The curly haired graduate of the Massachusetts Institute of Technology in just a few years turned his FTX platform into the world's second biggest crypto exchange, propelling him to become the tech world's latest out-of-the-blue billionaire.
Bankman-Fried's meteoric rise was only matched by his ignominious downfall, which saw him escorted last year by police from his luxury apartment in the Bahamas and extradited to face charges in the United States.
At the height of his celebrity, Bankman-Fried was thought to be worth $26 billion, with FTX becoming a near household name through a frenzied marketing campaign and celebrity endorsements by supermodel Gisele Bundchen, NBA star Stephen Curry and others.
The 31-year-old's empire began to crumble last November when revelations alleged that client money in the FTX platform was being funneled to prop up Alameda Research, the company's crypto-focused investment arm.
The rumors quickly snowballed and investors pulled their money from FTX, sinking it swiftly into bankruptcy and disgracing Bankman-Fried as a financial pariah on par with Bernie Madoff or Elizabeth Holmes.
Manhattan US Attorney Damian Williams has accused him of diverting funds from FTX clients, but also wire fraud, securities and commodities fraud, and money laundering.
Danielle Sassoon, an attorney for the prosecution, told a hearing that the number of victims of Sam Bankman-Fried's alleged actions could be "in excess of a million."
- Pointing fingers -
Charged with fraud and criminal conspiracy, SBF, as Bankman-Fried is known, was extradited at the end of December from the Bahamas, where FTX was headquartered, and released on a $250 million bail upon his arrival in New York.
Pending the trial, Bankman-Fried was placed under house arrest at the Silicon Valley home of his parents, both professors at Stanford University.
But US District Judge Lewis Kaplan rescinded that decision, ordering Bankman-Fried behind bars over alleged attempts of witness intimidation.
According to prosecutors, while holed up at his parent's home, Bankman-Fried passed on documents to the New York Times in an attempt to influence the testimony of Caroline Ellison, his ex-girlfriend and a former Alameda executive.
She has also been indicted in the case and has agreed to cooperate with the US authorities, along with three other former executives.
They are expected to take the stand in his six-week trial -- where Bankman-Fried will likely admit egregious management errors but no wrongdoing, and point the finger at Ellison.
"If the prosecutors can do a good job explaining that people invested money, the fact that it's crypto won't really make a difference," said Julia Jayne, a California lawyer specializing in white-collar crime.
A long blog post that Bankman-Fried had planned to publish on the social network X, published by the Times before he was taken into custody, offered clues to his defense strategy.
In it, he presents himself, as he has done in the past, as an overworked boss -- unable to rely on his incompetent or disinterested teams -- who let himself be overtaken by outside circumstances.
Sam Bankman-Fried, the fallen wunderkind of cryptocurrency
New York (AFP) Sept 29, 2023 -
He was the face of cryptocurrency, and a young one at that -- a media darling seemingly destined to unite the sector.
But Sam Bankman-Fried's stunning rise to prominence and wealth would be matched by his spectacular fall, and with it that of his platform FTX.
In the space of just a few months the Massachusetts Institute of Technology graduate with a degree in physics had taken a startup he founded in 2019 and built it up into the world's second largest crypto exchange platform.
He quickly became more than just a young entrepreneur, fashioning himself as an ambassador of crypto and making his first appearance in Congress in December 2021, testifying before lawmakers on the then-novel form of currency.
The public would come to know a seemingly oddball whiz kid with a mop of curly dark hair who, when not suited up for appearances on Capitol Hill, wore shorts and a T-shirt as his look de rigueur.
The young man known as SBF would charm US lawmakers with his straight talk and vision of crypto's future, including an extensive regulatory regime -- a position at odds with many in the sector.
- Worth $26 billion -
He devised project after project, from a platform for people to make donations in cryptocurrency to Ukraine to a market for financial derivative products that stepped on the toes of Wall Street.
Before it all came crashing down, at his peak this native Californian amassed a fortune estimated to be worth $26 billion. "Save for Mark Zuckerberg, no one in history has ever gotten so rich so young," read a headline in Forbes, which put Bankman-Fried on its cover in October 2021.
The son of two Stanford University professors, Bankman-Fried ventured outside the world of cryptocurrencies, making donations to US politicians and persuading celebrities like American football star Tom Brady or basketball player Stephen Curry to endorse FTX, for which they were richly rewarded.
CNBC has reported that Bankman-Fried even pursued a contract with singer Taylor Swift, though it fell through.
SBF is a vegan who said he believed in the concept of effective altruism -- finding the best way to help other people, in particular by donating all or part of one's wealth to charity rather than, say, volunteering at a soup kitchen.
When the cryptocurrency world lurched into crisis in the spring of 2022, Bankman-Fried billed himself as a savior, buying the troubled platform BlockFi, and shares in another company that was in trouble, Voyager.
- Compared to Warren Buffett -
"We take our duty seriously to protect the digital asset ecosystem and its customers," he tweeted at the time, as some people were comparing him -- barely 30 years old then -- to the legendary investing guru Warren Buffett.
But behind his reassurances, Bankman-Fried was walking a financial high wire and taking colossal risks, as revealed later in court documents.
Without their knowledge, Bankman-Fried's team is alleged to have used the money of FTX customers to cover risky operations by an affiliated trading company called Alameda Research, to buy posh real estate and to make political donations.
In November 2022, the crypto news outlet CoinDesk revealed that Alameda had converted a large part of its assets into FTT, a crypto token created by FTX. That news caused that currency to plummet.
Hours later Changpeng Zhao, the head of Binance, the world's largest crypto exchange platform, announced it was selling all the FTT tokens it held, causing it to lose 90 percent of its value in a matter of days and taking the Bankman-Fried empire with it.
His fortune having vanished overnight, Bankman-Fried was extradited from the Bahamas, where FTX had its headquarters. In December 2022 he was indicted on charges of fraud and racketeering.
He faces a seven-count indictment in a trial starting Tuesday in Manhattan.
"I'm broke and wearing an ankle monitor and one of the most hated people in the world," he wrote in a document published recently by The New York Times.
Days after the collapse of FTX, Bankman-Fried admitted that he "screwed up" but denied taking other people's money and blamed former colleagues for the huge mess, including some who will now testify against him during the trial.
"There will probably never be anything I can do to make my lifetime impact net-positive," he wrote.
The fallen whiz kid added: "The truth is that I did what I thought was right."
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