Who Is The Fallen Wunderkind of Cryptocurrency, Sam Bankman-Fried?

He was the face of cryptocurrencies, and a relatively young one at that, a media favorite who seemed set to bring the industry together.

However, Sam Bankman-Fried’s incredible ascent and his FTX platform would be followed by an equally spectacular collapse, when it became apparent that billions of dollars’ worth of customer assets had been transferred and spent without authorization.

The 31-year-old former tycoon, Bankman-Fried, may now spend the rest of his life in prison after a federal jury in New York found him guilty of spearheading the fraudulent enterprise.

The native Californian had accumulated a wealth that was once thought to be worth $26 billion until it all came crumbling down. The headline on Forbes’ October 2021 cover said, “Save for Mark Zuckerberg, no one in history has ever gotten so rich so young.” Bankman-Fried was featured on the magazine.

The physics graduate from Massachusetts Institute of Technology turned the firm he co-founded in 2019 into the second-largest cryptocurrency trading platform in the world in a few of months.

He soon transcended the role of a young businessman, positioning himself as a cryptocurrency evangelist and appearing before Congress for the first time in December 2021 to give testimony on the then-new form of money.

The world would meet this somewhat eccentric whiz kid with a mop of wavy black hair who, when not dressed for appearances on Capitol Hill, looked quite fine in shorts and a T-shirt.

The Crypto World’s Center

The son of two Stanford University academics, Bankman-Fried stepped beyond the realm of cryptocurrencies, donating to US politicians and convincing NFL player Tom Brady and NBA player Stephen Curry to support FTX, for which they received large sums of money in return.

The young guy known as SBF would win over US politicians with his bluntness and broad regulatory framework for cryptocurrency, which went against the views of many in the industry.

He came up with idea after project, starting with a bitcoin contribution network for Ukraine and ending with a Wall Street-infringing financial derivatives market.

Vegan Bankman-Fried stated he supported the idea of effective altruism, which he defined as figuring out the greatest method to assist others, especially by giving all or a portion of one’s money to charity as opposed to, example, helping at a soup kitchen.

Bankman-Fried presented himself as a hero when the cryptocurrency industry plunged into turmoil in the spring of 2022, purchasing shares in Voyager and the unstable platform BlockFi.

At the time, he tweeted, “We take our duty seriously to protect the digital asset ecosystem and its customers,” in response to criticism that he was, at the age of 30, too young to be the next Warren Buffett.

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However, as subsequent evidence and court filings revealed, Bankman-Fried was really walking a tightrope in terms of money behind his guarantees.

Bankman-Fried’s group, unbeknownst to them, used FTX clients’ funds to finance high-risk activities carried out by a connected trading firm named Alameda Research, as well as to purchase upscale real estate and contribute to political campaigns.

The cryptocurrency news site CoinDesk disclosed in November 2022 that Alameda has changed a significant portion of its assets into FTT, a coin developed by FTX. That currency fell sharply as a result of that news.

The biggest cryptocurrency trading platform in the world, Binance, led by Changpeng Zhao, stated hours later that it was selling every FTT token it had. This announcement caused the platform to lose 90% of its value in a couple of days and took the Bankman-Fried empire with it.

After his wealth disappeared over night, Bankman-Fried was deported from the Bahamas, the home base of FTX. He was charged in December 2022 on allegations of fraud and racketeering.

Following a five-week trial, the jury promptly found the defendants guilty on all seven charges, carrying a maximum punishment of 110 years in prison.

During the defense’s closing arguments, they said that their client had behaved in “good faith” and was only impacted by external factors, including the financial incompetence of close acquaintances who testified against him in order to get the prosecution to grant them mercy.

The defendant was presented by the prosecution as a very intelligent, avaricious individual who understood exactly what he was doing when FTX monies were surreptitiously transferred to his own hedge fund.

Prosecutors claim that at the time of FTX’s bankruptcy, just over $8 billion in consumer funds had disappeared into risky Alameda ventures.

Who was in charge? The query is that. “It was just the defendant—one person,” the main prosecutor said.