Sam Bankman-Fried, the founder and former CEO of the cryptocurrency exchange FTX, is now said to be selling his home in the Bahamas. Bankman-Fried is also said to be hiding out in the Caribbean island nation as allegations continue to be leveled against him as to why exactly FTX, a one-time powerhouse, fell apart so quickly.
The luxury penthouse that Sam Bankman-Fried owns there is said to have 12,000-square-feet of space and five bedrooms. He is reportedly asking about $40 million for the property.
Based in the Bahamas, FTX is a cryptocurrency exchange that says it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX has more than one million traders using its services.
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When FTX crashed, Sam Bankman-Fried himself lost 94% of his total wealth, or about $14.6 billion and he must now sell whatever is left of FTX to chief rival Binance. That is if all things work out. FTX, it seems, was nothing more than a house of cards built upon its own assets. The company’s net worth was based on ownership of its own tokens. This means that FTX claimed to be wealthy because it owned the same crypto tokens the company issued. And these tokens had no tangible net worth. Last week the house came down.
The downfall of FTX is having a ripple effect throughout the crypto industry. Cryptos like Bitcoin had already crashed and were left with only a fraction of their highest values. And now President Biden and many political leaders around the world are calling for the implementation of new regulation over the entire crypto market.
This could mean the death of all crypto exchanges, not just FTX. Once under the scrutiny of government agencies like the SEC, which will require full transparency of all of their transactions, and once government impose full capital gains taxation on the profits – just as is done with stocks – then the party will surely be over for Cryptos.
Their main advantage to date has been their anonymity, which lends itself to money laundering. For example, who really knows how much someone paid for a Crypto originally and when they bought it. In this way one can take illicitly gained funds and claim they were earned through Cryptos.