One British man describes how the demise of Sam Bankman-Fried’s business cost him a fortune at a time when the self-proclaimed “King of Crypto” is due to go on trial for several fraud allegations.
Sunil Kavuri believed Sam Bankman-Fried could change the situation up until the final collapse.
While others panicked because the King of Crypto’s realm was waning, Kavuri remained composed.
He became resistant to market dramas as a result of experience trading for banks and investing in crypto currencies.
Additionally, Bankman-Fried, the self-proclaimed savior of cryptocurrency, continued assuring everyone that everything will be alright.
But then the word “withdrawals suspended” appeared on the screen.
In November of last year, FTX, formerly the second-largest cryptocurrency exchange in the world, declared bankruptcy.
Years of shrewd, demanding, and profitable business were lost for Kavuri.
His $2.1 million (£1.7 million) was gone.
I tried to email the FTX support number to get my money out while refreshing the website for literally 24 hours. The flu struck me. That was all I could think of, oh my God. I’ve lost everything, he says.
Kavuri, a native of the East Midlands, was saving money for a new house and for his son’s college tuition, but now, almost a year later, all that is left of what was once his is the paper trail.
He is believed to be the most severely affected British victim of the FTX failure.
Marketing for FTX had touted it as a risk-free option for everyone to participate.
The exchange functioned as an unregulated bank, enabling users to exchange cash for digital currency like Bitcoin and hold their money there for added security.
In 100 nations, it garnered nine million customers. More than a million users lost money when it crashed because they were unable to withdraw their funds in time. According to court records, individuals who suffered financial losses included companies, investors, and even charity.
The high-profile trial against Sam Bankman-Fried will start the next week with seven counts of fraud, conspiracy, and money-laundering. According to Bankman-Fried, “I didn’t steal money, and I didn’t hide billions.”
The 31-year-old who formed FTX and the cryptocurrency hedge fund Alameda Research entered a not guilty plea and will be transported from prison to a New York courthouse to contest the accusations.
Other executives from his enterprises have also entered guilty pleas and are scheduled to testify about how their once $40 billion empire came to an end.
The main accusation is that Bankman-Fried cheated clients by using their money to support his own dangerous hedge fund bets. He donated to politics and spent millions on opulent real estate.
After a bombshell investigation into FTX by news site Coindesk, Bankman-Fried’s downfall started. It was discovered that Alameda Research’s financing were based on cryptocurrency tokens created and manufactured by his other company, FTX. Alameda’s assets worth billions of dollars were essentially being supported by a hazardous and unpredictable crypto coin.
Before the FTX exchange platform went under and filed for bankruptcy, panicked users rushed to withdraw billions of dollars from it.
Bankman-Fried expressed regret for his financial errors in interviews, including one with the BBC, shortly before his detention in The Bahamas. He argued that none of them were intentional or wrong, though.