Why is he a big deal? Not too long ago, SBF was considered to be the face of crypto, and due to his young age, could be called a wunderkind. In addition, he had some high level friends that helped promote his exchange platform, which in the eyes of the public, helped his credibility and made using FTX for buying, exchanging and storing cryptocurrencies the cool thing to do. Some of his high level friends, or FTX ambassadors, included...
- Tom Brady and Giselle Bundchen
- Steph Curry
- Naomi Osaka
- David Ortiz
- Kevin O'Leary
Billions of dollars belonging to innocent customers were lost with the collapse of FTX and it seemed to happen overnight. SBF went from a high roller, living his best life in the Bahamas, donating millions upon millions to the Biden administration and making friends in all the right places to completely losing everything.
After being arrested in the Bahamas, he was moved to the US and was allowed to be on house arrest with his parents after putting up a whopping $250 million bail. Unfortunately for him, he did not keep up his end of the bargain because he was accused of trying to influence witnesses who are to testify against him and released his ex-girlfriends diary in hopes to prove his innocence. Throughout the rest of his trial, he will be chilling at the Metropolitan Detention Center in Brooklyn.
The FTX collapse did not look good for Bitcoin or other cryptocurrencies at the time. Some crypto skeptics consider it to be a scam and think it is unsafe because the government does not control it and fraud can easily happen. The BIG lesson to learn from the fall of FTX and other crypto exchanges is to NOT store your cryptocurrency on the exchange and self-custody your Bitcoin and other cryptos. Remember, "not your keys, not your coins".
Trusting a third party to hold your Bitcoin means that they are not your Bitcoins. It makes total sense to use these exchanges to purchase, sell and exchange different forms of cryptocurrencies. But, at the end of the day, if you do not store them yourself, you do not own them and you are trusting your hard earned money and life savings to someone else.
Sam Bankman-Fried's trial will make headlines daily for the foreseeable future. He was well known in the crypto space, connected to high-level players, successful at a young age, and seemingly had everything he could ever dream of. The fact that his business associates all received plea deals and SBF was not even offered one shows that there is a strong case against him.
It may be convenient for naysayers to link the collapse of SBF and his crypto exchange platform FTX to Bitcoin and other cryptocurrencies. However, having a business in cryptocurrencies is not why he is on trial. He is on trial for fraud, which can happen anywhere, in any industry, at anytime.