December 2021. Bitcoin just hit all-time highs above $69,000. The specialized portal Coindesk awards the title of most influential man in the crypto world to Californian Sam Bankman-Fried (SBF), head of the FTX trading platform. Also on the list are the Korean Do Kwon, founder of the digital currency Luna, and the Canadian of Chinese origin Changpeng Zhao (CZ), boss of Binance, FTX’s great competitor. The three attract the attention of the magazine Forbeswhich chooses Kwon among the 30 most important personalities in Asia under 30 years of age, and places SBF and CZ in positions of honor in its ranking of the richest on the planet.
These are days of wine and roses. The American runs his business from a mansion in the Bahamas with a group of friends. Some media compare him to the famous investor Warren Buffett. And nothing in abundance: he is the second man in history with the greatest fortune before turning 30, specifically 22.5 billion dollars, only behind a certain Mark Zuckerberg. The Canadian CZ is not far behind. Climb positions day after day, and Forbes attributes a sum of 65,000 million dollars to it. Above the Spanish Amancio Ortega and his Inditex empire. “I don’t know how much money I have,” he will say in an interview with EL PAÍS in April 2022.
The three tweet with vigor and promise a better life for those who place their savings in the emerging universe of cryptocurrencies, destined to take away the monopoly of money from central banks. “The lunar cycle has only just begun,” says transcendently Kwon, who after leaving Stanford University (California), where he studied computer science—the same as CZ—worked for Apple and Microsoft.
A fan of video games, some Sundays he shares with his million followers on X (then Twitter) photographs in which he appears playing Starcraft, a futuristic adventure that pits three races against one another for control of the galaxy. Luna’s revaluations are earning those who bought it mountains of money, fueling his reputation as a visionary genius. The world seems like a kind place and they are young innovators. SBF, son of two prestigious law professors, graduated in Physics from the renowned Massachusetts Institute of Technology (MIT), also escapes by playing Starcraft and League of Legends.
The crypto aristocracy thus presents itself to the world with a certain nerdy aesthetic that does not clash with the new digital ecosystem of Silicon Valley and the addiction to screens. Their objective is ambitious because their raw material is coveted: money, which they seek to push to an unprecedented technological leap. “The most exciting thing about cryptocurrencies is that they will facilitate the Great Migration of human activity from the physical world to the internet,” says Kwon.
Some of the most prominent men from successful companies, such as Elon Musk (Tesla) or Jack Dorsey (co-founder of Twitter), as rich as they are eccentric, not only give them their blessing, but also promote them on their social networks. And as is usually inevitable with any business that involves quick profits, Wall Street enters the scene: the American platform Coinbase begins trading and makes investing in cryptocurrencies within the reach of stock market regulars.
The crypto rise has its rebound effect. An army of detractors joined by numerous Nobel Prize winners, central bankers and economists. And in the midst of growing regulatory obstacles, an intense work of lobby starts. CZ is seen with ministers and heads of state from around the world on a frenetic tour. He is photographed with the Frenchman Emmanuel Macron—to whom he promises to place his European headquarters in Paris in exchange for a kind regulation. And of course with the Salvadoran Nayib Bukele, convinced of being able to turn the Central American nation into a world power of cryptocurrencies.
SBF, meanwhile, unceremoniously draws on its checkbook to hire sports stars, sponsor NBA stadiums and advertise in the very expensive SuperBowl advertising intermission. And he seeks to expand his influence by pouring cash into the campaign of then-Democratic candidate Joe Biden, becoming, with $5.2 million, his second largest donor, only behind the $56 million of former New York Mayor Michael Bloomberg. Winning over politicians becomes a priority.
Until something goes wrong.
December 2023. Bitcoin is worth a third less than in its best times, although it seems to be recovering from a dark period of price declines full of bad news. The so-called crypto winter. The industry’s speed at changing course also applies to its managers. None of the members of the promising triumvirate are already on the front line to see it. Do Kwon has been in police custody in Montenegro for eight months after being detained at that country’s airport in a desperate attempt to prolong his escape. And justice has just authorized his extradition, although no one knows exactly where. He is claimed by both his country of origin, South Korea, and the United States, for having defrauded 40,000 million dollars and left the millions of investors who bought Luna in ruin and in May 2022 saw its value go to zero in Just a few days.
FTX went bankrupt a year ago. And there were those responsible and negligent. Sam Bankman-Fried was arrested in the Bahamas, extradited to the United States, and faces a maximum sentence of 110 years in prison for being responsible for a $10 billion hole. The testimonies of his team and the auditor who took charge of the restructuring of the firm to try to recover as much as possible, speak of the platform not maintaining the appropriate books and records, nor the security controls. And a was used software to conceal the misuse of clients’ funds, with which homes and personal items were purchased.
Everything came down, in the auditor’s words, to “a very small group of people without experience or preparation.” An ocean liner that was too big for them ended up in his hands and sank. The users have not recovered their money, and SBF awaits the outcome of the trial at Brooklyn’s Metropolitan Detention Center in New York, where it shares space with other high-profile detainees, such as former Honduran president Juan Orlando Hernández, accused of cocaine trafficking. There, in prison, the currency is different. According to him Wall Street Journal, Bankman-Fried paid for a haircut with cans of mackerel.
The best stopper of the three (so far) is Changpeng Zhao. Especially since she is still free. Last month, American justice forced him to leave his position as CEO of Binance, and in an agreement with the Department of Justice, he agreed to pay a fine of $50 million after pleading guilty to violating money laundering laws in the United States. In the US, Binance will also have to dig deep into its pockets and pay around 4 billion euros, but the sanction does not jeopardize the survival of the company, the absolute global leader in crypto transactions, for which it charges lucrative commissions in exchange.
Zhao, a leader in the crypto community with 8.7 million followers on X, will even be able to maintain shareholder control of the company. His punishment, therefore, is to lose the managerial power that led him to continually rub shoulders with political and business leaders. He says himself surprised by the abrupt change in his life. “The first thing I will do is take a break. I haven’t taken a single day off in the last six and a half years. “I’m ‘enjoying’ all the free time I suddenly have,” he tweeted shortly after learning of his forced departure.
Their one-time rivals Do Kwon and Sam Bankman-Fried, stripped of their fortunes and businesses and hated by the millions of customers they left without savings, would like their biggest concern to be something as trivial as what to do to fill of activities an agenda that has been dyed white.
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