December 2021. Bitcoin just hit an all-time high of over $69,000. The specialist 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), head of Binance, FTX's major competitor. The three caught the attention of Forbes magazine, which named Kwon among Asia's 30 most important people under 30 and placed SBF and CZ in pride of place in its ranking of the world's richest.
These are days of wine and roses. The American runs his business with a group of friends from a villa in the Bahamas. Some media compare him to the famous investor Warren Buffett. And nothing too much: He is the second man in history with the largest fortune before the age of 30, namely $22.5 billion, behind only a certain Mark Zuckerberg. The Canadian CZ is not far behind. He is rising day by day and Forbes attributes him a sum of 65 billion dollars. Above the Spaniard 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 forcefully, promising a better life for those who invest their savings in the emerging universe of cryptocurrencies that is destined to take away the monetary monopoly from central banks. “The lunar cycle has just begun,” says Kwon transcendental, who worked for Apple and Microsoft after graduating from Stanford University (California), where, like CZ, he studied computer science.
A fan of video games, on some Sundays he shares with his millions of followers on X (then Twitter) photos of himself playing Starcraft, a futuristic adventure in which three races compete to gain control of the galaxy. Luna's revaluations bring mountains of money to those who bought her and enhance her reputation as a visionary genius. The world seems to be a friendly place and they are young innovators. SBF, son of two renowned law professors, has a degree in physics from the prestigious Massachusetts Institute of Technology (MIT), also escapes by playing Starcraft and League of Legends.
This means that the crypto aristocracy presents itself to the world with a certain nerdy aesthetic that is not at odds with the new digital ecosystem of Silicon Valley and the addiction to screens. Their goal is ambitious because their raw material is in demand: money, which they want to drive 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 of 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 inevitable in any business that involves quick profits, Wall Street enters the plan: the American platform Coinbase begins trading and makes investing in cryptocurrencies accessible to stock market regulars.
The rise of cryptocurrencies has a recovery effect. An army of critics, joined by numerous Nobel Prize winners, central bankers and economists. And amid growing regulatory hurdles, intensive lobbying begins. CZ can be seen on a frenetic tour with ministers and heads of state from all over the world. He is photographed with Frenchman Emmanuel Macron – to whom he promises to set up his European headquarters in Paris in exchange for friendly regulation. And of course with the Salvadoran Nayib Bukele, who is convinced that he can transform the Central American nation into a global cryptocurrency power.
Meanwhile, SBF quickly dips into its checkbook to hire sports stars, sponsor NBA stadiums and advertise during the very expensive SuperBowl commercial break. And he is trying to expand his influence by pouring money into then-Democratic nominee Joe Biden's campaign, becoming his second-largest donor at $5.2 million, behind only former New York Mayor Michael Bloomberg's $56 million . Winning over politicians becomes a priority.
Until something goes wrong.
December 2023. Bitcoin is worth a third less than it was at its best, although it appears to be recovering from a dark period of price decline full of bad news. The so-called crypto winter. The speed at which the industry changes course also applies to its managers. None of the members of the promising triumvirate are yet on the front lines to see it. Do Kwon has been in police custody in Montenegro for eight months after he was arrested at the airport there in a desperate attempt to prolong his escape. And the judiciary has just approved his extradition, although no one knows exactly where. He is accused by both his country of origin, South Korea, and the United States of defrauding $40,000 million and ruining the millions of investors who bought Luna, and in May 2022 he saw his value drop to zero in a matter of days .
Sam Bankman-Fried, on March 30, upon his arrival at the Federal Court in New York.Peter Foley (EFE)
FTX went bankrupt a year ago. And there were those who were responsible and those who were 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 statements of his team and the auditor tasked with restructuring the company to recover as much as possible speak of the fact that the platform does not have the appropriate books and records or security controls. And software was used to hide the misuse of customer funds used to purchase homes and personal items.
In the examiner's words, it all came down to “a very small group of people with no experience or preparation.” An ocean liner that was too large for them fell into their hands and sank. Users have not received their money back and SBF is awaiting the outcome of the trial at the Metropolitan Detention Center in New York, where it shares space with other high-profile detainees such as former Honduran President Juan Orlando Hernández, who is accused of cocaine trafficking . There, in prison, the currency is different. According to the Wall Street Journal, Bankman-Fried paid for a haircut with cans of mackerel.
Changpeng Zhao, former CEO of Binance, the world's largest cryptocurrency exchange, leaves the courthouse in Seattle on November 21. David Ryder (Getty Images)
The best stopper of the three (so far) is Changpeng Zhao. Especially because he is still free. Last month, the American judiciary forced him to resign from his position as CEO of Binance, and in an agreement with the Justice Department, he agreed to pay a $50 million fine after pleading guilty to violating money laundering laws in the United States In the USA, too, Binance has to dig deep into its pockets and pay around 4 billion euros, but the sanction does not endanger the survival of the company, the absolute world market leader in crypto transactions, for which it charges lucrative commissions in return.
Zhao, a leader in the crypto community with 8.7 million followers on X, will even be able to retain shareholder control of the company. His punishment, therefore, is to lose the leadership power that led him to constantly collaborate with political and business leaders. He himself says he is surprised by the abrupt change in his life. “The first thing I'm going to 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 exit.
Their one-time rivals Do Kwon and Sam Bankman-Fried, stripped of their wealth 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 they should do to fill their activities agenda that has been colored white.
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