Bahamian Billionaire Bailout
When the crypto bros emerged from their caves and became the hottest thing in finance, they were broadly seen as the good guys.
Wall Street had been in bed with the feds for too long, and here were the saviors ready to blow up the establishment.
- We trusted these supergeeks with more of our hard-earned dough than we’d care to admit without understanding a thing about the underlying technology
- The FTX drama has shown that decentralization and light regulation over anything having to do with money can be sketchy
- Crypto has a long uphill climb back to its 2020/2021 peak
Here’s an overly simplified synopsis of the Binance/FTX drama:
SBF managed to elevate himself to the crypto god tier, amassing a net worth of $26 billion at his peak through his firm FTX. And he didn’t just do well for himself—he made it his mission to fight against the crypto winter, pouring personal funds into various nearly-dead projects from his base in the Bahamas.
As Robinhood made abundantly clear during its $GME charade, wild swings in prices can dry up cash reserves faster than people realize. Freefalling crypto prices sent FTX into a liquidity crunch, and it was basically in a get-funding-ASAP-or-die situation.
Binance was initially declared the savior, announcing it would swallow up FTX at cents on the dollar. SBF’s firm was saved, but his fortune had been decimated. Now regulators are spoiling the party, and the deal is dead in the water…gotta keep your head on a swivel with this story.
Crypto evangelists will say that mismanagement was the root of FTX’s woes, but it’s hard to see how clearer regulation wouldn’t have at least softened the blow.
The big question: Will regulators pounce on the opportunity to crank up crypto regulation in response to the Binance/FTX drama?
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