Sam Bankman-Fried: This crypto entrepreneur saw his £21bn empire crumble in just three days – what happened at FTX?

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3 years ago

December 3, 2022

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Sam Bankman-Fried looked unstoppable.

The 30-year-old had built a £21bn business empire and was the CEO of FTX, the world’s second-largest cryptocurrency exchange.

More than one million customers worldwide were using his platform to buy assets like Bitcoin – enticed by star-studded adverts that made everything look simple and safe.

Bankman-Fried – known as SBF for short – had become one of the biggest names in the crypto industry too, with his company swooping in to save smaller firms after they were tipped into bankruptcy.

But in the space of just three days, a series of bombshell allegations led to the spectacular collapse of FTX and a bankruptcy of its own.

Bankman-Fried’s personal wealth dropped by a staggering 94% in 24 hours – the biggest one-day fall ever suffered by a billionaire, according to Bloomberg.

Hundreds of thousands are locked out of their life savings – an estimated 80,000 of them in the UK.

Vast sums of money have gone missing from the exchange, amid allegations that customer funds were mismanaged.

No longer a billionaire, Bankman-Fried says his net worth has dwindled to $100,000 (£80,000) following FTX’s demise – and he admitted it has been a “bad month”.

But it could soon get a lot worse for Bankman-Fried. Criminal investigations have now been launched into the company’s collapse, with aggrieved investors filing a flurry of lawsuits.

So what next for the deposed “Crypto King”, why did his digital empire rise and fall so quickly, and where does it leave this already embattled industry?

An ‘altruistic’ entrepreneur

Californian-born, a poster boy for “effective altruism” (getting rich in order to give money to good causes), a teetotaller and a vegan, Bankman-Fried is in many ways a far cry from the Machiavellian emperors of time gone by.

Still, SBF managed to craft an empire that would even make Julius Caesar green-eyed.

Bankman-Fried’s story – which is by no means a rags-to-riches one – begins in the wealthy San Francisco Bay area, where he attended a $56,000-a-year school.

After graduating from the Massachusetts Institute of Technology, SBF moved on to Wall Street – and later set up his own trading business called Alameda Research.

His co-founder Tara Mac Aulay left the business in 2018 in part because of “concerns over risk management and business ethics”.

After attending a cryptocurrency event, Bankman-Fried left the US and moved to Hong Kong, where he founded FTX.

The FTX boom

FTX was set up to allow people to buy cryptocurrencies using their pounds and dollars. It was praised for its easy-to-use interface – and made money by charging small fees for each transaction.

By July 2021, FTX had more than one million users and was the third-largest cryptocurrency exchange by volume – winning investments from major firms including SoftBank and Sequoia Capital.

In September of that year, Bankman-Fried moved his business to the tax haven of The Bahamas – in part, he claimed, because of a crackdown on crypto by China.

Once settled in the Caribbean, Bankman-Fried – an avid gamer who was once accused of playing League of Legends during a business meeting – invested in a multimillion-dollar waterfront penthouse.

The luxury property, overlooking an area used for filming the scene where Daniel Craig famously emerged from the water in Casino Royale, was also used as a home office for Bankman-Fried and up to nine of his FTX devotees.

Under SBF’s leadership, FTX marketed itself aggressively. It paid a reported $135m (£110m) for the naming rights to an arena used by the Miami Heat basketball team.

Tennis star Naomi Osaka and NFL legend Tom Brady entered into high-profile partnerships with the exchange – appearing in TV adverts and snapping up equity stakes in the business.

And during the Super Bowl earlier this year, FTX spent millions on a 60-second TV spot featuring Curb Your Enthusiasm star Larry David – a commercial that hasn’t aged well.

The advert showed David travelling through the ages and dismissing inventions including the wheel, the fork and the toilet – zooming to the present day, where he’s told about FTX being a “safe and easy way to get into crypto”.

“Ehhhhh, I don’t think so,” the comedian says in the advert. “And I’m never wrong about this stuff. Never.”

The FTX bust

In April this year, Bankman-Fried cemented his status – appearing on stage at an event with former US president Bill Clinton and ex-UK prime minister Tony Blair.

SBF also backed Joe Biden’s presidential campaign against Donald Trump to the tune of more than $5m (£4.1m) – making him the politician’s second-biggest financial backer.

But last month, reports began to suggest trouble was afoot at FTX because of its close ties to Bankman-Fried’s first business, Alameda Research.

FTX had created its own token called FTT, which was designed to offer discounts and incentives to the exchange’s customers. The total value of all the FTT tokens in circulation stood at £2.65bn – making it one of the biggest cryptocurrencies in the world.

A leaked document obtained by the crypto publication CoinDesk revealed that Alameda Research had a significant amount of FTT on its balance sheet – raising serious questions about the health of this trading firm.

That spooked Changpeng Zhao – an early investor in FTX who runs Binance, the world’s biggest exchange.

In a dramatic move, Zhao, who had been feuding with Bankman-Fried over the future of crypto regulation, announced Binance would sell off the FTT tokens on its books – a haul worth $529m (£430m).

The announcement sparked a huge decline in the value of FTT, which has lost 95% of its value since the crisis began. Meanwhile, investors rushed to FTX to withdraw their crypto, fearing its collapse.

It is estimated that about $6bn (£5.2bn) worth of withdrawal requests were made in three days, pushing FTX into a financial crisis.

Binance said it would consider acquiring FTX – but one executive said it took just two hours of due diligence to conclude that the company was beyond saving.

That same day, FTX filed for bankruptcy in the US state of Delaware – with liabilities of at least $10bn (£8.2bn).

Users are now unable to withdraw their savings from the exchange, and it could be years before they see any of their money again.

Things then went from bad to worse. Hours after the bankruptcy, worried customers were dealt another blow after FTX was hacked – with officials estimating that $600m (£490m) was siphoned from the exchange.

Bankman-Fried also caused anger when he tweeted “WHAT HAPPENED”, one letter at a time, in a thread over several days – leading to criticism that he was tone deaf while users were desperate for updates about what was going on.

Allegations of shady business practices have since emerged – with Reuters reporting that FTX used customer funds to cover losses at its sister company Alameda Research, with up to £8bn being moved in secret. Bankman-Fried has said he “wasn’t running” Alameda’s operations and “didn’t know exactly what was going on”.

Elsewhere, it’s been claimed that Bankman-Fried had established a “backdoor” in FTX’s bookkeeping system that allowed money to be moved out of the business without other executives being alerted. The entrepreneur has denied that this was the case.

The Financial Times also reported that as much as $8bn (£6.5bn) in customer funds has vanished from FTX – and now, the exchange’s new management has been left picking up the pieces.

FTX’s new CEO is John Ray, who made his name after leading the energy firm Enron through bankruptcy proceedings in the early 2000s. That major company had collapsed amid revelations of widespread accounting fraud and corruption.

Outlining the severity of the crypto exchange’s condition, Mr Ray wrote in a bankruptcy filing: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

A bankruptcy lawyer for FTX’s new management later said Bankman-Fried had run the company as his “personal fiefdom” – and the business has suffered “one of the most abrupt and difficult collapses in the history of corporate America”.

Bankman-Fried has repeatedly apologised – saying he “f***** up” with how he handled the business – and has given a number of high-profile interviews despite being advised not to do so by lawyers.

He has also expressed fears that some customers who had crypto locked up in FTX may only receive 20% to 25% of their savings back.

On Wednesday, he spoke at The New York Times’ DealBook summit for the first time since the dramatic collapse of the business.

He said: “I didn’t ever try to commit fraud on anyone. I was excited about the prospects of FTX a month ago. I saw it as a thriving, growing business. I was shocked by what happened this month.”

SBF was also asked about claims that he and the co-workers in his penthouse were a polyamorous group who drifted in and out of relationships with one another and held drug-fuelled parties.

He told The New York Times: “When we had parties, we played board games and 20% of people would have three-quarters of beer each or something like that. And the rest of us would not drink anything. I didn’t see any illegal drug use around me – you know, at the office or at these parties.”

And speaking to Good Morning America, SBF added: “I lived with a bunch of monogamous couples when I was here, some of whom got married over the course of their time here. I don’t know of any polyamorous relationships within FTX.”

What about the future?

Everyday investors and some top US firms have lost out in the FTX crash.

A crypto lending company called BlockFi has now been tipped into bankruptcy as a direct result of this exchange’s demise, and more may follow.

Meanwhile, the future of other businesses that FTX had acquired is uncertain.

The shockwaves have been largely contained in the crypto sector and haven’t spilled over into traditional markets.

Nonetheless, experts in the field say there will be real-world ramifications going forward.

Eddie Donmez, finance influencer and global market analyst at Finimize, said crypto businesses are likely to face more regulation in the future.

He told Sky News: “In the near term, the contagion has been within the crypto market and while the near term has been very bad, terrible, for cryptocurrency what I do think is that it could be an acid test for regulation.

“While there are always bad actors involved in any industry where money is involved, this could be a good thing in the long term for crypto.”

Mr Donmez also said he believed that the whole FTX episode is something that should make people sit up and listen.

He added: “This story is of interest to the public because there are some major players who have been fooled by a kid playing computer games in investment meetings.

“It shows everyone can get it wrong from time to time.”

Katharine Wooller, from crypto insurance firm Coincover, added: “I think this will bring regulation. Crypto purists will say no because it is against what they believe is at the heart of crypto, but there needs to be more regulation, not less.”

The collapse of FTX is another hammer blow to the credibility of cryptocurrencies – with Bitcoin’s price falling by 75% since November 2021.

But Bitcoin enthusiasts say this company’s demise shows why it is important for investors to store crypto on their own devices, rather than entrust it to an exchange.

There’s little sign that conditions will improve in this infamously volatile sector any time soon – and if the world’s second-largest exchange can go bankrupt, no crypto company is safe.

World

Stakes high for Trump-Putin summit as Zelenskyy faces nightmare deal

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11 hours ago

August 10, 2025

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Stakes high for Trump-Putin summit as Zelenskyy faces nightmare deal

For Ukraine – its exhausted, brave soldiers, its thousands of bereaved families mourning their dead, and its beleaguered president – it is exactly what they feared it would be.

They fear the compromise they will be forced to make will be messy, costly, unfair and ultimately beneficial to the invading tyrant who brought death and destruction to their sovereign land.

Six weeks ago, I spoke to President Zelenskyy in London.

War latest: Team Trump ‘risk being out of their depth’ at Putin meeting

I put it to him in our Sky News interview that Presidents Trump and Putin were heading towards making a deal between themselves, a grand bargain, in which Ukraine was but one piece on the chessboard.

Zelenskyy smiled as if to acknowledge the reality ahead.

He paused and then he said this: “We are not going to be a card in talks between great nations, and we will never accept that… I definitely do not want to see global deals between America and Russia.

“We don’t need it. We are a separate story, a victim of Russian aggression and we will not reward it.”

It was a response that betrayed his greatest fear – that this will become essentially a Trump negotiation in which Zelenskyy and Ukraine will be told “take it or leave it”.

And, by the way, if you “leave it”, then it will be painful.

Harsh realities

It’s the prospect that now confronts Zelenskyy as Trump and Putin plough ahead on a course that has clear attractions for both of them.

Of course, Zelenskyy is right to say there can be no deal without Ukraine. But there are harsh realities at play here.

Trump wants a deal on Ukraine – any deal – that he can chalk up as a win. He wants it badly and he wants it now.

It’s the impediment to a broader strategic deal with Putin and he wants it out of the way. It’s what he does, and it’s the way he does it. And President Putin knows it.

He knows Trump, he sees an opportunity in Trump, and he can’t get across Russia to Alaska fast enough. He will be back at global diplomacy’s top table.

Always a deal to be done

Make no mistake, when Trump says he just wants to stop the killing, he means it. Such wanton loss of young lives offends him. He keeps saying it.

He sees war, by and large, as an unnecessary waste of life and of money. Deals are there to be done. There’s always a deal.

Sadly for Ukraine, in this case, it is unlikely to be a fair deal.

How can any deal be “fair” when you are the victim of outrageous brutality and heinous crimes.

But it may well be the deal they have to take unless they want to fight an increasingly one-sided war with much less help from Trump and America.

A senior UK diplomat told me if things turn out as feared, it should not be called a land-for-peace deal. It should be called annexation “because that’s what it is”.

But here’s the rub.

Peace, calm, the end of the nightly terror of war has much to recommend it. In short, a bad peace can often seem better than no peace. But, ultimately, rewarded dictators always come back for more.

If Ukraine has to accept a bad peace, then it will want clear security guarantees to make sure it cannot happen again.

It is the very least they deserve.

There is much at stake in Alaska.

World

Desperation only grows in Gaza, as crowds swell at protests in Israel

Published

11 hours ago

August 10, 2025

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Desperation only grows in Gaza, as crowds swell at protests in Israel

As if life in Gaza wasn’t hard enough, there is now a heatwave – compounding the problems of minimal water, food and the basics you need to keep a family alive.

To keep your children halfway clean, when you’ve been displaced over and over again, forced to live under tarpaulin rammed up against your neighbours.

“We suffer greatly, especially because we live in tents,” says Riham Akel, who was displaced from the north and now lives in Gaza City.

“They are made of cloth and plastic that do not protect us from the heat. In addition, there is no electricity, drinking water or water for washing, no fans or air conditioning.”

Given Israel’s planned takeover of Gaza City – and the evacuation of the 800,000 or so people now living there – it’s likely she’ll be forced to move again.

In Hostages Square in Tel Aviv, the crowds have swelled these past two Saturdays – almost doubling after Hamas published propaganda videos showing two of the remaining hostages starving in captivity – and now this week, Benjamin Netanyahu’s decision to push ahead with full security control of the Gaza Strip.

People here just want it to stop.

Yael said: “I feel like a hostage in my own country, as though no one listens to me – 80% of the citizens don’t want it anymore.”

“When you talk about the government it’s not only Gaza,” says David Solomon. “They are trying to undermine the democracy in Israel, they’re trying willingly to destroy the whole of Israel, they don’t care just for another year or two of their survival.”

There are also calls for IDF soldiers to refuse to carry out Netanyahu’s plan to take over Gaza City.

Another major point of contention is what many see as the failure of the International Red Cross to bring food to the hostages. Food for the Palestinians in Gaza is not much discussed, except for a small group on the fringes.

“We believe that the Israeli public is ignorant on purpose,” says Gilad Melzer – holding up a sign saying “Stop Genocide” with a photo of a starving child.

“Some of it wants to stay ignorant and some, the government wants to keep them ignorant of what is going on in Gaza and they’re ignorant as well of what is going on in the occupied territories.”

Benjamin Netanyahu seems to have made up his mind, though. He will ramp up the fight, despite international outcry, despite the opposition of his military leadership and despite the tens of thousands who rally each week in Hostages Square, hoping someone in government will bother to listen.

There is a sense of hopelessness here – that the solidarity of numbers still makes so little difference.

World

Gaza ‘injured his soul’: Israeli soldier died by suicide two days before he was due to return to duty

Published

11 hours ago

August 10, 2025

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Gaza 'injured his soul': Israeli soldier died by suicide two days before he was due to return to duty

When your son is risking his life fighting in Gaza, you don’t expect to hear news he’s been killed on a rest period at home.

Eliran Mizrahi had served 187 days as a reservist in Gaza since 8 October, before he died by suicide in June last year.

His mother Jenny has turned Eliran’s childhood bedroom into a shrine. The 40-year-old’s combat vest hanging on the wall still has sand in it from Gaza.

The cap he was wearing when he died, sits just above it on a shelf laden with memories of his life.

Israel is seeing a wave of soldiers like Eliran taking their own lives – five died by suicide just last month.

IDF (Israel Defence Forces) investigations have found it is what they have seen and done in Gaza that are the cause, according to reports by the Israeli public broadcaster.

Eliran’s mother told Sky News her son returned from Gaza a changed man and she fears there will be many more suicides among Israeli soldiers.

“He never left Gaza in his mind,” says Jenny.

“When he came back he couldn’t go back to work. He was a great father with a lot of patience. And he lost his patience with his children, with people.

“He was very silent. He didn’t sleep at night, he had nightmares. We didn’t know anything about it. He didn’t speak. Whenever we asked him he said everything is okay.”

Jenny describes Eliran as someone who was happy and friends with everyone. A father of four “with a big heart” and a big smile. But his experience of the war “injured his soul”.

Initially, he was deployed to clear bodies of people slaughtered by Hamas at the Nova Festival on 7 October and then deployed to Gaza a day later.

Eliran was active on social media and shared videos of his time in Gaza. He was commander of a unit of D9 bulldozers that destroyed buildings and tunnel shafts.

After his death, his D9 partner, Guy Zaken, told a parliamentary committee they were often shot at and they ran over hundreds of bodies.

Yet they filmed themselves smiling and singing to send to their families. Eliran shared some of those videos on social media.

Israel has levelled vast parts of Gaza. Eliran’s actions were part of a systematic campaign the UN says has damaged or destroyed over 90% of Gaza’s homes. Human rights experts warn this could be a war crime.

Eliran was pulled out of Gaza after he sustained knee injuries in an RPG (rocket-propelled grenade) attack on his bulldozer.

‘The bodies and the blood’

He was later diagnosed with PTSD (post-traumatic stress disorder) – we don’t know the cause of his trauma but in the end he couldn’t live with it. Two days before he was due to return to active duty, he took his own life.

“What he saw over there in Gaza injured his soul. You see all the bodies over there and all the blood. It hurts your soul,” says Eliran’s mother.

Israeli media is reporting at least 18 soldiers have taken their own lives so far this year.

Thousands are suffering with PTSD. And more and more reservists are quietly refusing to turn up for duty.

The IDF says supporting its service members is a top priority and it invests significant resources in doing so, including deploying mental health officers in all military units.

Tuly Flint was one of those officers. A clinical social worker and expert in trauma therapy in his professional life, and a lieutenant colonel in the military reserves, he was deployed to offer psychological support to troops who served in Gaza.

Last year, after treating many soldiers and becoming exposed to the extreme suffering of Gazans, Tuly came to the conclusion the war had no purpose and it was a crime against humanity. So he refused to continue to serve in the IDF.

“At the beginning of the war what we usually saw was simple PTSD. People who talk about the horrors they saw in the first few weeks with the massacre of Hamas,” says Tuly.

“But since the second month of the war, people started talking about what takes place on the Palestinian side.

“Even people that were not talking about Palestinians’ rights, or anything like that, they started talking about the fact that they saw bodies of children, of old people, of women.”

‘You think, are they lying to me’

I asked Tuly how soldiers feel hearing Benjamin Netanyahu‘s narrative that there is no starvation in Gaza – that the images we see are a lie.

The Israeli military bears witness to what is happening in Gaza in a way most of the world, including international journalists, still can’t.

“When you hear your government and your commanders telling things that are not true, you start thinking, are they lying to me also?” says Tuly.

“When you hear your prime minister lying about things that you saw in Gaza, things that you did … people talk about torching houses, people talk about a ‘deadline’ – not a metaphor – a deadline when people cross they will be killed no matter if they are children or women … they see people starving and they also see the chaos.”

After nearly two years of war, the human cost is weighing heavily on Israeli society. A majority of Israelis now believe that only a deal, not military pressure, will bring the remaining hostages home.

And the humanitarian crisis unfolding just across the border is becoming a source of public unease. Former military and intelligence chiefs are also now against the war.

The Commanders for Israel’s Security group (CIS) has argued, in its professional judgement, “Hamas no longer poses a strategic threat to Israel” – and has written to Donald Trump asking him to compel Benjamin Netanyahu to end the war.

Tuly Flint says there’s an erosion of trust between soldiers and those leading them.

“When you come back home and you hear so many people – former chiefs of staff, former heads of the security bodies of Israel – saying ‘this war has no aim anymore’ … you say to yourself: ‘I hear from former chiefs of staff that I’m killing hostages by waging war and my government is still sending me there?’

“When you see the pictures that you’ve seen with your own eyes and your government says ‘no this is a lie, no this is propaganda’, this makes you distrust everyone. And when you distrust everyone, why would you ask for help?”

The mental and moral burden on soldiers could be about to grow.

Despite strong objections from the IDF’s chief of staff, Israel is expanding military operations in Gaza with plans to take control of the entire territory.

We understand that references to suicide in any context can be difficult for some people. We provide details of support available from the Samaritans where any such references are included. You can find these here: call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.