Who is SBF, the founder of FTX, who caused countless investors to lose their wealth in an instant? What makes him different from other crypto tycoons? Sam, who is only 31 years old this year, is known as SBF. The first impression he gives everyone is his messy hair that seems to never wake up. He dresses very casually, wearing a T-shirt, shorts and a backpack, which is no different from young people nowadays. Before FTX collapsed last year, SBF was named the next Warren Buffett, a tycoon in the cryptocurrency circle with assets of up to 17 billion US dollars, but now his wealth has dropped to zero.

This crypto tycoon who has fallen from grace was born in 1992 into an academic family in the Bay Area of ​​California, USA. Both his parents are professors at the Law School of Stanford University. His father is a top scholar in the field of tax law, and his mother is a lawyer and economist. Although he is the son of a professor, SBF is not very interested in academics and has hated school since he was a child. One day when he was in seventh or eighth grade, he suddenly cried in front of his mother and said, "Mom, I'm so bored, I'm going to die." Then the couple sent their son to a math camp, which led to SBF's interest in solving puzzles and his excellent management skills.

Although he had no interest in school, SBF entered MIT in 2010, majoring in physics and minoring in mathematics. However, he later complained that the academic knowledge he learned at MIT was not useful in the end. In his sophomore year, SBF came into contact with the concept of "effective altruism", which is to find ways to maximize the positive changes that everyone can bring to society. For example, instead of working hard to become Mother Teresa and help the world, it is better to find ways to make a lot of money on Wall Street and donate the money to Mother Teresa. Everyone has their own responsibilities and can play to their strengths.

SBF believes that this concept was a turning point in his life. From then on, he took earn to give as his belief and began to analyze how to do charity most efficiently. He found that instead of donating money to the theater, it was better to donate it to the Malaria Prevention Foundation to save lives in developing countries. At the same time, he became a vegetarian, and his favorite vegan food was Oreo cookies. While studying at MIT, SBF went to Jane Street Capital, a well-known investment management company, for an internship. There, SBF finally found something he didn't find boring, which was trading. So after graduating from MIT in 2014, he stayed there and worked for 3 years. SBF told Yahoo Finance that he donated more than half of his salary from three years of work to charity.

In 2017, SBF discovered the potential arbitrage opportunities in Bitcoin. The price of Bitcoin on Japanese exchanges was 10% higher than that on American exchanges. He thought that as long as he kept buying Bitcoin in the United States and then sold it on Japanese exchanges, he could make money. So, SBF found a few friends and founded his own quantitative trading company, Alameda research, to start his plan to make a fortune. He began to do arbitrage, that is, buy low and sell high to make money from the price difference. They transferred money crazily every day, with a daily trading volume of up to 25 million US dollars. Just by arbitrage, SBF made a huge profit of 20 million US dollars.

Then in 2019, when Hong Kong's regulation was still very loose, SBF decided to stay in Hong Kong and set up its own trading center FTX. In this exchange, you can buy and sell various cryptocurrencies and digital assets such as Bitcoin, as well as high-risk currency investment derivative financial products, and provide financing loans. You can also open leverage to burst. How scary is this? Before 2021, FTX allowed customers to have a margin ratio of up to 100: 1. In other words, as long as you pay a margin of $1,000, you can buy $100,000 worth of cryptocurrency derivatives. But as long as the price of the currency fluctuates sharply, investors will be washed out in an instant, not only will their assets return to zero, but they may also be burdened with huge debts. It is common for cryptocurrencies to rise and fall by 10 to 20% a day. It was not until 2021 that FTX adjusted the margin ratio to 20: 1.

After starting his business, SBF only slept four or five hours a night, and often slept in the office, so that he could stay in work mode at any time. If employees had any questions, they could wake him up at any time. After all, cryptocurrency trading is 24 hours a day, 365 days a year. SPF's marketing skills are also very clever. In addition to finding a bunch of celebrity endorsements, it also spent $135 million to buy the naming rights of the Miami Heat's home court, and even entered politics. According to the Washington Post, SBF was the second largest donor to the Democratic Party in the US midterm elections last year, second only to financial tycoon Soros, and he donated a generous $39.2 million. In just less than three years, SBF has become a hot crypto tycoon, and FTX has become one of the world's largest corporate behemoths, with a valuation of up to $32 billion. Many people think he is one of the most generous billionaires.

SBF said that he did not need luxury cars and watches to show off his wealth, and a Toyota Corolla was enough for him to get around. In 2021 alone, SBF donated $50 million. In 2023, he plans to donate $500 million a year. He plans to donate more than $10 billion in the next 10 years. Everyone knows what happened next. In short, the cryptocurrency issued by FTX was shorted by opponents, who believed that FTX misappropriated user assets and was insolvent. Then there was a panic withdrawal in the market, and assets worth up to $6 billion were withdrawn within three days. In the end, FTX declared bankruptcy due to a lack of liquidity, and SBF's donation promise also came to nothing.

SBF later posted a long string of tweets on Twitter, in which he apologized to everyone and tried to explain what went wrong with FTX. He said that a few weeks before the crash, FTX was processing $10 billion in trading volume per day, including billions of transfers, but the leverage was too large, more than he realized. In the end, the bank ran and the market collapsed, exhausting liquidity. Before the FTX empire collapsed, he was on the cover of every magazine. In the end, he said, we became too confident and too careless. Later, as everyone knows, SBF was arrested, sentenced for multiple crimes, and is still in prison. As for whether he can get out in the future, there is no way to know.

In short, no matter which cryptocurrency giant you are, don't worship them too much. Many of them may just be packaging. Don't change them. As the old saying goes, investment can make you win or lose, so you must maintain a rational analysis. #BTC