Samuel Bankman-Fried’s poster in downtown San Francisco.
MacKenzie Sigalos | CNBC
The Kimchi Swap put Sam Bankman-Fried on the map.
The year was 2017, and the ex-Jane Street Capital quant trader noticed something funny when he looked at the page on CoinMarketCap.com listing the price of bitcoin on exchanges around the world. Today, that price is pretty much uniform across the exchanges, but back then, Bankman-Fried previously told CNBC, he would sometimes see a 60% difference in the value of the coin. His immediate instinct, he said, was to get in on the arbitrage trade — buying bitcoin on one exchange, selling it back on another exchange, and then earning a profit equivalent to the price spread.
“That’s the lowest hanging fruit,” Bankman-Fried said in September.
The arbitrage opportunity was especially compelling in South Korea, where the exchange-listed price of bitcoin was significantly more than in other countries. It was dubbed the Kimchi Premium — a reference to the traditional Korean side dish of salted and fermented cabbage.
After a month of personally dabbling in the market, Bankman-Fried launched his own trading house, Alameda Research — named after his hometown of Alameda, California, near San Francisco — to scale the opportunity and work on it full-time. Bankman-Fried said in an interview in September that the firm sometimes made as much as a million dollars a day.
Part of why SBF, as he’s also called, earned street cred for carrying out a relatively straightforward trading strategy had to do with the fact that it wasn’t the easiest thing to execute on crypto rails five years ago. Bitcoin arbitrage involved setting up connections to each one of the trading platforms, as well as building out other complicated infrastructure to abstract away a lot of the operational aspects of making the trade. Bankman-Fried’s Alameda became very good at that, and the money rolled in.
From there, the SBF empire ballooned.
Alameda’s success spurred the launch of crypto exchange FTX in the spring of 2019. FTX’s success begat a $2 billion venture fund that seeded other crypto firms. Bankman-Fried’s personal wealth grew to over $16 billion at its peak in March.
Bankman-Fried was suddenly the poster boy for crypto everywhere, and the FTX logo adorned everything from Formula 1 race cars to a Miami basketball arena. The 30-year-old went on an endless press tour, bragged about having a balance sheet that could one day buy Goldman Sachs, and became a fixture in Washington, where he was one of the Democratic Party’s top donors, promising to sink $1 billion into U.S. political races before later backtracking.
It was all a mirage.
As crypto prices tanked this year, Bankman-Fried bragged that he and his enterprise were immune. But in fact, the sectorwide wipeout hit his operation quite hard. Alameda borrowed money to invest in failing digital asset firms this spring and summer to keep the industry afloat, then reportedly siphoned off FTX customers’ deposits to stave off margin calls and meet immediate debt obligations. A Twitter fight with the CEO of rival exchange Binance pulled the mask off the scheme.
Alameda, FTX and a host of subsidiaries Bankman-Fried founded have filed for bankruptcy protection in Delaware. He’s stepped down from his leadership roles and lost 94% of his personal wealth in a single day. It is unclear exactly where he is now, as his $40 million Bahamas penthouse is reportedly up for sale.The photos of his face plastered across FTX advertisements throughout downtown San Francisco serve as an unwelcome reminder of his rotting empire.
It was a steep fall from hero to villain. But there were a lot of signs.
Bankman-Fried told CNBC in September that one of his fundamental principles when it comes to playing the markets is working with incomplete information.
“When you can sort of start to quantify and map out what’s going on, but you know there are a lot of things you don’t know,” he said. “You know you’re being approximate, but you have to try to figure out what trade to do anyway.”
The following account is based on reporting from CNBC, Bloomberg, The New York Times, The Wall Street Journal and elsewhere. Piecing together information from various news sources paints a picture of an investor who over-extended himself, frantically moved to cover his mistakes with questionable and perhaps illegal tactics, and surrounded himself with a tight cabal of advisors who could not or would not curb his worst impulses.
What went wrong in the last year
At some point in the last two years, according to reports, Alameda began borrowing money for various purposes, including to make venture investments.
Six months ago, a wave of titans in the crypto sector folded as depressed token prices sucked liquidity out of the market. First came the spectacular failure of a popular U.S. dollar-pegged stablecoin project — the stablecoin known as terraUSD, or UST, and its sister token luna — wiping out $60 billion. That collapse helped to bring down Three Arrows Capital, or 3AC, which was one of the industry’s most respected crypto hedge funds. Crypto brokers and lenders such as Voyager Digital and Celsius had significant exposure to 3AC, so they fell right along with it in quick succession.
The big problem was that everyone was borrowing from one another, which only works when the price of all those crypto coins keeps going up. By June, bitcoin and ether had both tumbled by more than half for the year.
“Leverage is the source of every implosion in financial institutions, both traditional and crypto,” said Hart Lambur, a former Goldman Sachs government bond trader who provided liquidity in U.S. Treasuries for central banks, money managers and hedge funds.
“Lehman Brothers, Bear Stearns, Long-Term Capital, Three Arrows Capital and now FTX all blew up due to bad leverage that got sniffed out and exploited by the market,” said Lambur, who now works in decentralized finance.
Amid the wave of bankruptcies, some of Alameda’s lenders asked for their money back. But Alameda didn’t have it, because it was no longer liquid. Bankman-Fried’s trading firm had parked the borrowed money in venture investments, a decision that was “probably not really worth it,” he told the Times in an interview Sunday.
To meet its debt obligations, FTX borrowed from customer deposits in FTX to quietly bail out Alameda, the Journal and the Times reported. The borrowing was in the billions. Bankman-Fried admitted the move in his interview with the Times, saying that Alameda had a large “margin position” on FTX, but he declined to disclose the exact amount.
“It was substantially larger than I had thought it was,” Bankman-Fried told the Times. “And in fact the downside risk was very significant.”
Reuters and the Journal both reported that the lifeline was around $10 billion, and Reuters reports that $1 billion to $2 billion of that emergency financing is now missing. Tapping customer funds without permission was a violation of FTX’s own terms and conditions. On Wall Street, it would be a clear violation of U.S. securities laws.
The two firms — one of the world’s biggest crypto brokers and one of the world’s biggest crypto buyers — were supposed to be separated by a firewall. But they were, in fact, quite cozy, at one point extending to a romantic relationship between Bankman-Fried and Alameda CEO Caroline Ellison, he acknowledged to the Times.
“FTX and Alameda had an extremely problematic relationship,” Castle Island Venture’s Nic Carter told CNBC. “Bankman-Fried operated both an exchange and a prop shop, which is super unorthodox and just not really allowed in actually regulated capital markets.”
The borrowing and lending scheme between the two firms was more convoluted than just using customer funds to make up for bad trading bets. FTX tried to paper over the hole by denoting assets in two crypto tokens that were essentially made up — FTT, a token created by FTX, and Serum, which was a token created and promoted by FTX and Alameda, according to financial filings reported by Bloomberg’s Matt Levine.
Firms make up crypto tokens all the time — indeed, it’s a big part of how the crypto boom of the last two years was financed — and they usually offer some sort of benefit to users, although their real value to most traders is simple speculation, that is, the hope that the price will rise. Owners of FTT were promised lower trading costs on FTX and the ability to earn interest and rewards, such as waived blockchain fees. While investors can profit when FTT and other coins increase in value, they’re largely unregulated and are particularly susceptible to market downturns.
These tokens were essentially proxies for what people believedBankman-Fried’s exchange to be worth, since it controlled the vast majority of them. Investor confidence in FTX was reflected in the price of FTT.
The key point here is that FTX was reportedlysiphoning off customer assets as collateral for loans, and then covering it with a token it made up and printed at will, drip-feeding only a fraction of its supply into the open market. The financial acrobatics between the two firms somewhat resembles the moves that sank energy firm Enron almost two decades ago — in that case, Enron essentially hid losses by transferring underperforming assets to off-balance sheet subsidiaries, then created complicated financial instruments to obscure the moves.
As all this was happening, Bankman-Fried continued his press tour, lionized as one of the great young tech entrepreneurs of the age. It only began to unravel onceBankman-Fried got into a public spat with Binance, a rival exchange.
What went wrong in the last two weeks
The relationship between Binance and Bankman-Fried goes back almost to the beginning of his time in the industry. In 2019, Binance announced a strategic investment in FTX and said that as part of the deal it had taken “a long-term position in the FTX Token (FTT) to help enable sustainable growth of the FTX ecosystem.”
Flash forward a couple years to the summer of 2022. Bankman-Fried was pressing regulators to look into Binance and criticizing the exchange in public. It’s unclear exactly why — it could have been based on legitimate suspicions. Or it may simply have been because Binance was a major competitor to FTX, both as an exchange and as a potential buyer of other distressed crypto companies.
Whatever the reason, Binance CEO Changpeng Zhao, known as CZ, soon saw his chance to strike.
On Nov. 2, CoinDesk reported a leaked balance sheet showing that a significant amount of Alameda’s assets were held in FTX’s illiquid FTT token. It raised questions about both the trading firm’s solvency and FTX’s financials.
Zhao took to Twitter on Nov. 6, saying that Binance had about $2.1 billion worth of FTT and BUSD, its own stablecoin.
Then he dropped the bomb:
“Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books,” he said.
Investors raced to pull money out of FTX. On Nov. 6, according to Bankman-Fried, the exchange had roughly $5 billion of withdrawals, “the largest by a huge margin.” On an average day, net inflows had been in the tens of millions of dollars.
The speed of the withdrawals underscores how the largely unregulated crypto market is often operating in an information vacuum, meaning that traders react fast when new facts come to light.
“Crypto players are reacting quicker to news and rumor, which in turn builds up a liquidity crisis much faster than one would have seen in traditional finance,” said Fabian Astic, head of decentralized finance and digital assets for Moody’s Investors Service.
“The opacity of the market operations often leads to panic reactions that, in turn, spark a liquidity crunch. The developments with Celsius, Three Arrows, Voyager, and FTX show how easy it is for crypto investors to lose confidence, prompting them to withdraw large sums and causing a near-death crisis for these firms,” Astic said.
As the FTT token plunged in value in tandem with the mass withdrawals, Bankman-Fried quietly sought investors to cover the multibillion-dollar hole from the money that had been withdrawn by Alameda. That value may have been as high as $10 billion, according to multiple reports. They all declined, and in a move of desperation, SBF turned to CZ.
In a public tweet on Nov. 8, Zhao said Binance agreed to buy the company, though the deal had a key term: nonbinding. The sudden public revelation that FTX was in need of a bailout caused FTT’s value to plunge off a cliff.
On Friday, Nov. 11, FTX and Alameda both filed for bankruptcy. FTX, which was valued at $32 billion in a financing round earlier this year, has frozen trading and customer assets and is seeking to discharge its creditors in bankruptcy court. Bankman-Fried is no longer the boss at either firm.
A new bankruptcy filing postedTuesday shows that FTX may have more than 1 million creditors. It plans to file a list of the 50 largest ones this week.
Lawyers for the exchange wrote that FTX has been in contact with “dozens” of regulators in the U.S. and overseas in the last 72 hours, including the U.S. Attorney’s Office, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC and Department of Justice are reportedly investigating FTX for civil and criminal violations of securities laws. Financial regulators in the Bahamas are also reportedly looking at the possibility of criminal misconduct.
CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill December 8, 2021 in Washington, DC.
Alex Wong | Getty Images
Binance is nowpoised to claim absolute dominance over the industry.
“Binance clearly comes out stronger from all of this,” said William Quigley, co-founder of the U.S. dollar-pegged stablecoin tether. “CZ claims Binance has no debt, and doesn’t use its BNB token as collateral. Both of those are good practices in the highly volatile crypto markets.”
Quigley added that more institutional trading and custody will likely shift to Binance.
“The cryptocurrency industry’s entire ethos is founded on disintermediation and decentralization, so Binance’s ever-growing dominance raises reasonable fears over how further centralization will affect the average trader,” said Clara Medalie, director of research at data firm Kaiko.
“FTX’s collapse benefits no one, not even Binance, which will now face growing questions over its monopoly of market activity,” Medalie told CNBC, speculating that we are just seeing the tip of the iceberg of market participants affected by the fall of FTX and Alameda.
“Each entity has numerous twisted and over-lapping financial ties to projects throughout the industry that now stand to lose support or go under themselves,” she said.
In the meantime, though, Binance took a bath on the collapse of the FTT token, which Zhao said the firm held after Bankman-Fried asked for a bailout.
A United Launch Alliance Atlas V rocket is on the launch pad carrying Amazon’s Project Kuiper internet network satellites, which are expected to eventually rival Elon Musk’s Starlink system, at the Cape Canaveral Space Force Station in Cape Canaveral, Florida, U.S., April 9, 2025.
Steve Nesius | Reuters
Amazon on Monday launched the first batch of its Kuiper internet satellites into space after an earlier attempt was scrubbed due to inclement weather.
A United Launch Alliance rocket carrying 27 Kuiper satellites lifted off from a launchpad at the Cape Canaveral Space Force Station in Florida shortly after 7 p.m. eastern, according to a livestream.
“We had a nice smooth countdown, beautiful weather, beautiful liftoff, and Atlas V is on its way to orbit to take those 27 Kuiper satellites, put them on their way and really start this new era in internet connectivity,” Caleb Weiss, a systems engineer at ULA, said on the livestream following the launch.
The satellites are expected to separate from the rocket roughly 280 miles above Earth’s surface, at which point Amazon will look to confirm the satellites can independently maneuver and communicate with its employees on the ground.
Six years ago Amazon unveiled its plans to build a constellation of internet-beaming satellites in low Earth orbit, called Project Kuiper. The service will compete directly with Elon Musk’s Starlink, which currently dominates the market and has 8,000 satellites in orbit.
The first Kuiper mission kicks off what will need to become a steady cadence of launches in order for Amazon to meet a deadline set by the Federal Communications Commission. The agency expects the company to have half of its total constellation, or 1,618 satellites, up in the air by July 2026.
Amazon has booked more than 80 launches to deploy dozens of satellites at a time. In addition to ULA, its launch partners include Musk’s SpaceX (parent company of Starlink), European company Arianespace and Jeff Bezos’ space exploration startup Blue Origin.
Amazon is spending as much as $10 billion to build the Kuiper network. It hopes to begin commercial service for consumers, enterprises and government later this year.
In his shareholder letter earlier this month, Amazon CEO Andy Jassy said Kuiper will require upfront investment at first, but eventually the company expects it to be “a meaningful operating income and ROIC business for us.” ROIC stands for return on invested capital.
Investors will be listening for any commentary around further capex spend on Kuiper when Amazon reports first-quarter earnings after the bell on Thursday.
Larry Ellison, co-founder and executive chairman of Oracle Corp., speaks during the Oracle OpenWorld 2018 conference in San Francisco, California, U.S., on Monday, Oct. 22, 2018.
David Paul Morris | Bloomberg | Getty Images
Oracle engineers mistakenly triggered a five-day software outage at a number of Community Health Systems hospitals, causing the facilities to temporarily return to paper-based patient records.
CHS told CNBC that the outage involving Oracle Health, the company’s electronic health record (EHR) system, affected “several” hospitals, leading them to activate “downtime procedures.” Trade publication Becker’s Hospital Review reported that 45 hospitals were hit.
The outage began on April 23, after engineers conducting maintenance work mistakenly deleted critical storage connected to a key database, a CHS spokesperson said in a statement. The outage was resolved on Monday, and was not related to a cyberattack or other security incident.
CHS is based in Tennessee and includes 72 hospitals in 14 states, according to the medical system’s website.
“Despite this being a major outage, our hospitals were able to maintain services with no material impact,” the spokesperson said. “We are proud of our clinical and support teams who worked through the multi-day outage with professionalism and a commitment to delivering high-quality, safe care for patients.”
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Oracle stock this year
Oracle didn’t immediately respond to CNBC’s request for comment.
An EHR is a digital version of a patient’s medical history that’s updated by doctors and nurses. It’s crucial software within the U.S. health-care system, and outages can cause serious disruptions to patient care. Oracle acquired EHR vendor Cerner in 2022 for $28.3 billion, becoming the second-biggest player in the market, behind Epic Systems.
Now that Oracle’s systems are back online, CHS said that the impacted hospitals are working to “re-establish full functionality and return to normal operations and procedures.”
Oracle’s CHS error comes weeks after the company’s federal electronic health record experienced a nationwide outage. Oracle has struggled with a thorny, years-long EHR rollout with the Department of Veterans Affairs, marred by patient safety concerns. The agency launched a strategic review of Cerner in 2021, before Oracle’s acquisition, and it temporarily paused deployment of the software in 2023.
Against a volatile market backdrop, the software maker’s stock has gained 45% and is the best performer among companies valued at $5 billion or more, according to FactSet. The closest tech names are VeriSign, up 33%, Okta, up 30%, Robinhood, up 29%, and Uber, up 29%.
“When you think about macroeconomic concerns, you as a company need to be more efficient, and this is where Palantir thrives,” said Bank of America analyst Mariana Pérez Mora.
Palantir has set itself apart in the software world for its artificial-intelligence-enabled tools, gaining recognition for its defense and software contracts with key U.S. government agencies, including the military. In the fourth quarter, its government revenues jumped 45% year-over-year to $343 million.
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Companies have faced immense volatility in 2025 as tariffs threaten to jeopardize global supply chains and halt day-to-day manufacturing operations by hiking costs. Those fears have brought the broad market index down about 7% this year, while the tech-heavy Nasdaq Composite has slumped 11%.
At the same time, the Trump administration has clamped down on government spending, giving Tesla CEO Elon Musk‘s Department of Government Efficiency freedom to slash public sector costs. Some administration officials have touted shifting dollars from consulting contracts to commercial software providers like Palantir, said William Blair analyst Louie DiPalma.
“Palantir’s business model is highly aligned with the priorities of the Trump administration in terms of increasing agility and being very quick to market,” he said.
That’s put Palantir in the league with major contractors such as Lockheed Martin and Northrop Grumman, which have outperformed in this year’s downdraft. Many companies in the space are also looking to partner with the firm and tend to flock to defense during recessionary times, DiPalma said.
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Palantir vs. the Nasdaq Composite
CEO Alex Karp has also been a vocal supporter of American innovation and the company’s central role in helping prop up what he called the “single best tech scene in the world” during an interview with CNBC earlier this year. Karp also told CNBC that the U.S. needs an “all-country effort” to compete against emerging adversaries.
But the ride for Palantir has been far from smooth, and shares have been susceptible to volatile swings. Shares sold off nearly 14% during the week that Trump first announced tariffs. Shares rocketed 22% one day in February on strong earnings.
Its inclusion in more passive and quant funds over the years and the growing attention of retail traders has added to that turbulence, DiPalma said. Last year, the company joined both the S&P and Nasdaq. Palantir trades at one of the highest price-to-earnings multiples in software and last traded at 185 times earnings over the next twelve months. That puts a steep bar on the stock.