Sam Bankman-Fried: The $8 Billion Fraud

Crypto's golden boy stole billions in customer funds. Got 25 years. Played League of Legends through it all.

Sam Bankman-Fried - SBF - was crypto's most successful con man because he didn't look like one. The MIT physics grad with the messy hair, cargo shorts, and beanbag-chair office convinced the world he was a genius altruist who just happened to run a crypto exchange. He was on magazine covers. He met with regulators. He donated millions to politicians. He testified before Congress about the need for responsible crypto regulation.

Behind the scenes, FTX was funneling billions in customer deposits to Alameda Research, SBF's personal trading firm. Alameda used customer money for risky bets, venture investments, political donations, and Bahamas real estate. The relationship between FTX and Alameda was crypto's worst-kept secret - and its biggest open fraud.

In November 2022, a CoinDesk article revealed that Alameda's balance sheet was overwhelmingly composed of FTT - FTX's own token. Binance CEO CZ tweeted that he was selling Binance's FTT holdings. The bank run started. Within 72 hours, FTX was insolvent. $8 billion in customer funds were gone.

SBF was arrested in the Bahamas in December 2022. His trial in October 2023 lasted four weeks. His inner circle - Caroline Ellison, Gary Wang, Nishad Singh - all testified against him. The jury convicted him on all seven counts in under five hours.

In March 2024, SBF was sentenced to 25 years in federal prison. He was 32 years old. The sentencing judge noted that SBF had shown no genuine remorse and appeared to view the entire situation as a public relations problem to be managed rather than a crime he'd committed.