Who is SBF?

SBF Trial

With the highly publicised trial of Sam Bankman-Fried starting last week, we at the Tech Society have decided to look into the collapse of FTX and its impact on the cryptocurrency market.

For those who are not aware of who Sam Bankman-Fried (more widely known as SBF) is, he is the former founder and CEO of cryptocurrency exchange, FTX. SBF is on trial facing a number of charges including money laundering, wire fraud and security fraud. If convicted of all charges, SBF could find himself in prison for the rest of his life.

The now-bankrupt FTX was once valued at $32 billion at the height of its short-lived success. The company's downfall can be traced back to a pivotal 10-day period in November 2022, which kicked off when crypto news site CoinDesk published a report citing concerns that FTX had potential leverage and solvency concerns, particularly concerning its sister company Alameda Research. Since then, it has came out that much of the billions of dollars invested in FTX is still missing, company funds were used to buy houses for employees in the Bahamas and the SBF-owned Alameda Research gave SBF himself a $1 billion loan (yes, you read that correctly).

Impact on the crypto market

Currently, the overall crypto market is steadily increasing from when it tanked from its great highs of 2021 (Total crypto market capitalisation is sitting at around one-third of its 2021 high). However, the market is still feeling the effects of what has been a turbulent few years for what many crypto-enthusiasts believe is the future.

The fall of FTX has been termed as "the biggest event in crypto's history" by Lee Reiners, lecturing fellow at the Duke Financial Economics Center. This event has led to something of a crisis of trust, prompting discussions about whether decentralized markets can truly be relied upon. The aftermath has spurred calls for tighter regulation, but this poses a fundamental question: does more control contradict the very essence of cryptocurrencies, built on decentralization and autonomy?

Many cryptocurrency bears who viewed cryptocurrencies as a potential hedge against inflation, akin to traditional safe-havens like gold are are being left confused as this narrative faces a challenge. The Federal Reserve has been consistently raising interest rates in 2023, which has not been met with a large increase in the crypto market.

What next for crypto?

As has been the case ever since the creation of cryptocurrencies such as bitcoin, it has divided opinion. You can find countless articles that lists the pro’s vs cons of cryptocurrency from ‘mainstream media’ such as the Wall Street Journal and The FT to pro-crypto Coinbase, CoinTelegraph and countless other websites.

When it comes to ‘what next’, we are afraid to give a prediction here at The Tech Society. There are many other publications and newsletters (some listed below) that have a much greater understanding of the topic. What we do believe is that cryptocurrency is not going to go away, but it remains to be seen what the lasting effects of the FTX collapse will be.

What else is going on in the world of tech?

23andMe data for sale. A hacker who has stolen data from ancestry company 23andMe is advertising the sale of data from the site. The company has responded saying that the company itself has not been breached, just individual accounts.

A rise in white supremacy groups on telegram. The number of so-called ‘Active clubs’, known for being a friendlier front for white supremacy is increasing across encrypted apps such as Telegram.

TikTok is expanding in Seattle. The holding company of TikTok, Bytedance has obtained another 66,000 square foot of office space in Seattle. This is the latest development in the company developing a wider footprint in the States.

Weekly Shoutout’s

Fitting for this weeks newsletter, we are given some crypto & SBF themed recommendations:

Newsletters – Bankless: The Ultimate Guide to Crypto. Subscribe to them if you’re interested in crypto, they know a lot more than us!

Books – Going Infinite: The Rise and Fall of a New Tycoon by Michael Lewis. Written by the award winning author of Moneyball and The Big Short.

Podcast - Spellcaster: The Fall of Sam Bankman-Fried

Just a note that the newsletter will be weekly (Monday’s) for a couple of weeks while some of the team are away on vacation. We will be back to bi-weekly in early November!

Thumnail Image Credit: Yahoo!Finance