The Damage That Sam Bankman-Fried Did Was Immeasurable, According To Ava Labs CEO
The name ‘FTX’ still chills the investors in the crypto space following its drastic collapse. Emin Gün Sirer, co-founder and CEO of Ava Labs, said that the damage FTX’s founder Sam Bankman-Fried did to the crypto industry was “immeasurable.”
The crash of the FTX exchange is one of the disastrous events that occurred around the crypto space. Just before the collision, FTX was the second largest crypto exchange in the world, following Binance.
Millions of investors had their funds in the exchanges’ wallets. Most of them also held FTT, the native token of the FTX exchange. Within a few days in November 2022, almost all of their investments were parked in FTX exchanges, and as FTT token went down the drain.
Who Is Emin Gün Sirer?
Emin Gün Sirer is a computer scientist who is famous for the development of the Avalanche Consensus protocol. This protocol is the underlying system for the Avalanche blockchain platform. In addition, Sirer also developed AVAX, the native crypto token of the Avalanche ecosystem.
AVAX is the 16th largest crypto with a market cap of over $5.85 billion. Moreover, AVAX has an average daily trading volume close to $156 billion and is traded on the most popular crypto exchanges worldwide.
Emin Gün Sirer And His Statements Against Sam Bankman-Fried
Emin Gün Sirer said that the series of fraudulent activities conducted by Bankman-Fried made the crypto industry look like a ‘black eye.’ Moreover, as a nascent industry, the reputation was also bruised following the FTX incident.
Moreover, Sirer also said that the people’s trust and legitimacy were also affected. He also added that the total damage caused by Sam’s actions is “immeasurable.”
Sirer was invited to participate in a podcast by Decrypt on 25th February 2023. The episode published on Spotify lasted about 40 minutes, in which he expressed his experience in avoiding the FTX crisis. In addition, this podcast also discussed the impact that happened to the crypto space after the FTX incident.
During the discussion, Sirer also mentioned that Bankman-Fried took over the goodwill he and others created with his ‘boy genius act.’ Sirer also said he had witnessed the digital asset industry change from ‘nothing’ to today’s level.
His career started as a computer science professor at Cornell University. During his career, he used to educate blockchain technology by hosting workshops and briefing politicians.
Apart from that, Sirer said that Bankman-Fried cultivated an image of an ‘unquestionable genius’ and spent much money in marketing himself. Sirer mentioned that the FTX collapse has resulted in the collapse of dozens of crypto-based companies. Moreover, he believes these unfortunate incidents will result in a “constructive dialogue” with the regulators.
In addition, he said that the lawmakers should distinguish the failure of FTX as a failure of a ‘centralized entity’ and not as the failure of the crypto in any shape or form. Sirer also mentioned that many crypto retail investors got harmed following the FTX issue. Moreover, he added that if this had happened after a couple of years, the impact would have been “far worse.”
Sirer also clarified that his Ava Labs has never invested in FTT tokens. He also mentioned that the price of Solana and FTT tokens was inflated and caused disgrace to the crypto industry. Finally, Sirer ended the FTX conversation by thanking their lucky stars.
What Happened To The FTX Exchange?
All events started after a news article published by CoinDesk on 2nd November 2022. According to the article, the quantitative trading firm run by Bankman-Fried called Alameda Research held a considerable position worth $5 billion in FTT tokens. Following the news, the Binance exchange sold all its FTT tokens on 6th November 2022.
Following the selling of FTT tokens by Binance, all other traders and investors started selling their FTT tokens leading to the fall of the token’s price to almost zero. At first, Binance showed interest in buying FTX’s business outside the U.S. However, later they backed out of this deal which eventually led to the overall collapse of FTX.
On 11th November 2022, Bankman-Fried was replaced by a court-appointed CEO. Besides, FTX filed for bankruptcy protection. Bankman-Fried was arrested on 12th December by Bahamian authorities and was then extradited to the U.S. However, based on a federal judge’s decision, Bankman-Fried was released on 22nd December on a $250 million bond.
At the time of writing, Bankman-Fried was charged with four new counts based on unlawful political contribution during the 2022 U.S. midterm elections. He has been accused of flooding millions of U.S. dollars to Republicans and Democrats.
The FTX crash will always remain a substantial black mark in the crypto industry’s history. Ava Lab’s founder, Emin Gün Sirer’s words against Sam Bankman-Fried, indicates the negative impact faced by the crypto space following the crash.
However, Sirer finds himself fortunate not to invest in FTT tokens. Moreover, he believes things would have been worse if the FTX event had happened after a few more years.