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

Published

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.

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UN data on Gaza deaths ‘disinformation’, claims head of controversial aid group

Published

9 hours ago

June 27, 2025

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UN data on Gaza deaths 'disinformation', claims head of controversial aid group

The chief of the Gaza Humanitarian Foundation (GHF) has called figures by the United Nations on people killed at aid hubs “disinformation”.

The UN said at least 410 Palestinians have been killed seeking food since Israel lifted an 11-week aid blockade on 19 May, while the Hamas-run Gaza health ministry said at least 549 people have been killed.

Johnnie Moore, executive director of GHF, told Sky News that there is a “disinformation campaign” that is “meant to shut down our efforts” in the Gaza Strip, fuelled by “some figures” coming out every day.

Mr Moore, an evangelical preacher who served as a White House adviser in the first Trump administration, said his aid group has delivered more than 44 million meals to Gazans since it began operations in May.

The controversial group, backed by Israel and the United States, has been rejected by the UN and other aid groups, which have refused to cooperate with the GHF.

The aid agencies claim Israel is weaponising food, and the new distribution system using the GHF will be ineffective and lead to further displacement of Palestinians.

They also argue the GHF will fail to meet local needs and violate humanitarian principles that prohibit a warring party from controlling humanitarian assistance.

The GHF is distributing food packages, which they say can feed 5.5 people for 3.5 days, in four locations, with the majority in the far south of Gaza.

GHF chief was ‘really political, really punchy’ in Sky News interview

Tom Cheshire

Data and forensics correspondent

@chesh

It was really political, really punchy, and I think the heart of the matter here is that the Gaza Humanitarian Foundation is too political.

The principle of aid, when applied traditionally, is that it has to be applied neutrally and that is what used to happen.

Trucks would go into Gaza, and the UN would distribute that food. Israel, for a long time, said that’s not working and they blame Hamas for that.

At a briefing by the Israeli prime minister’s office yesterday, they were saying that Hamas was still looting those aid vehicles, and it was coming out with a plan to stop that. It didn’t provide evidence for that.

When we asked for evidence, they said we shouldn’t swallow Hamas disinformation. That’s a word that’s been used. That’s very, very political.

This is a different model of doing things. And that is the concern: that rather than just handing it over to a neutral body, this is too close to Israel, it’s too close to the US, and is backed financially by the US.

What does that actually imply? Well, if you’re choosing where those sites are, it means people are going to move down there if you’re not putting them in certain places.

The number of distribution sites has dwindled. It’s attenuated. And so, actually, if there are only a few and if there are any in the south of Gaza, that encourages people to move there, that might fit a political goal as well as a humanitarian one.

Thousands of Palestinians walk for hours to reach the aid hubs and have to move through Israeli military zones, where witnesses say the Israel Defence Forces (IDF) regularly open fire with heavy barrages to control the crowds.

Both figures from the UN and the Hamas-run Gaza health ministry say hundreds of people have been killed or wounded.

In response to Mr Moore’s comments, Rachael Cummings, Save the Children’s team leader in Gaza, told Sky News that people in Gaza “are being forced into the decision to go to retrieve food from the American- and Israeli-backed, militarised, food distribution point”.

“We’re not contesting at all that there have been casualties in the Gaza Strip. I mean, there’s no ceasefire. This is an active conflict,” Mr Moore said.

“I think people may not understand as clearly what it means to operate a humanitarian operation on this scale, in an environment this complex, in a piece of land as small as the Gaza Strip, and may not appreciate that almost anything that happens in the Gaza Strip is going to take place in proximity to something.”

Mr Moore said that the GHF was not denying that there had been “those incidents”, but said the GHF was able to talk to the IDF, which would conduct an investigation, while Hamas was “intentionally harming people for he purpose of defaming what we’re doing”.

He said the GHF, “an independent organisation operating with the blessing of the US government”, was “achieving its aims” by feeding Gazans.

It comes after the US State Department announced on Thursday that it had approved $30m in funding for the GHF as it called on other countries to also support the controversial group delivering aid in Gaza.

A spokesperson from the UN office for the coordination of humanitarian affairs told Sky News that they are “open to any practical solutions that address the crisis on the ground” and are “happy” to talk to the GHF.

The spokeswoman added that the aid distribution in Gaza was not “currently a dignified process and that the format doesn’t follow humanitarian principles”.

She said that people have to walk for miles, and that there is no scalability, with aid not reaching everyone in need.

World

Japan executes ‘Twitter killer’ who murdered and dismembered nine people

Published

13 hours ago

June 27, 2025

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Japan executes 'Twitter killer' who murdered and dismembered nine people

A man guilty of murdering nine people, most of whom had posted suicidal thoughts on social media, has been executed in Japan.

Takahiro Shiraishi, known as the “Twitter killer”, was sentenced to death in 2020 for the 2017 killings of the nine victims, who he also dismembered in his apartment near Tokyo.

His execution was the first use of capital punishment in the country in nearly three years and it was carried out as calls grow to abolish the measure in Japan since the acquittal of the world’s longest-serving death-row inmate Iwao Hakamada last year.

He was freed after 56 years on death row, following a retrial which heard police had falsified and planted evidence against him over the 1966 murders of his boss, wife and two children.

Eight of Shiraishi’s victims were women, including teenagers, who he killed after raping them. He also killed a boyfriend of one of the women to silence him.

Police arrested him in 2017 after finding the bodies of eight females and one male in cold-storage cases in his apartment.

Investigators said Shiraishi approached the victims via Twitter, offering to assist them with their suicidal wishes.

Justice Minister Keisuke Suzuki, who authorised Shiraishi’s hanging, said he made the decision after careful examination, taking into account the convict’s “extremely selfish” motive for crimes that “caused great shock and unrest to society”.

“It is not appropriate to abolish the death penalty while these violent crimes are still being committed,” Mr Suzuki said.

There are currently 105 death row inmates in Japan, he added.

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EU warns Europe must start building ‘millions of drones’ to defend itself against possible Russian attacks

Published

2 days ago

June 26, 2025

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EU warns Europe must start building 'millions of drones' to defend itself against possible Russian attacks

The EU’s defence commissioner has warned Europe must be capable of building a drone army in case Russia attacks.

Military intelligence has suggested Russian forces could be ready to strike a NATO country within the next five years.

In order to defend themselves, Andrius Kubilius says Europeans will require millions of drones and need to start preparing now.

“Russia can have around five million drones, so we need to have capacities bigger than those in order to prevail,” he told Sky News, warning that if President Putin ordered an attack, the target would face a “battle-tested” Russian army with the ability to use millions of drones”.

The 2022 invasion of Ukraine sparked a revolution in drone warfare.

Facing one of the world’s strongest militaries, the Ukrainians used the cheap, adaptable technology to their advantage.

It estimates its drone units are now responsible for 80% of Russian frontline losses.

Mr Kubilius has visited Ukraine to learn the lessons from the battlefield.

Along the 1200km (745 miles) front line is an area nicknamed “Death Valley”.

“Nothing can move. Everything is controlled by drones. A traditional tank in that zone survives six minutes,” he explained.

This year, Ukraine’s expected to produce more than four million drones.

Contemplating how many units other countries would need, the commissioner used the example of his home country of Lithuania.

The former Soviet republic shares a border of around 900km (559 miles) with Russia and Belarus.

“If Ukrainians need four million for 1200km, we need something like three million drones for one year if the war is starting, if ‘Day X’ is coming,” he said.

To try to stay ahead in the fight, both Russia and Ukraine are constantly updating their drone technology.

For this reason, the commissioner believes that rather than stockpiling drones now, which will go out of date, Europe should instead build up teams of pilots, engineers, and producers ready to scale up production should the time come.

“On the European continent, at the moment, there are only two armies battle-tested with the ability to use millions of drones: one is Russian, which is planning new aggressions; another one is Ukrainian,” said Mr Kubilius.

“We need to learn a lot from Ukraine… how to organise defences against millions of drones, and also how to make your defence industry innovative,” he added.

It’s a point many in the business agree with.

German start-up STARK has been testing loitering munitions or “attack drones” ready to supply to Kyiv.

“It’s all made for easy handling for soldiers, so you don’t have to use any tools on the front line, and you just plug in the rudders,” said STARK’s senior vice president, Josef Kranawetvogl, as he quickly clicked the unit’s tail together.

He spent 18 years in the German military before making the jump to weapons production.

He says staying ahead of the enemy requires tactics and technology to be frequently updated.

“Every day you have to adapt. You have such fast development cycles in Ukraine – two or three weeks, then there’s something new upcoming and you have to be prepared for this.”

Since the start of June, Russia has repeatedly used drone swarms to attack Ukraine.

It involves hundreds of drones hammering cities in one night.

I asked Josef whether he believes NATO’s European members are ready to defend against such an attack.

“I see quite a lot of European armies starting right now to develop or to purchase unmanned systems, and it’s a good development, but it’s all about time. How can we speed up?” he replied.

Close to the border with France, another German start-up, Alpine Eagle, is testing defence drone units for Ukraine.

“This is our interceptor drone,” explained the company’s CEO, Jan-Hendrik Boelens, holding up a prototype which looks a bit like a small black plane. The interceptor is carried underneath a large grey drone.

On-board radar means it can be fired at enemy drones up to 5km (3 miles) away.

Jan thinks that could be a game changer in an aerial battle as it means hostile units could be picked off before they get close.

And he believes NATO is unprepared if one of its countries was to be hit by a wave of drones like those in Ukraine.

“We are absolutely not ready in my view,” he said.

He explained that Ukraine produced around 1.3 million drones a year last year.

“I would be surprised if NATO even bought a thousand drones last year. I think Germany procured, I don’t know, 100, maybe 200. So now you do the math on what that means and how quickly you run out of drones.

“If Ukraine consumed 1.3 million drones per year, that’s 3,000 a day. So, if you have 100 in your inventory, that would not last an hour.”

A spokesperson from the German Defence Ministry said the numbers stated “do not closely reflect reality”.

“Drones are now part of everyday life for soldiers, they are omnipresent and are used extensively in service operations and training,” they added.

Drones are a key part of NATO’s defence plan.

The alliance’s leadership has repeatedly said producing, procuring, and protecting against drones is a priority.

At the NATO summit, members agreed to boost defence spending to 5% of gross domestic product (GDP) by 2035.

In addition to increasing training and development, NATO Chief Mark Rutte has said he wants more investment in drone technology as well as boosting air defences fivefold.

“We see Russia’s deadly terror from the skies over Ukraine every day, and we must be able to defend ourselves from such attacks,” he told an audience at the summit.

Lessons from Ukraine have prompted members to embrace unmanned technology in various ways.

Britain is one of the countries pledging to put drones front and centre of its new defence plan.

Earlier this month, the government’s Strategic Defence Review outlined a new way forward for British Army warfighting based around a drone-centric 20-40-40 strategy where uncrewed systems are deployed for first wave attacks, before tanks, attack helicopters and other manned platforms arrive on the battlefield.

In essence, the new weapons mix would be 20% traditional heavy platforms (like tanks), 40% single-use expendable drones and munitions, and the remaining 40% reusable, high-end drones.

It’s been confirmed that an extra £2bn will be spent on army drones this parliament.

Defence Secretary John Healey said Britain’s adversaries were working more in alliance and technology was changing how war was fought.

“Drones now kill more people than traditional artillery in the war in Ukraine and whoever gets new technology into the hands of their armed forces the quickest will win,” he said.

This week, the prime minister announced a deal with Ukraine to co-produce drones.

Germany and Denmark have made similar agreements with the German Ministry of Defence, telling Sky News that drones are a top priority.

In a drone showroom in central Berlin, we meet Sven Weizenegger, head of the German military’s cyber innovation hub.

He said they have noticed a boom in pitches from potential suppliers.

Every day, his department receives up to 20 enquiries from companies asking how their products could be used by the military.

He believes things need to move more quickly so soldiers get weapons faster.

“We are very advanced in the innovation process. That means we have a lot of ideas and many companies that are ready to deliver,” he explained. “Unfortunately, what we are not good at right now, due to our current processes, is getting these things into real operations, into frontline use. We need to fix that.”

Germany has promised to turbo-charge defence spending, with the Chancellor pledging to create the “strongest conventional army in Europe”.

Plans announced this week include boosting unmanned systems and air defences.

The German Ministry of Defence said it couldn’t reveal stock levels due to security, but a spokesperson confirmed the country is investing in a range of different units, including signing two contracts for attack drones.

“We are procuring not just a few but quite large quantities and testing them directly with the troops,” the spokesperson added.

However, they agreed with the EU defence commissioner that rather than stockpiling tech which would go out of date, it was better to have a system in place to allow for large quantities to be made quickly in the event of war.

In May, the EU approved a €150bn (£125bn) loan scheme to boost defence production across the bloc.