The crypto-collapse: inside the crazy world of FTX

Today in Focus Series

The cryptocurrency exchange FTX collapsed earlier this month, leaving billions of dollars unaccounted for. Alex Hern explores what happened and where the money went

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For a time, it seemed that everything Sam Bankman-Fried touched turned to gold. He’d been a maths whiz at university and made a fortune trading cryptocurrencies for a hedge fund before striking out on his own and founding a crypto exchange: FTX. The crypto boom made him a billionaire and he moved into a $40m apartment in the Bahamas with eight others in the group’s inner circle who were romantically linked. There were reports that stimulants were doled out to staff who worked intensely long days, often sleeping on beanbags at their desks.

Earlier this month, the music stopped. As investors in FTX began to take fright at rumours of a black hole in its balance sheet, the panic spread and Bankman-Fried failed to calm it. FTX collapsed, taking billions of dollars with it, and Bankman-Fried stood aside. Having become an ambassador for the crypto industry and one of its most trusted faces, he had become a pariah.

The Guardian’s UK technology editor, Alex Hern, tells Hannah Moore that the rapid downfall of FTX is just the latest cautionary tale for those who have invested huge amounts of money – and faith – in cryptocurrencies.

Sam Bankman-Fried’s penthouse – 'the Orchid', located in Albany, an exclusive private community in Nassau.
Photograph: TWITTER/FTX/REUTERS
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