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Sam Bankman-Fried faces criminal charges and is expected to appear in court on January 3.
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The dramatic arrest of the founder of FTX in the Bahamas followed a strange media tour and damning court documents.
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Here’s a guide to everything that’s happened in the FTX saga so far.
In just a few years since founding cryptocurrency exchange FTX in 2019, Sam Bankman-Fried has built a respectable audience among US political and financial institutions.
Then everything collapsed.
The 30-year-old, often dressed as if he had just come from a squash game, was once seen alongside the likes of cryptocurrency billionaire Bill Clinton and the Davos elite, heralding the future of cryptocurrency.
FTX was a new type of exchange that promised traders a safe and efficient way to transact around various cryptocurrencies. This vision and customer growth helped the company quickly grow to a staggering $32 billion valuation, attracting investments from top VCs like Sequoia Capital, Tiger Global, and SoftBank. According to Bloomberg, Bankman-Fried’s personal fortune was once estimated at around $20 billion.
As nearly $8 billion in client funds disappeared, financial regulators argued that what was happening at FTX was not a novel and sophisticated financial engineering, but a simple and bold fraud scheme as well as outright mismanagement.
According to the US Securities and Exchange Commission, Bankman-Fried, with the bold support of his lieutenants, sent FTX client funds to another company, Alameda Research, where he used them for risky investments and also served as a “personal piggy bank.” .
Federal prosecutors in Manhattan revealed that Bankman-Fried was cooperating with his ex-girlfriend and former Alameda CEO Caroline Ellison and former FTX co-founder Gary Wang. All three have been charged with fraud and conspiracy.
Bankman-Fried’s project was also to develop a sense of legitimacy and ethics around the theoretically lucrative and practically unregulated scheme that is cryptocurrency. He was the rare CEO in an industry that actively engaged in regulation among the mainstays of the shadow economy, where lack of oversight was central to his appeal.
He established himself as a generous donor, mostly to Democratic candidates. Celebrities like Larry David and Gisele Bündchen have caused hype with ads, including the now-embarrassing Superbowl ad that has become the subject of an ongoing lawsuit by investors.
The fall of Bankman-Fried and the implosion of FTX happened so quickly that you may have missed some of the most eyebrow-raising details of the saga. We’ve put them all together so you can get a glimpse of some of the key figures in the story of the FTX’s downfall, dizzying investigations and litany of accusations to date:
Sam Bankman-Fried
Bankman-Fried, an MIT physics graduate who sleeps in beanbag chairs in the FTX office, plays video games in pitch meetings, and whose work uniform consists of sneakers paired with white calf-length socks and dry-cleaning T-shirts, Bankman-Fried projected an unusual aesthetic that defined a new breed of tech billionaire.
He also promoted the image of a demanding and all-consuming work environment at his company, even claiming towards the end that his problem was working only 13 hours a day instead of the normal 18 hours.
His venture in the Bahamas further drew attention to the people running it and their relationships with each other, with Coindesk reporting that there was a “gang of kids” behind the venture.
In the weeks before his arrest, he made several media tours to explain his version of events, admitting that his company lacked the internal controls that investors had believed – confusing observers and perhaps his own lawyers at the time. did
He was even scheduled to testify before the House of Representatives, but was arrested in the Bahamas the night before the hearing.
Read Insider’s coverage of Bankman-Fried:
FTX founder Sam Bankman-Fried multitasks on 4 hours of sleep and 6 screens. Insiders share what the 29-year-old crypto-billionaire is really like and the tough questions facing his company.
Mr. Crypto goes to Washington
The rise and fall of FTX’s Sam Bankman-Fried, who went from being a cryptocurrency billionaire to being arrested and charged with fraud
Sam Bankman-Fried’s FTX saga keeps getting weirder as new details shed more light on how much his companies’ finances overlapped.
Joseph Bankman and Barbara Fried
Barbara Fried and Joseph Bankman, both Stanford Law Professors, whose Palo Alto home is both shelter for their son, who is currently on $250 million bail, and security for the amount they don’t actually have to pay. This means that if he escapes, they could lose the house and potentially be on the hook for a portion of that multi-million dollar sum.
Regulators also allege that her parents may have benefited from the scheme, although they have not been named as defendants. “Bankman-Fried also used Alameda’s combined funds to make large political donations and purchase tens of millions of dollars in Bahamian real estate for himself, his parents and other FTX executives,” the SEC complaint said.
Read Insider’s coverage of Bankman-Fried’s parents:
Sam Bankman-Fried’s law professor parents stayed with their son after the FTX collapse. Here’s what we know about them.
Sam Bankman-Fried’s parents are reportedly in the Bahamas with him, and his father has pushed back the Stanford law class he’ll be teaching next quarter.
Sam Bankman-Fried’s parents attended his hearing in the Bahamas and his mother laughed at the proceedings.
Sam Bankman-Fried’s mother is pictured arriving at his bail hearing in New York
Caroline Ellison
The daughter of MIT professors, Ellison was known as a mathematical genius from a young age and met Bankman-Fried at the Jane Street trading company. Bankman-Fried said they met once.
Now facing seven felony charges, Ellison pleaded guilty and expressed remorse before the New York federal court that presided over the Bankman-Fried criminal cases. As head of Alameda, Ellison allegedly helped the company borrow “billions of dollars” using FTX’s illusory FTT token as leverage, the SEC alleged.
Read Insider’s Caroline Ellison’s coverage:
Caroline Ellison is a math whiz, trader and the shadowy figure behind the FTX collapse – here’s how a devout Harry Potter fan came to be a part of cryptocurrency’s biggest explosion.
Caroline Ellison said she was “exposed to a lot of economics”. Here’s everything we know about his MIT economist parents.
Sam Bankman-Fried is in jail, but legitimate viewers are wondering: Where is ex-girlfriend Caroline Ellison?
“I knew it was wrong,” Caroline Ellison reportedly told the court. What could be next for the one-time cryptocurrency boss and SBF ex-boyfriend?
Gary Wang
Regulators also accused Wang, who pleaded guilty to criminal charges, of facilitating a scheme that funneled FTX funds to Alameda. They alleged that he helped create the code that created the channel to siphon off FTX funds, and that he took $200,000 in company money “for his own purposes.”
Read Insider’s coverage of Gary Wang:
Gary Wang, the mysterious co-founder of FTX, has pleaded guilty to fraud charges. Here’s what we know about the main player in the failed crypto empire.
John J. Ray III
John J. Ray III had choice words about FTX when he took over as CEO to manage the surprise bankruptcy filing in November. A restructuring specialist known for helping bankrupt firms such as Enron repay creditors told a Delaware bankruptcy court that there was an unprecedented “total failure of corporate control” at FTX.
Read Insider’s coverage of John Ray:
The future of FTX and Sam Bankman-Fried is now in the hands of these 2 lawyers who worked for Enron and Michael Milken.
FTX’s new CEO John Ray is making $1,300 an hour to clean up Sam Bankman-Fried’s collapsed crypto empire.
Read the explosive bankruptcy filing that FTX’s new CEO called Sam Bankman-Fried
FTX’s new CEO has blamed the collapsed cryptocurrency exchange for “old school” embezzlement that is “not at all sophisticated”.
What’s going on
FTX filed for Chapter 11 reorganization in Delaware in November after fellow cryptocurrency exchange Binance backed out of a plan to potentially take it over. The documents set in motion a series of events that led to Bankman-Fried’s dramatic arrest in the Bahamas.
As US investigators moved in, FTX’s current CEO Ray described a company with few, if any, internal protocols for basic accounting and management. He said, for example, that employee expenses would sometimes be approved with emojis, and that the company used Quickbooks, an accounting tool that was an odd choice for a large company.
But Bankman-Fried continued to maintain a public profile, portraying herself as an open book willing to discuss the FTX’s collapse and the blunders that led to it.
In a whirlwind week in December, Bankman-Fried was arrested in the Bahamas, held at Fox Hill Prison there, and extradited to New York.
Read Insider’s FTX saga so far:
FTX files for bankruptcy and Sam Bankman-Fried steps down as CEO after failing to secure cryptocurrency exchange rescue
The collapse of crypto firm FTX and its superstar founder explained for the crypto-savvy
Liberal PACs and charities that received $260 million from FTX and its executives may be forced to give it all back.
The lawyers took us through the FTX bankruptcy petition. This is really, really bad.
Sam Bankman-Fried FTX faces eight felony charges, including fraud and conspiracy, for allegedly “misappropriating” client funds.
The SEC indicted Sam Bankman-Fried, accusing him of “massive, years-long fraud.”
Legal experts say Sam Bankman-Fried faces hefty fines and prison time if convicted of the criminal charges.
Read the CFTC complaint against FTX’s Sam Bankman-Fried and her partners Caroline Ellison and Gary Wang
Accusations against Caroline Ellison, SBF and FTX co-founder Gary Wang – in 60 seconds
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