FTX is a cryptocurrency exchange that was founded in 2019 by Sam Bankman-Fried, a former quantitative trader at Jane Street and Susquehanna International Group. The exchange quickly gained popularity due to its wide range of products and services, including leveraged tokens, futures contracts, and OTC trading.
However, in late 2022, it was revealed that Bankman-Fried, also known as SBF, had committed fraud while running the exchange. An investigation by the U.S. Securities and Exchange Commission (SEC) found that SBF had misled investors and manipulated markets in order to profit from their trades.
SBF's fraudulent activities included using customer funds to trade for his own personal gain, and making false statements to investors about the financial health and performance of the exchange. As a result of these actions, many investors lost significant amounts of money and the exchange's reputation was severely damaged.
In response to the revelations, the SEC filed charges against SBF and the exchange was forced to pay millions of dollars in fines and restitution to affected investors. SBF was also banned from serving as an officer or director of a public company for a period of ten years.
Despite the scandal, FTX continued to operate SBF appeared before the House Financial Services Committee chaired by Maxine Waters is an American politician who has served as the U.S. Representative for California's 43rd congressional district since 1991. She is a member of the Democratic Party and a vocal advocate for progressive policies, particularly on issues related to financial regulation and consumer protection.
Waters was born in St. Louis, Missouri in 1938. She moved to Los Angeles as a child and attended California State University, where she earned a bachelor's degree in sociology. After graduation, she worked as a teacher and a volunteer coordinator for the Head Start program.
In 1976, Waters was elected to the California State Assembly, where she served for 14 years. In 1990, she was elected to the U.S. House of Representatives, becoming the first African American woman to represent California in Congress.
Throughout her career in Congress, Waters has been a leading voice on issues such as affordable housing, consumer protection, and banking reform. She has been a strong critic of Wall Street and has advocated for stricter regulations on the financial industry.
In addition to her work in Congress, Waters has also been active in the Congressional Black Caucus and the Congressional Progressive Caucus. She currently serves as the chair of the House Financial Services Committee, a position she has held since 2018.
There have been several instances of large-scale fraud in the cryptocurrency industry. Here are a few examples of some of the largest crypto frauds in history:
- OneCoin: OneCoin was a cryptocurrency Ponzi scheme that claimed to offer high returns to investors through the mining of a supposedly valuable cryptocurrency. In reality, there was no actual mining taking place and the company was simply using new investors' funds to pay off old investors, in the classic Ponzi scheme fashion. The scheme was eventually exposed and the company's leaders were arrested and charged with fraud.
- Bitconnect: Bitconnect was a cryptocurrency investment platform that promised investors returns of up to 40% per month through a "trading bot" that allegedly used artificial intelligence to make profitable trades. However, the bot was actually just a front for a Ponzi scheme, and when the scheme collapsed, investors lost an estimated $2.5 billion.
- PlusToken: PlusToken was a cryptocurrency wallet service that promised investors high returns through a complex trading strategy. In reality, the company was just using new investor funds to pay off old investors, and when the scheme eventually collapsed, investors lost an estimated $2 billion.
- QuadrigaCX: QuadrigaCX was a Canadian cryptocurrency exchange that claimed to hold its customers' funds in cold storage to keep them safe from hacking. However, when the exchange's founder died unexpectedly, it was revealed that he was the only person with access to the cold storage wallets and the funds were lost forever. The exchange declared bankruptcy and customers lost an estimated $190 million.
These are just a few examples of large-scale crypto frauds, but they illustrate the risks that investors face when dealing with cryptocurrency. It is important to always conduct thorough research and due diligence before investing in any cryptocurrency-related venture.
Now you can add FTX and SBF to that list with over $32 Billion gone.