More Sam Bankman-Fried News Articles and Other Finance News Articles (10 Reports)
~ Thursday, December 1, 2022 Blog Post ~
1. Consumer sentiment hits lowest level since July as fear of recession looms
Sources:
By Chris Matthews, November 11, 2022
Signs of easing inflation has yet to buoy Americans’ mood
The numbers: Consumer sentiment soured in November, hitting its lowest level since July as Americans contended with continued inflation and a worsening economic outlook.
The University of Michigan’s gauge of the U.S. consumer’s outlook fell 5.2 index points from 59.9 in October.
Economists were expecting a reading of 59.5, according to a Wall Street Journal poll.
Inflation expectations for the next year rose to 5.1% from 5% in the prior month, while five-year inflation expectations rose to 3% from 2.9% in October.
Big picture: Inflation eased somewhat in October, but prices for a typical basket of consumer goods are still rising a historically rapid pace even as rising interest rates are weighing on many sectors of the economy.
Fears of a coming recession also weighed on Americans’ confidence about the economy.
“Declines in sentiment were observed across the distribution of age, education, income, geography, and political affiliation, showing that the recent improvements in sentiment were tentative,” wrote Joanne Hsu, director of the survey, in a statement. “Instability in sentiment is likely to continue, a reflection of uncertainty over both global factors and the eventual outcomes of the election.”
Key details: A gauge of consumer’s views of current conditions fell in November to 57.8 from 65.6 in October, while an indicator of expectations for the next six months fell to 52.7 from 56.2 last month.
Market reaction: U.S. stocks were trading mixed Friday morning, with the S&P 500 SPX, +3.09% posting gains and the Dow Jones Industrial Average DJIA, +2.18% edging lower.
2. Big Short Michael Burry Says Don’t Touch Crypto Unless…
The advice of the legendary financier comes in the midst of a crisis of confidence in the cryptocurrency industry.
By Luc Olinga, November 9, 2022
It’s a difficult time ahead for crypto investors.
Just when they thought the wounds caused in the summer by a credit crunch at prominent lenders like Voyager Digital and Celsius Network were about to be healed, new wounds have just been inflicted upon them.
The crypto empire of former billionaire Sam Bankman-Fried, 30, is crumbling for lack of a savior. On Nov. 8, Binance, the world’s leading cryptocurrency exchange, said it would acquire its rival and also Alameda Research, another Bankman-Fried trading platform.
‘The Issues Are Beyond Our Control’
But the company had warned that the deal would only be finalized after due diligence. Some 24 hours later, Changpeng Zhao, CEO of Binance, announced that his firm was dropping the deal.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com," Binance said in a statement.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”
The firm does not provide any information on the issues Binance teams discovered while opening FTX’s books. But according to press reports, Binance has discovered a financial black hole, which means a gap between the liabilities and the assets of FTX. And this amounted to over $6 billion.
Now, the consequences for clients of FTX and its sister trading platform Alameda Research are only unknowns. Their customers seem likely to lose their money. Binance also seemed to suggest that there has been malpractice at FTX.
“Every time a major player in an industry fails, retail consumers will suffer,” Zhao also said. “We have seen over the last several years that the crypto ecosystem is becoming more resilient, and we believe in time that outliers that misuse user funds will be weeded out by the free market.”
‘You Don’t Know Anything’
FTX.com, which counts sports stars Tom Brady and Stephen Curry as ambassadors, was valued at $32 billion in a February funding round. But following its financial difficulties, the company is worth only $1, according to Bloomberg News.
FTT, the cryptocurrency issued by the platform, crashed nearly 60% at $2.29 on Nov. 9, according to data from CoinGecko. It’s a real rout for a cryptocurrency that had risen to $84.18 on Sept. 9, 2021. This token, which is an indication of the value of FTX, has a market value of $2.2 billion as of time of writing. The time to count their losses has come for FTX customers.
Michael Burry, the legendary investor who bet on the subprime mortgage meltdown that sparked the 2008 financial crisis, has advice for them and other investors interested in crypto: don’t touch it if you don’t want to burn your fingers because there is too much leverage.
“The problem with #crypto, as in most things, is the leverage,” the financier said on Twitter on Nov. 9. “If you don’t know how much leverage is in crypto, you don’t know anything about crypto, no matter how much else you think you know.”
The problem with crypto is that you can use the same coin as collateral to borrow multiple times against it. There is no transparency in the market to determine whether the same coin has already been used as collateral.
Unlike an everyday example of a house which cannot be used to obtain multiple mortgages as there are records allowing a bank to confirm whether a house already has a mortgage against it.
The fall of Bankman-Fried and FTX was swift: on Nov. 6, Binance said it would sell for $500 million FTT coins after news reports that the firm was on the brink of insolvency.
On Nov. 7, Bankman-Fried said everything was fine but 24 hours later he called Binance for help.
3. Crypto.com Withdrawals Rise After CEO Admits Transaction Problem
Concerns about the Singapore-based Crypto.com spread, with digital-currency traders on edge following the quick collapse of rival exchange FTX
By Caitlin Ostroff and Elaine Yu, November 13, 2022
Customers pulled funds from Crypto.com over the weekend after the company’s chief executive said the cryptocurrency exchange mishandled a roughly $400 million transaction.
Crypto.com Chief Executive Kris Marszalek said on Twitter that the transfer was sent to the wrong type of account on another exchange. The transfer of a large chunk of ether, a popular cryptocurrency, took place on Oct. 21, but came to light after Twitter users flagged the transfer as unusual, based on publicly available blockchain transaction records.
Concerns about Singapore-based Crypto.com spread across the internet over the weekend, with prominent digital-currency figures taking aim at the company. Cryptocurrency traders are on edge following the quick collapse of FTX, which went from one of the most trusted exchanges to bankrupt in the course of a week.
Changpeng Zhao, chief executive at Crypto.com’s larger peer Binance, appeared to question the nature of the transfers without naming the company, which may have fueled Sunday’s withdrawals, according to crypto industry players. “If an exchange [has] to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems,” Mr. Zhao tweeted Sunday.
The value of Crypto.com’s own cryptocurrency sank roughly 20% Sunday from the prior 24 hours. It traded near 6 cents apiece.
Mr. Marszalek dismissed the concerns about Crypto.com, tweeting later on Sunday that the October transfers had “generated so much [fear, uncertainty and doubt] & speculation on Twitter” weeks later.
A spokesman for Crypto.com said that the platform was seeing higher levels of activity, noting that it had assets fully matching customer deposits. “Fluctuations in deposit and withdrawal activity does not affect our levels of service,” he added.
An outside analysis of Crypto.com’s public blockchain from Argus Inc., a blockchain analysis firm, showed that between 7 p.m. EST Saturday and 5:30 a.m. EST Sunday, users withdrew a net $14 million worth of the cryptocurrency ether and $39 million worth of other tokens tied to the Ethereum network from Crypto.com. Over that same time, Crypto.com moved $33 million from other wallets to meet customer demands, according to Argus.
It appeared that Crypto.com had enough funds to meet user withdrawals, said Owen Rapaport, co-founder of Argus.
Crypto.com is a midsize exchange. It has tried to raise its profile over the past year among retail investors. In late 2021, it sponsored the arena that is home to LeBron James and the Los Angeles Lakers, renaming it the Crypto.com Arena from the Staples Center. It also ran its first Super Bowl ad this year and is a global partner of Formula One.
The transaction that sparked concerns about Crypto.com involved the transfer of 320,000 ether — or roughly $400 million worth of the token at the time — to a wallet linked to crypto exchange Gate.io on Oct. 21.
Over the weekend, Mr. Marszalek said on Twitter that the transfer was supposed to be a “move to a new cold storage address,” but was sent to an external exchange address.
“We have since strengthened our process and systems to better manage these internal transfers,” he said on Twitter.
A cold storage address is a type of wallet that is unplugged from the internet. It is considered the safest way to prevent digital currencies from being stolen or hacked.
Mr. Marszalek said the company had worked with Gate.io to return the funds back to its cold storage.
“It’s not looking good for these guys in general,” tweeted Adam Cochran, founder of venture-capital firm Cinneamhain Ventures, which invests in blockchain-related companies.
After FTX’s troubles began last week, a number of cryptocurrency exchanges, including Crypto.com, promised to publish proof of their reserves in the spirit of transparency. The audited proofs allow users to check that their own assets are covered by an exchange’s reserves.
4. FTX says it’s removing trading and withdrawals, moving digital assets to a cold wallet after a $477 million suspected hack
By MacKenzie Sigalos, November 12, 2022
*The new FTX CEO says the bankrupt crypto exchange is “in the process of removing trading and withdrawal functionality” and it is “moving as many digital assets as can be identified to a new cold wallet custodian,” according to a statement tweeted by the company’s general counsel.
*The announcement comes as the failed exchange investigates what it’s calling “unauthorized transactions” that began within hours of FTX filing for Chapter 11 bankruptcy protection in the U.S.
John Ray, FTX’s new CEO and chief restructuring officer, said the bankrupt crypto exchange is “in the process of removing trading and withdrawal functionality” and it is “moving as many digital assets as can be identified to a new cold wallet custodian,” according to a statement tweeted by the company’s general counsel, Ryne Miller.
The announcement comes as the failed exchange investigates what it’s calling “unauthorized transactions” that began within hours of FTX filing for Chapter 11 bankruptcy protection in the U.S.
The suspected hack was announced by an admin in FTX’s Telegram Channel, according to blockchain analytics firm Elliptic and was followed by a tweet from Miller indicating that the wallet movements were abnormal.
Figures from Singapore-based analytics firm Nansen published overnight show more than $2 billion in net outflows from the FTX global exchange and its U.S. arm over the past seven days, of which $659 million happened in the preceding 24 hours.
Elliptic found that $663 million in various tokens were drained from FTX’s crypto wallets. Of that amount, $477 million was taken in the suspected theft, while the remainder is believed to have been moved into secure storage by FTX.
Elliptic found that stablecoins and other tokens are being rapidly converted to ether and dai on decentralized exchanges, a technique the firm says is commonly used by hackers in order to prevent their haul from being seized.
“The way that these assets have been moved is highly suspicious,” said Tom Robinson, Elliptic’s chief scientist. “Very similar transaction patterns have been seen with large-scale thefts in the past — whereby the stolen assets are quickly swapped at decentralized exchanges, in order to avoid seizure.”
The new FTX chief said the exchange is coordinating with law enforcement and relevant regulators about the breach and that it was making “every effort” to secure all assets globally.
Miller, FTX’s general counsel, said the decision to push digital assets into cold storage was meant “to mitigate damage upon observing unauthorized transactions.”
People who choose to hold their own cryptocurrency can store it “hot,” “cold,” or some combination of the two. A hot wallet is connected to the internet and allows owners relatively easy access to their coins so that they can access and spend their crypto, whereas cold storage generally refers to crypto stored on wallets whose private keys are not connected to the internet. The trade-off for convenience with hot storage is potential exposure to bad actors.
— CNBC’s Rohan Goswami contributed to this report.
5. Bankman-Fried: From Crypto King to King of Tech Bubble’s Losers
Echoes of Enron and Lehman mark the demise of his FTX empire
Easy money, hubris and lax regulation precede fall from grace
Sources:
b. https://twitter.com/markets/status/1591550785841946624?t=azeA__8bK3YO9eRYn3ZhNg&s=09
6. ‘I f****d up’: the rise and fall of US crypto king Sam Bankman-Fried
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The 30-year-old wunderkind last week saw his giant FTX digital currency exchange collapse and his $17bn fortune disappear
He drives a Toyota Corolla to work, lives in a house with 10 roommates and a goldendoodle dog named Gofer, sometimes sleeps under his desk on a beanbag and was, until this week, worth tens of billions of dollars.
But on Friday, Sam Bankman-Fried, a curly-haired crypto king and Democratic mega-donor who claimed to be reinventing digital finance, gave up a week-long fight to save FTX, which in three short years since being launched had become the world’s second largest digital currency exchange. He resigned as chief executive and the company, and 130 affiliates were placed under US bankruptcy protection.
In the space of a few days, the 30-year-old has lost a $17bn fortune as a series of crises piled up. Concerns about FTX mounted until on Sunday, punters pulled $5bn of their cash from its digital coffers. The run came to an end on Tuesday morning, when FTX blocked further withdrawals in an attempt to remain solvent. Bloomberg called it the biggest one-day collapse of personal wealth ever.
FTX’s lawyer said the company was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges”. That came after Reuters reported that at least $266m had been withdrawn from FTX in 24 hours and that Bankman-Fried may have secretly transferred $10bn of FTX customer funds to Alameda Research, a hedge fund he owns and is run by his girlfriend Caroline Ellison.
This week, Bankman-Fried sought a bailout from archrival Changpeng “CZ” Zhao, founder of Binance, the world’s largest cryptocurrency exchange. Zhao first agreed, then walked away, leaving Bankman-Fried even more exposed and casting around for other investors to fill a reported $8bn hole in his trading balance. The collapse has huge implications for thousands of FTX customers, and for the crypto industry and its brand of highly speculative capitalism.
Bankman-Fried had set himself up as the acceptable face of a shady sector viewed with deep suspicion by regulators as a refuge for criminals, money launderers and sanctions busters — as a giant online casino in which bedroom traders could rack up life-altering losses.
He spent millions funding Joe Biden’s presidential campaign, becoming the largest Democratic donor after financier George Soros and wooing other left-leaning politicians.
“Politicians speak loudly about the other candidates’ source of money,” said Charles Elson, a corporate governance expert, before FTX collapsed. “If you have taken money from someone who blows up, questions will be asked.”
In Washington, Bankman-Fried lobbied for tighter regulation in an effort to advance his own business and make the industry palatable to US banking regulators. Now the reputation he built is trashed.
“I’m deeply sorry that we got into this place and for my role in it,” Bankman-Fried told employees on Tuesday morning. “I fucked up.”
Within the industry, FTX’s implosion is being called crypto’s “Lehman moment”, a reference to the collapse of Lehman Brothers bank in 2008 that triggered the global financial crisis.
The figure at the centre of the story is in many ways the archetypal Silicon Valley wunderkind — young, nerdy, socially awkward, clever and entrusted with the controls of mysterious but powerful financial instruments that can affect the real-world economy.
A New York Times profile said his awkwardness seemed “self-calculated”, but for a time it appeared Bankman-Fried — or SBF, as he calls himself — had a genuinely savant-like knack for the crypto business.
He grew up in the San Francisco Bay Area, within a family of academics, attending one of the top private high schools, Crystal Springs Uplands in Hillsborough, California. His parents are both law professors at Stanford University and he was born on its campus. His aunt Linda Fried’s academic career is even more illustrious. An epidemiologist, she is the dean of Columbia University’s Mailman School of Public Health.
In 2014, after graduating from Massachusetts Institute of Technology with a degree in physics, he joined New York trading firm Jane Street Capital, having worked there as an intern during his student days. Of his education, he said: “Nothing I learned in college ended up being useful … other than, like, social development. On the academic side, though, it’s all fucking useless … School is just not helpful for most jobs.”
In 2017, he moved back to California, where he worked for the philanthropic Centre for Effective Altruism. Shortly after, he founded Alameda Research, a quantitative trading firm named after a California city but with its headquarters in Hong Kong, and began speculating on bitcoin. FTX was founded two years later. His wealth ballooned during the pandemic and as he grew richer, Bankman-Fried also became a public figure.
He spoke of his commitment to “effective altruism” — a data-driven approach to philanthropy favoured by tech billionaires. He planned, he said, to give away his fortune. He shot Twitter videos with star American football quarterback Tom Brady, and dined with actor Orlando Bloom and singer Katy Perry. FTX put its name on the Miami Heat sports stadium in Florida.
When Bankman-Fried started bailing out other crypto platforms during the sector’s last crash in summer, he earned high praise from Anthony Scaramucci, Donald Trump’s shortlived White House spokesman, who compared him to the founder of JP Morgan bank.
“Sam Bankman-Fried is the new John Pierpont Morgan — he is bailing out cryptocurrency markets the way the original JP Morgan did after the crisis of 1907,” Scaramucci eulogised. Morgan’s bank went on to dominate Wall Street for more than a century. FTX lasted three years.
FTX is simple in concept: a trading platform like any stock exchange. Run from offices in Chicago and then Miami, but with headquarters in the opaque tax haven of the Bahamas, it took advantage of what the local authorities promoted as a regulatory jurisdiction ideal to “create abundance” for “a financial centre of the future”.
FTX organised showy public events. In May, the Crypto Bahamas event brought the world to Nassau for a lavish gathering attended by the supermodel Gisele Bündchen and her then husband, Tom Brady. Sporting his customary cargo shorts, Bankman-Fried shared a stage with Bill Clinton and Tony Blair.
In Washington, home to the US Securities and Exchange Commission, the body looking to bring crypto into compliance with US securities laws, Bankman-Fried pitched himself as the man you could do business with.
He supported Democratic political causes and gave $100m to the just completed midterm elections. He recently floated the idea of punting $1bn into the 2024 presidential campaign but called the idea “dumb” soon after.
He argued for tighter regulation of crypto, promoting the idea of blacklists of digital addresses linked to financial crime. In written testimony to the US Treasury’s financial stability oversight council hearing in July, Bankman-Fried said “FTX has aimed to combine the best practices of the traditional financial system with the best from the digital-asset ecosystem.”
Not everyone bought into his worldview, however. Perianne Boring, founder and chief executive of the Chamber of Digital Commerce trade group, said in a Bloomberg interview: “He is not the face of the industry and never was.”
“FTX hit every red light it could hit,” said Joshua Peck, founder of TrueCode Capital, a crypto asset manager, and author of the forthcoming book Cryptocurrency Risk Management: A Guide for Family Wealth Managers. “It’s Bahamian-registered, it’s never achieved Soc 2 compliance, which is an industry certification that says your internal processes are of high quality, and it has a lot of leverage. It’s a giant mess.” FTX has been approached for comment.
Bankman-Fried held up his hands, tweeting on Thursday that “poor internal labelling of bank-related accounts” meant he was “substantially off” in his calculations of the sums the exchange had lent out to users to let them make leveraged bets — borrowing money to trade with, magnifying potential gains and losses.
But there is another narrative playing out — that Bankman-Fried was undone by his friend turned rival at Binance. Zhao had invested $500m over the summer in the FTX currency, a token called FTT. On Sunday, Binance called in the debt. FTX was unable to meet the request. When other investors got wind of trouble, something akin to a bank run started and spun out of control.
Some have theorised that Zhao resented SBF’s call for tighter regulation. Binance did not return a request for comment. On Sunday, Zhao posted a tweet explaining his decision to pull out of FTT.
“We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.”
But Zhao also said in a note to employees on Wednesday that the then approaching collapse of FTX was “not a win”, it had “severely shaken” confidence in the industry and would trigger greater regulatory scrutiny.
Whatever the cause of his downfall, far from being the saviour of crypto, Bankman-Fried is now beginning to look as if he might be its undoing.
7. ‘This dude is bullshit’: Elon Musk describes the first time he met now-disgraced FTX founder Sam Bankman-Fried
Sources:
By Bethany Biron, November 12, 2022
*Elon Musk said his “bullshit meter was redlining” after meeting with Sam Bankman-Fried.
*His remarks came during a Twitter Space discussion with 60,000 attendees early Saturday morning.
*Musk said he felt there was “something wrong” during the discussion.
Elon Musk is piling on after the downfall of Sam Bankman-Fried, the founder of FTX, claiming his “bullshit meter was redlining” in a previous meeting with the disgraced crypto leader to discuss a potential Twitter investment.
Musk’s remarks came at around 2:30 a.m. ET Saturday during a Twitter Space conversation with 60,000 listeners, CoinDesk reported. The discussion began shortly after news broke on Friday evening that FTX was investigating “abnormal transactions” in an apparent hack, the cherry on top of a very bad week for the imploding crypto exchange.
“To be honest, I’d never heard of him,” the new Twitter CEO said, per CoinDesk. “But then I got a ton of people telling me he’s got, you know, huge amounts of money that he wants to invest in the Twitter deal. And I talked to him for about half an hour. And I know my bullshit meter was redlining. It was like, ‘This dude is bullshit’ — that was my impression.”
On Friday, FTX announced it was filing for Chapter 11 bankruptcy after failing to secure emergency funding. Bankman-Fried stepped down as CEO, lost 94% of his net worth, and admitted he “fucked up twice” in an apology on Twitter. He explained FTX’s decline was a result of high customer withdrawals and his incorrect assessment of the amount of debt the company had accrued.
On Saturday, the Financial Times reported that FTX carried just $900 million in sellable assets against $9 billion of liabilities one day before the company announced it was filing for bankruptcy.
While it’s unclear when exactly the meeting between Bankman-Fried and Musk took place, it appears to have been in the early days of Musk’s plans for a Twitter takeover, and well before FTX’s public downfall. Still, Musk said he felt there was “something wrong” during the discussion.
“Man, everyone including major investment banks — everyone was talking about him like he’s walking on water and has a zillion dollars. And that was not my impression … that dude is just — there’s something wrong, and he does not have capital, and he will not come through. That was my prediction,” Musk said.
Musk tweeted early Saturday morning “FTX meltdown/ransack being tracked in real-time on Twitter” and also posted a crude meme of Bankman-Fried.
The comments come as other crypto and tech leaders speak out about their own recent interactions with Bankman-Fried, including Brian Armstrong, the CEO of Coinbase, who told CNBC earlier this week that the FTX founder reached out to him to raise emergency funds for the struggling company.
“I was basically reading the room, and it felt like a pretty bad situation that we wanted to stay away from,” Armstrong said.
8. Sam Bankman-Fried’s entire fortune has now been wiped out as pieces of his crypto empire shrivel in value to $1
By Brian Evans, November 11, 2022
Sources:
*Sam Bankman-Fried’s fortune has been erased as his assets become essentially worthless, according to the Bloomberg Billionaire Index.
*At its peak, his net worth was $26 billion and still stood at $16 billion on Monday. But by Wednesday it had shriveled to $1 billion.
*By late Thursday, it was gone, with Bloomberg putting the value of FTX’s US business at just $1.
Sam Bankman-Fried’s fortune has been erased as his assets become essentially worthless, according to the Bloomberg Billionaire Index.
And that came before FTX and its affiliates filed for Chapter 11 bankruptcy early Friday.
At its peak, his net worth was $26 billion and still stood at $16 billion on Monday. But by Wednesday it had shriveled to $1 billion, according to Bloomberg.
By late Thursday, it was gone. The Bloomberg Billionaires Index put the value of FTX’s US business at just $1 — down from $8 billion after a January fundraising round — due to a potential trading halt. Bankman-Fried owns roughly 70% of FTX US.
In addition, his $500 million in Robinhood stock was stripped from his net worth figure after Reuters reported it was held by Alameda Research, the crypto trading firm he founded, and may have been used as collateral for loans.
Earlier in the week, Bloomberg had assigned a $1 valuation to Alameda. On Thursday, Bankman-Fried said he is shutting down Alameda.
The sudden loss of his fortune and FTX’s bankruptcy came amid a stunning series of events for the crypto sector.
CoinDesk reported last week that Alameda Research held a large amount of illiquid FTT on its balance sheet, spurring speculation that the trading firm lacked sufficient liquidity.
FTX halted customer withdrawals earlier this week after about $5 billion worth of withdrawal requests came in on Sunday. The exchange then sought out potential rescuers amid a liquidity crunch. On Tuesday, Binance said it intended to acquire FTX, but backed out a day later.
FTX then reportedly approached crypto exchange Kraken for a bailout and was also in talks with Tron founder Justin Sun, among others, for a rescue.
But reports that FTX transferred client funds to trading house Alameda earlier this year added to its legal risk, with the Securities Exchange Commission, Justice Department and Commodity Futures Trading Commission all investigating FTX.
Meanwhile, Bankman-Fried is also personally being investigated by the SEC for potentially violating securities regulations, according to Bloomberg.
9. Sam Bankman-Fried’s Apology Is as Hollow as His Empire
The downfall of FTX isn’t just about a frothy market coming undone. It looks more like the combination of a financial bubble and murky accounting with a dash of charisma thrown in.
Sources:
10. Tom Brady, Gisele Bündchen To Take Huge Financial Hit After FTX Collapse
Source: https://dailycaller.com/2022/11/12/tom-brady-gisele-bundchen-ftx-cryptocurrency/
By Andrew Powell, November 12, 2022
It hasn’t necessarily been the best year for Tampa Bay Buccaneers quarterback Tom Brady and his now ex-wife Gisele Bündchen, and things just a lot more difficult for the former power couple as their wealth is now under threat due to cryptocurrency exchange FTX crashing into bankruptcy.
Throughout the 72 hours before Nov. 8, FTX suffered over $6 billion in withdrawals, while the exchange’s market value dipped by 70% this week amid investors’ worries about the financial state of the company.
After FTX landed a bailout deal with rival exchange Binance, Sam Bankman-Fried — who is the CEO of FTX — lost 94% of his net worth overnight, amounting to a total of $14.6 billion, according to Bloomberg.
Though Brady and Bündchen won’t be seeing the massive loss of Bankman-Fried, they are expected, however, to suffer a serious dent with their investment in FTX.
Last year, the former husband and wife took an equity stake in FTX. Brady was named as the company’s brand ambassador and Bündchen as an environmental and social initiatives adviser.
“It’s an incredibly exciting time in the crypto-world, and Sam and the revolutionary FTX team continue to open my eyes to the endless possibilities,” Brady stated in a press release shortly after linking up with the exchange.
FTX’s crash falls in line with other cryptocurrency companies, who have also been spiraling downwards.
The biggest cryptocurrency of them all, Bitcoin, shot down 11% Nov.9, and that came after a 10% drop the day before Nov. 8, suffering similar numbers back in August.
Ethereum, another top cryptocurrency, also collapsed 18% Nov. 9.
With the FTX crash, financial experts are labeling it as an “alarm warning” for the struggling cryptocurrency market, stating that investors should be cautious for the unforeseen future when it comes to the digital money.
Tom Brady and Gisele Bündchen have a combined net worth of $650 million, according to CelebrityNetWorth.com.
I said last year that cryptocurrency had no sustainability and that it would eventually collapse, it just didn’t make sense economically (and still doesn’t) and the power of the U.S. dollar continues to run the world. Plus, it’s just too confusing to become a mainstream part of everybody’s lives and our everyday system.
Could you imagine your 86-year-old grandmother trying to figure out how to work her cryptocurrency on her phone? What about your 74-year-old grandfather trying to figure out how to mine for crypto? (Still have no idea what any of this lingo means, which explains why it never worked out. Nobody understands this stuff.) Are we really going to get rid of a physical form of cash ? You know that isn’t working.
Boy oh boy, the criticism that was received from that, and yet, here we are.
On to Tom Brady and Gisele: Yeah, they’ll take a hit in their finances, but come on, let’s not act like they’ll be in the brokehouse or anything. They’ll be fine. Still though, who likes losing money?
As a Miami Heat fan, I also have to point out their story with all of this cryptocurrency collapse happening. That’s the party who had the real tough break, not Brady and Bündchen, losing out on an easy $135 million in FTX sponsorship money. However, that whole scenario does give the Heat the opportunity to work out a new deal with American Airlines, seeing them go back to ‘AmericanAirlines Arena,’ with the nickname of the ‘Triple A’ — would love to see that come back.
Anyways, who else is happy they never invested in cryptocurrency?
