As the embattled former CEO of collapsed FTX cryptocurrency exchange Sam Bankman-Fried attempts to raise capital to rescue the platform, the move has received mixed reactions amid fears the funds could be misappropriated. Following the collapse of FTX, Bankman-Fried has come under the spotlight for allegedly mismanaging customer funds.
In this case, Billy Markus, the founder of meme cryptocurrency Dogecoin (DOGE), has warned that raising money to rescue FTX will give room for Bankman-Fried to ‘commit enormous fraud again,’ he said in a tweet on November 16.
Markus was responding to a tweet by Bankman-Fried over his plan to raise liquidity and restart normal operations.
“I don’t know about you guys, but I don’t think we should give people who commit enormous, massive fraud a second chance to commit enormous, massive fraud again. The jig is up. Everyone knows what you really are,” he said.
Plans to rescue FTX
FTX crisis escalated after facing a liquidity crunch, with the exchange resorting to filing for bankruptcy. In the meantime, Bankman-Fried is reportedly reaching out to potential investors to raise $8 billion to facilitate liquidity.
Besides Markus, several high-profile individuals have shared their impression of Bankman-Fried, with Tesla (NASDAQ: TSLA) CEO Elon Musk stating his initial interaction with the founder resulted in his ‘bullshit meter redlining.’
Elsewhere, as reported by Finbold, Robert Kiyosaki, author of the personal finance book “Rich Dad, Poor Dad,” referred to Bankman-Fried as “the Bernie Madoff of crypto.”
FTX’s bankruptcy filing highlighted the extent of the fallout with the platform, noting that as many as one million creditors might have been affected.
Indeed, Bankman-Fried’s involvement in the crisis came to light after financial records indicated that his other company Alameda Research made risky bets funded by client assets from FTX. At the same time, the company’s financial details showed it heavily relied on FTX’s native token, FTT.
Furthermore, a significant share of the customer funds was frozen, with the situation being complicated after up to $477 million worth of crypto stored on the exchange was allegedly stolen in a hack impacting FTX’s operational wallets.
