation and recession, so would the crypto market.
However, the current selloff is a direct result of the actions of FTX and Sam Bankman-Fried. Lucas Nuzzi, the head of R&D at Coin Metrics believes that FTX provided a massive bailout to Alameda Research. SBF also owns this trading company. He also claims that this bailout likely put such a big dent in FTX’s balance sheet that it no longer stayed solvent.
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Algorod, one of the biggest crypto influencers, believes that SBF may land in prison. David Bailey, the CEO of Bitcoin Magazine, also claims that FTX is 3AC 2.0. He claims that SBF was running a Ponzi scheme.
Will Binance Close The FTX Deal
Experts fear that Binance may not complete the FTX deal. The deal is still not legally binding as Binance has only put forward a letter of intent. If Binance pulls out, it will likely be the end of FTX.
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