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.
Naomi Osaka appeared in an ad for FTX
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.
Pic: AP
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.
Changpeng Zhao. Pic: AP
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.
Read more: Founder of bankrupt crypto firm breaks his silence
Pic: ABC News via AP
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.”
Read more: Major crypto exchange FTX begins bankruptcy proceedings in US
The value of FTX’s FTT token has collapsed over the past month. Pic: CoinMarketCap
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.
The Pope has appeared before cheering crowds at the Vatican.
It was the pontiff’s first official public appearance since he was released from hospital a fortnight ago.
Pope Francis, 88, had spent five weeks in Rome’s Gemelli hospital as he was treated by doctors for a life-threatening bout of double pneumonia.
The Pope, in what was a previously unannounced move, entered St Peter’s Square in a wheelchair shortly before noon local time at the end of the celebration of a mass for the Catholic Church’s Jubilee year.
The pontiff arrives at the end of a mass. Pic: AP
In front of the main altar for the service, Francis waved to applauding crowds, before briefly talking.
Speaking in a frail voice while receiving oxygen via a small hose under his nose, he said: “Happy Sunday to everyone. Thank you so much.”
A message prepared by the Pope and released by the Vatican said he felt the “caring touch” of God.
“On the day of the jubilee of the sick and the world of healthcare, I ask the Lord that this touch of his love may reach those who suffer and encourage those who care for them,” said the message.
“And I pray for doctors, nurses and health workers, who are not always helped to work in adequate conditions and are sometimes even victims of aggression.”
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Pope Francis is cheered by crowds on Sunday. Pic: AP
Francis had been out of public view since 23 March, when he had given a short greeting before being discharged from hospital.
The pontiff’s voice sounded stronger this time than when he addressed well-wishers outside Gemelli and struggled to speak.
Francis usually offers a weekly noon-time prayer in St Peter’s Square on Sundays.
But he has not been able to do this since 9 February, before going to hospital.
He was admitted to Gemelli on 14 February for a bout of bronchitis that developed into double pneumonia.
This is a particularly serious condition for him as he had pleurisy as a young adult and had part of one lung removed.
World
IDF says it mistakenly identified Gaza aid workers as threat – after video of deadly attack emerges
The IDF says it mistakenly identified a convoy of aid workers as a threat – following the emergence of a video which proved their ambulances were clearly marked when Israeli troops opened fire on them.
The bodies of 15 aid workers – including eight medics working for the Palestine Red Crescent Society (PRCS) – were found in a “mass grave” after the incident, according to the head of the UN Office for Coordination of Humanitarian Affairs Jonathan Whittall.
The Israeli military originally claimed an investigation found the vehicles did not have any headlights or emergency signals and were therefore targeted as they looked “suspicious”.
But video footage obtained by the PRCS, and verified by Sky News, showed the ambulances and a fire vehicle clearly marked with flashing red lights.
In a briefing from the IDF, it said the ambulances arrived in the Tel Sultan neighbourhood in Rafah shortly after a Hamas police vehicle drove through.
Palestinians mourning the medics after their bodies were recovered. Pic: Reuters
An IDF surveillance aircraft was watching the movement of the ambulances and notified troops on the ground. The IDF said it will not be releasing that footage.
When the ambulances arrived, the soldiers opened fire, thinking the medics were a threat, according to the IDF.
The soldiers were surprised by the convoy stopping on the road and several people getting out quickly and running, the IDF claimed, adding the soldiers were unaware the suspects were in fact unarmed medics.
An Israeli military official would not say how far away troops were when they fired on the vehicles.
The IDF acknowledged that its statement claiming that the ambulances had their lights off was incorrect, and was based on the testimony from the soldiers in the incident.
The newly emerged video footage showed that the ambulances were clearly identifiable and had their lights on, the IDF said.
The IDF added that there will be a re-investigation to look into this discrepancy.
Analysis: Video undermines Israel’s account of aid worker deaths
The clip is filmed through a vehicle windscreen – with three red light vehicles visible in front
Addressing the fact the aid workers’ bodies were buried in a mass grave, the IDF said in its briefing this is an approved and regular practice to prevent wild dogs and other animals from eating the corpses.
The IDF could not explain why the ambulances were also buried.
The IDF said six of the 15 people killed were linked to Hamas, but revealed no detail to support the claim.
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Bodies of aid workers found in Gaza
The newly emerged footage of the incident was discovered on a phone belonging to one of the workers who was killed, PRCS president Dr Younis Al Khatib said.
“His phone was found with his body and he recorded the whole event,” he said. “His last words before being shot, ‘Forgive me, mom. I just wanted to help people. I wanted to save lives’.”
Sky News used an aftermath video and satellite imagery to verify the location and timing of the newly emerged footage of the incident.
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Aid worker attacks increasing
It was filmed on 23 March north of Rafah and shows a convoy of marked ambulances and a fire-fighting vehicle travelling south along a road towards the city centre. All the vehicles visible in the convoy have their flashing lights on.
The footage was filmed early in the morning, with a satellite image seen by Sky News taken at 9.48am local time on the same day showing a group of vehicles bunched together off the road.
World
France needs to sort its political mess – or populist winds blowing from the US will strengthen
Contemplating the turmoil sown by the return of President Trump, nobody could deny that the results of leadership elections in major nations matter to the rest of the world.
Take just the members of the G7 – so-called rich, industrialised democracies. Italy elected Giorgia Meloni in 2022, confirming the rise of the far-right. She was not only Italy’s first female leader, she was also the first from a neo-fascist party since Mussolini.
The arrival of Donald Trump and Sir Keir Starmer changed the complexion of politics in the US and the UK last year. Germany elected a more hawkish chancellor in waiting this spring.
Barring accidents, the next potentially transformative election in what used to be called the “Western alliance” will not be for two years.
France is due to elect a new president to succeed Emmanuel Macron in the summer of 2027. The contest is already plagued by undercurrents of disruption, conflict between politicians and the law, and populism – similar to the fires burning elsewhere in the US and Europe.
This week French judges banned the frontrunner to win the presidency from running for office for the next five years. It looked as though they have knocked Marine Le Pen out of the race.
Nobody, least of all her, the leader of the far-right Rassemblement National (RN), knows what is going to happen next in French politics.
In opinion polls just over half of the French population, between 54% and 57%, agreed that justice had run its course. “The law is the same for everyone,” President Macron declared.
After lengthy consideration by a tribunal of three judges, Le Pen and nine other former RN MEPs were found guilty of illegally siphoning off some €4.4m (£3.7m) of funds from the European Parliament for political operations in France, not for personal gain.
Le Pen was sentenced to a five-year ban and four years in prison, not to begin before the appeals process had been concluded. Even then that sentence in France would normally amount to two years’ house arrest wearing an ankle alarm.
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Marine Le Pen hits out at ban
French presidents, such as Jacques Chirac and Nicolas Sarkozy, have been convicted before. Controversy is flaring because Le Pen was given an extra punishment: the immediate ban on running for political office, starting this week.
Le Pen and Jordan Bardella, her second in command at RN, likened the ban to a “nuclear bomb” and a “political death penalty”. Speaking in L’Assemblee Nationale, of which she is still a member, Le Pen identified herself with Alexei Navalny, the dissident leader murdered in Russia, and Ekrem Imamoglu, the recently imprisoned Turkish opposition leader and mayor of Istanbul.
The ban was imposed at the discretion of the chief judge Benedicte de Perthuis, a former business consultant, Francois Bayrou, France’s Macronist prime minister admitted he was “troubled” by the verdict. Not surprisingly perhaps from him, since the prosecution is appealing against verdicts in a similar case of political embezzlement, in which Bayrou’s party was found guilty but he was acquitted, escaping any possibility of a ban.
Bayrou is expected to be a candidate for the presidency. Meanwhile, RN has the power to bring down his government since it is the largest party in the Assembly, with 37%, but was kept out of power by a coalition.
Marine Le Pen and Jordan Bardella. File pic: AP
Populist forces on both sides of the Atlantic rushed to support Marine Le Pen. Matteo Salvini in Italy, Geert Wilders in the Netherlands and Vladimir Putin‘s spokesperson Dmitry Peskov all denounced what they saw as a “violation of democratic norms”. Hungary’s Viktor Orban said on X “Je suis Marine Le Pen”. Orban’s post came on the same platform Donald Trump Jr posted that “JD Vance was right about everything”, a reference to the US vice president’s speech at the Munich Security Conference in which he claimed Europe was silencing populist opposition.
President Trump weighed in: “The Witch Hunt against Marine Le Pen is another example of European Leftists using Lawfare to silence Free Speech… it is the same ‘playbook’ that was used against me.”
Le Pen has called for bans and tough sentences for corrupt politicians from other parties. In France, mainstream commentators are accusing her of hypocrisy and “Trumpisme” for attacking the courts now.
They also allege, or rather hope, that RN’s anger is endangering Marine Le Pen’s drive to make her party respectable with her so-called “wear a neck-tie strategy”, designed to dispel the loutish, racist image of her father’s Front National.
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Le Pen leaves court after guilty verdict
For all the protests, justice and politics are now inextricably mixed in France. A ban from political campaigning would be pointless for most convicts, who have no political ambitions.
Any suggestion that Le Pen was just being treated like any other citizen was dispelled when it was announced that her appeal would be speeded up to take place next summer. The president of the court de cassation conceded: “Justice knows how to adjust to circumstances… an election deadline in this case.”
The ban could be lifted in time to give Le Pen a year to stand for the presidency. At this stage, a full acquittal seems unlikely, given the weight of evidence against RN. That is awkward for her and her party because, presumably, she would be campaigning while under house arrest.
The best course of action for 29-year-old Jordan Bardella, Le Pen’s apparent successor, or “Dauphin”, would be to stick with her now. He would gain little if he split RN by insisting she is fatally wounded.
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If she loses her appeal in a year’s time, his loyalty and indignation would be likely to boost his candidacy. Conventional wisdom is that without a lift he may be slick, but is too callow and too square to stand a chance of becoming president in 2027.
The far right in France is no different from the far right elsewhere – prone to internal rivalries and in-fighting.
The craggy intellectual Eric Zemmour came fourth in the first round in the last presidential contest in 2022. Back then he had the support of Marion Marechal-Le Pen, Marine Le Pen’s flighty niece. The two have since fallen out and may separately bid to carry the far-right torch.
Macron is riding high as an international statesman but he is unpopular at home. Even if he wanted to, he cannot stand again because of term limits.
His attempts to spawn an heir apparent have failed. The 34-year-old prime minister Gabriel Attal led Ensemble to crushing defeat in last year’s parliamentary elections.
Current prime minister Bayrou, and former prime minister Edouard Philippe, will probably make a bid for the centre-right vote. Bruno Retailleau, the trenchantly hardline interior minister, looks a stronger candidate for the Gaullist Les Republicains.
Read more:
Le Pen’s political career is in tatters
European far-right welcomes Trump 2.0
In the last presidential contest, Jean-Luc Melenchon of the hard-left La France Insoumise came third. He may fancy his chances of getting into the final two in 2027 against a right-wing candidate, unless the Socialists get it together. Or perhaps he may let through two finalists from the right and the extreme right.
It is a mess.
France and Europe need effective leadership from a French president. The unnecessary judicial suspension of Marine Le Pen’s candidacy has simply generated uncertainty. Her supporters are outraged and her foes no longer know who they are fighting against.
The French establishment thinks it will all blow over. Just as likely the controversy in France will strengthen the populist winds blowing across the continent and the US.
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