What can we learn from the FTX collapse?
- franks_crypto
- Nov 15, 2022
- 1 min read
Updated: Nov 17, 2022
Sam Bankman-Fried (often referred to as SBF), was a darling of the crypto community. Venture capital funds sent over $2 billion his way with very few strings attached. He grew his business into an industry powerhouse in 5 years, challenging rivals like Coinbase and Binance. He was brilliant, young, energetic, and at least appeared to be altruistic, giving away fast sums of money to charity. And yet it all imploded in about 1 week. What led to this spectacular implosion?
I have posted links to a few articles I found especially interesting. One from CoinDesk that breaks down what ultimately led to FTX declaring bankruptcy, and Bankman-Fried resigning as CEO. The second link was a write up that Sequoia Capital put together that in hindsight has aged very poorly, but is still worth reading. It provides some insight into what motivated Sam. Obviously he is a very smart, driven individual - and it would not surprise me if we see him re-emerge from this mess to try to start another business. He is only 30 years old and realizes he over extended himself with all of the things he was trying to do at FTX. He also wasn't fully aware of the amount of risk FTX was taking on, and clearly seemed to rely too much on a small core of employees (who were generally young and somewhat inexperienced).
CoinDesk Covers the FTX collapse:
Sequoia Capital SBF bio:
Update: I found this article on Vox which makes me feel like it is quite unlikely that SBF has learned many valuable lessons from the implosion of FTX (see link below):
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