The collapse of the crypto exchange FTX has sent shockwaves among the crypto community and investors alike.
Most of the attention has been on former CEO and founder Sam Bankman-Fried who has since resigned.
From billionaire to zero
Bankman-Fried was recently estimated to be worth $23 billion and his net worth has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s wealthiest people.
Bankman-Fried vanished from the Bloomberg Billionaires Index after his net worth just vaporised, falling 94 per cent in a single day, the worst ever recorded.
Before the news of the cash crunch broke, his net worth was around $15.5 billion.
FTX was run by a gang of kids
Now more ‘dubious’ details are emerging about the others who were involved in running FTX, which was based in the Bahamas.
According to CoinDesk, which first reported the troubles of FTX, the entire operations were run by Bankman-Fried and his inner circle, just 10 people who were also roommates.
The report said all 10 are or used to be, paired up in romantic relationships with each other.
“The whole operation was run by a gang of kids in the Bahamas,” CoinDesk reported, citing a source who was familiar with the matter.
Sam Bankman-Fried’s inner circle
Among his nine housemates are FTX co-founder, Chief Technology Officer Gary Wang, FTX Director of Engineering Nishad Singh, Ellison of Alameda Research and Bankman-Fried. The remaining six are also FTX employees.
“Gary, Nishad and Sam control the code, the exchange’s matching engine and funds,” the first person familiar with the matter said. “If they moved them around or input their own numbers, I’m not sure who would notice.”
Inner circle aware of troubles
Wang, Singh and Ellison also comprise the board of Bankman-Fried’s FTX Foundation, the company’s philanthropic arm. Several housemates, including Bankman-Fried and Ellison, are active participants in effective altruism, a movement that “aims to find the best ways to help others”, possibly through philanthropy.
Most of the 10 roommates were either Bankman-Fried’s college friends from the Massachusetts Institute of Technology or former colleagues from Jane Street.
FTX and Alameda employees, whom CoinDesk interviewed, say they have been kept in the dark about the past week’s events, adding that only CEO Bankman-Fried’s inner circle may have had knowledge that the exchange had siphoned customer funds into Alameda Research.
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