With the trial of disgraced FTX founder Sam Bankman-Fried set to begin next week, “SBF” could join the ranks of notorious hucksters Charles Ponzi and Bernie Madoff if convicted. But neither the Ponzi scheme nor Madoff operated on such a large scale.
The cryptocurrency exchange Bankman-Fried co-founded in 2019 was worth as much as $32 billion at its peak, and his personal net worth was once estimated at $16 billion before everything collapsed. These staggering figures make his upcoming trial one of the most closely watched in the history of financial crimes. (He still maintains his innocence.)
But how did this illustrious, once-acclaimed prodigy find himself in front of a jury of his peers? It all started at Stanford University.
how it started
1992: Sam Bankman-Freed was born on the campus of Stanford University in Santa Clara County, California. His parents, Joseph Bankman and Barbara Fried, are both professors at Stanford Law School. His father, Bankman, is a clinical psychologist and attorney specializing in tax law.His mother, Fried, focused on the intersection of law, economics and philosophy, according to her resume Stanford University School of Law website.
2010-2014： Bankman-Fried Studied at MITafter 2010 toss a coin Deciding between it and Caltech. He majored in physics and minored in mathematics in college. Despite his natural intelligence, SBF was not interested in his classes and instead hung out with friends in the Epsilon Theta fraternity, which at one time included several future FTX employees, including co-founder Gary Wang. SBF reportedly hosts all-night games where he enjoys solving puzzles within a limited time limit.
Year 2014: Shortly after graduating, SBF found a job with the company. Wall Street quant firm Jane Street, where he completed his internship. SBF was reportedly interested in the company because of his friends in the effective altruism movement, which advocates helping the most people in the most effective way. Several Jane Street employees later joined FTX, including future CEO of SBF cryptocurrency trading firm Alameda Research, Caroline Ellison, and future president of FTX US, Brett Harrison. The company focused on arbitrage, or taking advantage of subtle price differences in the market, which would become Alameda’s bread and butter.
2017: SBF contacted Wang to help create cryptocurrency trading company Alameda Research while he was working as a software engineer at Google.The company’s original $55 million under management According to the agency, the funds came from loans from employees as well as wealthy cryptocurrency investors New York Times.
2019: FTX part established Thanks to Alameda Research Center. While Alameda still uses its arbitrage strategies in the broader crypto market, competition has increased and SBF sees FTX as a way to bring in revenue to fund Alameda’s trading. The exchange and its founders moved to the Bahamas from Hong Kong, where Alameda is headquartered. The company soon created its own cryptocurrency, FTT, which generated revenue for FTX, but Alameda held a large stake and had significant influence. SBF and his staff (including the King) live in a luxury apartment complex in Nassau called “Albany.” The $40 million oceanfront penthouse serves as FTX’s base of operations. Employees live and work together.
2022: The hype continues for FTX. Its now-infamous Larry David Super Bowl ad aired in February, kicking off its sports involvement. In April, FTX signed a 19-year contract with Miami-Dade County worth $135 million to put its name on the home of the Miami Heat. The company in June struck a deal with Major League Baseball that would allow umpires to wear the company’s logo on their uniforms. In September, the company partnered with Formula 1 team Mercedes.
how are things
November 2, 2022: A CoinDesk report Revealing the ties between FTX and Alameda Research are closer than publicly disclosed. CoinDesk reported that Alameda’s largest asset is FTT, a cryptocurrency issued by its sister company, raising concerns about its viability.
November 6, 2022: In response to CoinDesk’s report, Binance CEO Changpeng Zhao “CZ” said that he will sell off all FTT assets held by his exchange, worth $580 million. “We were supportive before, but after the divorce we will no longer pretend to have sex…” CZ wrote in the post. a tweet then.
November 8, 2022: CZ and Binance signed a letter of intent to purchase FTX, and SBF claimed in a tweet that customer funds will be protected as part of the deal. FTX’s FTT token price rises rapidly Plunged 80%.
November 9, 2022: this wall street journal Zhao and Binance have reportedly abandoned their deal to acquire FTX, with the company saying in a statement that “the issues are beyond our control or ability to help.” The company is left with $6 billion on its balance sheet gap.SBF reportedly approached Binance before be rejected Seeking more money from Silicon Valley and Wall Street billionaires refuse help Offered by rival cryptocurrency exchanges like Coinbase and OKX. Reuters reports The U.S. Securities and Exchange Commission has been investigating FTX’s handling of customer funds for months.
November 10, 2022: Bahamas Regulatory Authority Freeze FTX assets, said it was aware that certain assets may have been “mishandled, mismanaged and/or transferred to Alameda Research.”California Department of Financial Protection and Innovation is the first Announce Investigation into FTX.
November 11, 2022: FTX, Alameda, FTX US and other related entities filed for Chapter 11 bankruptcy on November 11, and SBF resigned as CEO. He was replaced by John J. Ray III, an experienced restructuring attorney who had overseen the liquidation of bankrupt energy company Enron. SBF expressed regret in a statement on Twitter: “Once again I am very sorry that we have ended up in this situation. Hopefully things can find a way to recover.”
November 12, 2022: this wall street journal Executives at FTX and Alameda were reportedly aware that FTX had loaned client funds to the trading firm to help cover bad investments. Alameda CEO Caroline Ellison reportedly said in a video conference that she and SBF and FTX executives Nishad Singh and Gary Wang were aware of the hybrid fund’s decision.
November 16, 2022: Lawmakers call on SBF to testify before Congress.House Financial Services Committee Chair Maxine Waters (D-Calif.) a statement At the time, “FTX’s collapse caused huge harm to over 1 million users, many of whom were ordinary people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it collapse within seconds. All gone.”
November 30, 2022: Bankman-Fried delivered a virtual speech at the meeting New York TimesDealBook Summit and claimed partial responsibility for the collapse of FTX. He insists that his statements to FTX are true and that although his lawyers have not allowed him to be interviewed, he has a “…responsibility to talk and explain what happened.” He claimed he never attempted to commit fraud.
December 9, 2022: SBF says Posts on X, the former Twitter official said he will testify before the House Financial Services Committee on December 13, although he said, “…I’m limited in what I can say, and I’m not going to be as helpful as I used to be.” I love that. “
December 12, 2022: He was arrested in the Bahamas the day before SBF was set to testify before House members.FTX co-founder reportedly charged with wire fraud and conspiracy indictment From the United States Attorney for the Southern District of New York. On the same day, the SEC charged Bankman-Fried with defrauding investors in FTX Trading Ltd.
December 21, 2023: SBF extradited to U.S. from Bahamas, U.S. Attorney for the Southern District of New York It was announced that Allison and Wang had pleaded guilty.
December 22, 2023: A New York judge granted $250 million bail to SBF, who was free thanks in part to the home his parents built in Palo Alto as collateral.
January 3, 2023: SBF pleaded not guilty in a New York court.
February 14, 2023: Judge responsible for SBF cases Order him to stop using VPN He reportedly used a VPN to mask his web browsing after he used it to watch the Super Bowl.
August 11, 2023: Bankman-Fried sent to New York prison A federal judge revoked his bail. The 31-year-old has been under house arrest at his parents’ home in Palo Alto but has been charged by prosecutors with witness tampering.
August 22, 2023: Lawyers for SBF claimed in court documents that the prison where he is being held, the Metropolitan Detention Center in Brooklyn, is overcrowded. Adjusting to his vegan diet Or get him his Adderall prescription. “He’s literally surviving on bread and water right now, that’s the only thing he can eat, and sometimes peanut butter,” attorney Mark Cohen said.
September 12, 2023: Bankman-Fried was denied early release ahead of his trial in early October. The federal judge overseeing the case argued that SBF should remain in custody because he had more than seven months to prepare and had “widespread access” to electronic materials related to his case.
Svlook
