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How to be a scam artist? Twitter afloat with rumour of a Sam Bankman-Fried trading MasterClass

By Daniela Ešnerová

13:02, 18 November 2022

Sam Bankman-Fried (SBF)
Community members offered money for a leaked video of the rumoured MasterClass – Photo: ShutterStock

Crypto Twitter is on the hunt for a rumoured video, in which Sam-Bankman Fried, the disgraced founder of defunct cryptocurrency exchange FTX, teaches trading.

With attention remaining on the spectacular collapse of FTX a week after the company filed for bankruptcy, all kinds of rumours about the firm and its former boss – known in crypto circles as SBF – circulate online.

One such unconfirmed speculation, which first appeared on a ‘crypto citizen journalism’ Twitter account, Autism Capital, claimed that SBF is featured in a masterclass on trading. “SBF did a masterclass on trading that was set to be released in December. It was already filmed,” the account tweeted.

The rumour gathered great interest, with YouTuber offering $500 for a leaked video of the masterclass. “If anyone at [the] masterclass leaks me the footage of SBF’s class on trading, I will pay you $500 LMFAO,” Coffeezilla reacted.

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Changing fortune

Once upon a time – just earlier this month, in fact – SBF, the 30-year-old entrepreneur who founded FTX in May 2019 and saw the company valued at $32bn in January 2022, was held in high regard in the industry.

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In light of the new events, a masterclass by SBF, whose firms FTX and affiliated trading company Alameda saw billions vanish from their balance sheets, a trading masterclass from the SBF would likely not be well received by many.

FTX is now undergoing bankruptcy and SBF resigned a week ago when FTX filed for bankruptcy. Its new chief executive and restructuring officer John Ray spoke of the dire state of the company’s financials.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” observed the elite bankruptcy lawyer, who oversaw the winding up of energy trading company Enron and has 40 years of experience.

“From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.” 

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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