Sam Bankman-Fried: The Boy King of a Bankrupt Empire

The poster boy of crypto turned out to be its biggest fraud.

Sam Bankman-Fried, founder of FTX

Sam Bankman-Fried played the part perfectly. Messy hair. Cargo shorts. A vegan who slept on beanbags and talked about "effective altruism." The media ate it up. Forbes put him on the cover. Congress invited him to testify as an expert. He donated millions to politicians on both sides of the aisle.

Behind the image, SBF was running what prosecutors called one of the largest financial frauds in American history. His trading firm, Alameda Research, had a secret backdoor into FTX that let it borrow billions in customer deposits. That money went toward risky bets, luxury real estate in the Bahamas, political donations, and venture investments that never panned out.

The scheme unraveled on November 2, 2022, when CoinDesk published a leaked balance sheet showing that Alameda's assets were almost entirely made up of FTT, a token FTX had created itself. Binance CEO Changpeng Zhao announced he was dumping Binance's FTT holdings. The run on FTX started immediately.

Within five days, FTX went from a $32 billion company to a bankruptcy filing. Eight billion dollars in customer funds were simply gone. SBF tweeted "FTX is fine. Assets are fine." on November 8. The exchange collapsed on November 11.

He was arrested in the Bahamas on December 12 and extradited to New York. His inner circle flipped on him immediately. Caroline Ellison, his ex-girlfriend and Alameda CEO, testified against him in excruciating detail. Gary Wang, FTX co-founder, described building the secret backdoor at SBF's direction.

The jury took less than five hours to convict him on all seven counts. In March 2024, he was sentenced to 25 years in federal prison. He's been filing appeals and asking for a new trial. So far, no luck.