At least WeWork had flashy buildings to flaunt for the billions of dollars ex-CEO Adam Neumann raised. But what did Sam Bankman-Fried have to show?
SBF, as he was often called, is a pathological liar, an alleged fraud and market manipulator and also a really horrible ex-boyfriend who’s pinning his entire downfall on his on-and-off girlfriend Caroline Ellison, who headed Alameda Research.
But the biggest lie that Bankman-Fried ever told likely has nothing to do with being a supposedly spendthrift billionaire who flew private or the backdoor code said to have been used to raid billions in customer funds from FTX.
It was probably the FTX exchange itself.
The very product Bankman-Fried paraded around the world to raise his billions and build political connections was error-prone, slow and often lagged during times of market volatility.
Customer service was said to be non-existent. An online complaint form was linked to a general email address that seldom replied.
There comes a point where this isn’t personal, it’s just the truth
For anyone actively trading, ftx is currently the worst of all the big exchanges
No other exchange will I have an order sit at the top of the book for minutes without getting even a fraction of the order filled
— Degen (@kerneltrader) April 26, 2021
FTX positioned itself as “built by traders, for traders” – given SBF’s and Ellison’s past work experience with Wall Street quant firm Jane Street – and quickly found a following in the depths of the previous bear market.
It went from processing a few thousand dollars in trading volumes after its 2019 launch to billions of dollars at its 2022 peak. These surging volumes and his company’s soaring valuation boosted Bankman-Fried’s ego, as he envisioned creating a one-stop exchange to trade anything from bitcoin to orange juice.
An army of venture capitalists, such as Sino Global Capital and Sequoia Capital, hyped the founder and exchange up. Crypto influencers on X (née Twitter) flashed affiliate links that gave discounts on fees. The unsuspecting retail audience bought into the dreams.
When the exchange was new, its technical flaws were more forgivable, especially because Binance’s early financial backing and Bankman-Fried’s reputation as a skilled arbitrageur gave the startup a sheen of respectability…
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