A rather crazy show. While his platform has gone bankrupt, and several investigations have been opened against him, Sam Bankman-Fried, alias "SBF", is making the rounds of the media, radio, TV, press... Almost as if nothing had happened.

The objective? To explain the lightning fall of his empire and what will probably remain as one of the biggest frauds in history.

If some interviews have turned out to be farcical, especially because the journalists are not familiar with the subject, others like the one our friends from "The Block" have just done allow us to understand a little more about what may have happened with FTX and Alameda Research.

Small precision: we also asked SBF for an interview (we had it in October before the collapse) because many Europeans were customers of FTX International (not US), but the 30 year old American did not, for the moment, give an answer.

In the meantime, we take stock of what we know about the case, what we don't know yet, and what we'll probably never know. 😐

👉 What we know

Where to start? 😅

Let's already take the losses and the number of "victims".

According to FTX's internal documents, more than a million customers, both individuals and professionals, lost money in the case. "FTX US customers will get their money back," SBF tried to explain to the media.

But the truth is that they will recover little or nothing, especially those who are customers of FTX International. And for good reason: the amount of losses exceeds 8 billion dollars, not counting the loans and other payment facilities granted to the company...

In total, the bill could rise to an unprecedented $50 billion.

We also know a lot more about the spiral FTX got into: it all started in 2017, with SBF creating the Alameda Research fund.

At the time, the 25-year-old American was arbitrageur, buying bitcoins in the U.S. and selling them at a slightly higher price in Asia (Japan and South Korea).

Thanks to this activity, the one who is not yet nicknamed "SBF" is already earning a small fortune - several tens of millions of dollars 🤑 - which gives him ambitions and the idea to create his own trading platform. It's 2019, just before the Covid, and it's the birth of... FTX.

Over the first few months, Alameda Research will act as a liquidity provider to FTX, allowing it to increase its clients' activity (FTX allows them to trade more) and therefore the amount of its commissions.

So far so good.

Alameda Research could have remained a cash provider for FTX, except that the trading company will be investing more and more in the ecosystem and projects like Solana and others (we talked about it in the Premium Edition).

Except that some bets will prove disastrous. Even as the markets rise through November 2021, Alameda Research, which has invested in 500 projects and companies for over $5 billion, will manage to lose money in 2021. Just over $1 billion!

To stay afloat, Alameda is going to draw on the deposits of FTX customers. First a few million, then a few hundred million dollars, in total illegality, and under the noses of the largest investors on the planet such as Sequoia Capital or SoftBank, who have invested hundreds of millions of dollars in the capital of the company valued until a few months ago at 32 billion dollars.

When asked several times about the matter, SBF initially denied it. "FTX deposits were not used by Alameda," the American explained in early December on the Good Morning America show (find the video clip here on Twitter). This is also what he told us at the end of October when we asked him the question.

When asked again about the subject by the Financial Times two days ago, SBF's view changed somewhat: "We have to look at what happened," explained the American.

👉 What we don't know yet

Among the questions that remain unanswered is, of course, that of the responsibility of SBF, who is still based in the Bahamas, where he is under surveillance by the authorities. In the event of a trial in the United States, he could face decades or more in prison.

Was he aware of everything that was going on between Alameda Research and FTX?

In several interviews, the American said no, even though he was the decision maker for everything and was, above all, in a relationship - at least for six months - with the head of Alameda Research, Caroline Ellison.

It was also learned that the two companies shared the same office and that employees of one company could access the screens of the other. According to several former FTX employees quoted by the New York Times, SBF knew everything that was going on at both companies.

The FTX affair also raises a political issue, as the former billionaire was very generous with American politicians. For the Midterms campaign alone, SBF gave several tens of millions of dollars, mostly to Democrats. It was one of his main associates who gave a lot to... Republicans 👀.

Is this why SBF has been so prominently featured by elected officials in Congress? It's hard to know. In any case, he was the one who advised them on the crypto legislation... In a tweet, the Democratic head of the House Finance Committee, Maxine Waters, asked SBF to come and testify at a session about FTX (it's on December 13, more on that below).

The American explained that he wasn't sure if he would be available 🙃.

👉 What we'll probably never know

Did SBF prepare the move from the start?

This is what some argue, explaining that FTX was designed as a pump to power Alameda Research.

Unless we find tangible elements, it seems very complicated to prove such a hypothesis. But as the case has shown since the beginning, nothing is impossible (unfortunately) and the next few weeks could still hold some nice surprises...