Penthouse to prison: Sam Bankman-Fried’s journey from crypto king to convicted conman
Samuel Bankman-Fried’s poster in downtown San Francisco.
MacKenzie Sigalos | CNBC
Two years ago, Sam Bankman-Fried was a 30-year-old multibillionaire living in a $35 million Bahamas penthouse, partying with his pals while running one of the world’s most valuable crypto companies.
Today, he’s a 32-year-old inmate at the Metropolitan Detention Center in Brooklyn, waiting for a judge to tell him how long he’ll spend behind bars for masterminding “one of the biggest financial frauds in American history,” in the words of U.S. Attorney Damian Williams.
Bankman-Fried, the founder and former CEO of failed crypto exchange FTX, will head on Thursday to a federal court in downtown Manhattan, where U.S. District Judge Lewis Kaplan will deliver his sentencing. Prosecutors have recommended a prison sentence of 40 to 50 years.
It took jurors only about three hours of deliberations in November to find Bankman-Fried guilty of all seven criminal accounts against him. For a high-profile monthlong trial that involved nearly 20 witnesses and hundreds of exhibits, experts said at the time that they’d never seen such a speedy decision. Bankman-Fried plans to appeal his conviction and sentence.
It was a steep and swift fall from grace for Bankman-Fried, who was once hailed as a titan of the industry and had a peak net worth — on paper — of roughly $26 billion.
Indicted FTX founder Sam Bankman-Fried leaves the U.S. Courthouse in New York City, July 26, 2023.
Amr Alfiky | Reuters
Bitcoin arbitrage
It started with the Kimchi Swap.
In 2017, as a quant trader at Jane Street, Bankman-Fried noticed something funny when he looked at bitcoin pricing on CoinMarketCap.com. Instead of a uniform price across exchanges, Bankman-Fried would sometimes see a 60% difference in the value of the digital currency. His immediate instinct, he said, was to get in on the arbitrage trade — buying bitcoin on one exchange and selling it back on another, pocketing the difference.
“That’s the lowest hanging fruit,” Bankman-Fried told CNBC in September 2022.
The arbitrage opportunity was especially compelling in South Korea, where the exchange-listed price of bitcoin was significantly higher 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 Alameda Research, named after the California county that housed his first office. Bankman-Fried told CNBC that the firm sometimes made as much as a million dollars a day trading bitcoin.
Alameda’s success spurred the launch of FTX. In April 2019, Bankman-Fried co-founded FTX.com, an international cryptocurrency exchange that offered customers innovative trading features, a responsive platform and a reliable experience. FTX’s success led to a $2 billion venture fund that seeded other crypto firms.
The FTX logo soon adorned everything from Formula One race cars to a Miami basketball arena. Bankman-Fried talked about one day buying Goldman Sachs, and he became a fixture in Washington as one of the Democratic Party’s top donors.
Then the market turned.
The so-called crypto winter of 2022 wiped out hedge funds and lenders across the crypto universe. Bankman-Fried boasted that he and his enterprise were immune. Behind the scenes, Alameda was borrowing money to invest in failing digital asset firms to keep the industry afloat.
May of 2022 brought the crash of stablecoin Luna, creating a domino effect that sent crypto prices plunging and devastating other lenders.
Alameda had borrowed from lenders including Voyager Digital and BlockFi, which both ended up going bankrupt. Alameda secured its loans with FTT tokens, minted by FTX. Bankman-Fried’s empire controlled the vast majority of the available currency, with only a small amount of FTT actually circulating at any time.
Alameda marked its entire hoard of FTT at the prevailing market price despite it being a virtually illiquid asset. The fund used the same methodology with other coins as well, including Solana and Serum (a token created and promoted by FTX and Alameda), using them to collateralize billions of dollars in loans. Industry insiders called the tokens “Sam coins.”
Virtual bank run
When faced with margin calls due to falling prices, Bankman-Fried turned to FTX customers’ deposits to the tune of billions of dollars by the middle of 2022. According to the firm’s own bankruptcy filings, it possessed almost nothing in the way of record keeping.
On Nov. 2, 2022, crypto trade site CoinDesk publicized details of Alameda’s balance sheet, which showed $14.6 billion in assets. Over $7 billion of those assets were either FTT tokens or Bankman-Fried-backed coins like Solana or Serum. Another $2 billion worth were locked away in equity investments.
Investors began withdrawing their holdings from FTX, creating the threat of a virtual bank run. Alameda and FTX now both faced a liquidity crunch.
On Nov. 6, four days after the CoinDesk article, Binance founder Changpeng Zhao dropped the hammer. Binance was the first outside investor in FTX in 2019. Two years later, FTX bought back its stake with a combination of FTT and other coins, according to Zhao.
Zhao wrote in tweet that, because of “recent revelations that have came [sic] to light, we have decided to liquidate any remaining FTT on our books.” FTX executives scrambled to contain the damage, and Alameda traders managed to fend off outflows for a couple days.
On Nov. 7, Bankman-Fried tried to show confidence, tweeting, “FTX is fine. Assets are fine.” The post was deleted.
Sam Bankman-Fried, the jailed founder of bankrupt cryptocurrency exchange FTX, is sworn in as he appears in court for the first time since his November fraud conviction, at a courthouse in New York, U.S., February 21, 2024 in this courtroom sketch.
Jane Rosenberg | Reuters
Internal discussions were different. Bankman-Fried and other executives admitted to each other that “FTX customer funds were irrevocably lost because Alameda had appropriated them.” By Nov. 8, the client shortfall had grown to $8 billion. Bankman-Fried was courting outside investors for a rescue package but found no suitors.
FTX issued a pause on all customer withdrawals that day. FTT’s price plummeted by over 75%. Out of options, Bankman-Fried turned to Zhao, who announced that he’d signed a “non-binding” letter of intent to acquire FTX.com.
But a day later, on Nov. 9, Binance said it wouldn’t go through with the acquisition, citing reports of “mishandled customer funds” and federal investigations.
FTX filed for bankruptcy on Nov. 11, and Bankman-Fried resigned as CEO of FTX and associated entities. He immediately lost 94% of his personal wealth.
Sullivan & Cromwell, FTX’s longtime attorneys, approached John J. Ray, who oversaw Enron through its bankruptcy, to assume Bankman-Fried’s former position.
On Dec. 12, Bankman-Fried was arrested by Bahamian authorities and extradited to the U.S., where he was taken into custody. Federal prosecutors and regulators accused Bankman-Fried of perpetrating a fraud “from the start,” according to a filing from the SEC.
Bankman-Fried was released on a $250 million bond and was initially living under house arrest with a court-ordered ankle monitor at his parents’ home in Palo Alto, California, on the Stanford University campus. He was soon taken back into custody for alleged witness tampering.
While Bankman-Fried awaited trial, many of his closest friends and confidantes turned into key witnesses for the prosecution, leaving the former crypto billionaire to defend himself. Less than a year after his arrest, the 12-person jury found Bankman-Fried guilty on all criminal charges against him.
— CNBC’s Rohan Goswami contributed to this report.
WATCH: Prosecutors recommend 40-50 year prison sentence for Bankman-Fried
Tesla is acting dumb in a court case related to a fatal crash, and a judge is having none of it. The automaker is being sanctioned for ‘willful’ and ‘deliberate’ discovery violations.
The civil wrongful death lawsuit was filed by the families of Nicholas Garcia and his 19-year-old passenger, Jazmin Alcala, who died when Garcia’s 2021 Tesla Model 3 crashed after hitting a hump in the road while speeding through an intersection on September 13th, 2021.
The lawsuit alleged that the crash was caused or aggravated by a Tesla defect and/or improper repair, as Garcia had brought the vehicle to Tesla for service due to steering and suspension issues just days prior to the fatal accident.
Tesla had a safety recall regarding suspension issues with 2021 Model Y and Model 3 vehicles.
The case has been in litigation for 3 years, but it is stalling due to issues arising during discovery. Plaintiffs have complained that Tesla is lying and purposely misleading to avoid sharing data and documents that the court compelled Tesla to supply.
Now, a Florida judge has officially sanctioned Tesla, finding the automaker “acted willfully or with contumacious and deliberate disregard” for two separate court orders in the wrongful death lawsuit.
The blistering 9-page order, filed by Judge Michael A. Robinson on October 24, 2025, grants the plaintiffs’ first motion for sanctions and details a stunning pattern of misrepresentation and obstruction by Tesla’s legal team.
The judge granted the plaintiffs’ motion and ordered Tesla to pay all of the plaintiffs’ “reasonable attorney fees and costs” related to the misconduct, including fees for experts to review the documents Tesla dumped on them at the last minute.
Here are the judge’s most damning findings:
The judge found Tesla directly violated a November 6, 2023, court order compelling it to produce documents related to “real-world driving situations,” including driving over “speed bumps” and “uneven surfaces”.
- Tesla’s “False Claim”: At that 2023 hearing, Tesla’s counsel represented to the court that it had “already produced all documents responsive”. Tesla then produced “no additional testing documents… over the course of the next year”. The judge found this was “falsely or inexplicably” untrue.
- The “Sine Wave Test”: The judge found Tesla’s conduct “particularly troublesome” because it withheld documents for a “Sine Wave Test,” which he noted was “substantially similar to the crest in the roadway that was involved in the subject incident”.
- The “Not Credible” TIR Story: The court found that Tesla’s testing protocols required the creation of “Test Incident Reports” (“TIRs”), photos, and videos. Yet, on June 12, 2025, Tesla’s counsel responded in writing that Tesla “did not locate any TIRs”.
The judge was ruthless in his words regarding the TIR situation:
“The Court finds Tesla’s claim that it did not locate any TIRs, is not credible and appears to have been a willful and/or intentional misrepresentation.”
It’s not the first time Tesla has been accused of misrepresentation when releasing documents related to crash data. Earlier this year, plaintiffs in another wrongful death lawsuit related to a crash on Autopilot made similar complaints – the Benavides case. They ended up winning the lawsuit in trial with a $243 million verdict against Tesla.
Back to this case, the court found that “Tesla was in fact in possession of thousands of pages of TIRs”, and its own witness, Adam White, later testified they “can be easily located… by simply clicking on the hyperlinks.”
Eventually, Tesla did provide documents, but the judge ruled that the automaker’s legal team had produced about 123,000 pages of “virtually useless” documents just four days before the sanctions hearing in July.
The judge wrote in the sanction judgment:
“The Court further finds that Tesla has intentionally stripped all metadata and file names from the 123,000 plus pages… making them virtually useless to the Plaintiffs… The Court finds these acts were intended to make the review and use of these materials more difficult, time consuming and expensive for the Plaintiffs.”
The judge also had issues with Tesla’s witnesses. The automaker appears to have only made available witnesses who weren’t equipped to answer questions.
For example, Tesla produced Mr. Daniel Wood, who himself admitted that the engineer “personally responsible for the stability control” would be better suited to answer the question.
The judge found: “No such engineer was ever designated… and this Court finds this is a direct violation of its September 20, 2023 order.”
For now, Judge Robinson is only ordering Tesla to pay fees for its violations of the court orders, but it issued a strong warning to the company:
“Finally, continued violations of Court orders… may cause the Court to impose critical and severe sanctions against the offending party, including… striking pleadings or defenses.
The next hearing in the case is set for November 13th.
Electrek’s Take
There’s now a clear pattern of Tesla using questionable tactics to withhold critical information in court cases.
In this case, it’s now clear it won’t work, as the judge is having none of it. This might push Tesla to settle, as it clearly doesn’t want to release details of its test incident reports, which include what detailed findings in specific incident cases.
The Benavides case changed everything.
People are starting to catch up to Tesla’s dirty tricks, and they know exactly the data that the automaker collects. It’s only fair that both sides have access to that data in those legal battles.
This new case in Florida referenced the Benavides case regarding Tesla playing dumb in the discovery process. It’s going to be harder and harder for Tesla to do that.
It does look like Tesla’s position is becoming weaker with each legal case, and as we previously reported, the floodgates are open now, and the lawsuits are piling up.
We know of at least three more lawsuits against Tesla set for trial by the end of the year, if they don’t settle before then.
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Environment
BMW, Samsung SDI, and Solid Power join forces in the race for all-solid-state EV batteries
Samsung SDI is teaming up with BMW and US-based Solid Power (NASDAQ: SLDP) to commercialize all-solid-state EV batteries.
Samsung and BMW will launch all-solid-state EV batteries
BMW and Solid Power have been working together to develop the next-gen battery tech since 2022. Now, Korea’s Samsung SDI is joining the efforts in what’s expected to be a trilateral powerhouse.
Under the new agreement signed this week, Samsung will supply all-solid-state battery cells. Samsung will use Solid Power’s Sulfide-Based Solid Electrolyte solution, while BMW will develop the battery pack and modules.
The strategic alliance aims to take the lead in commercializing all-solid-state batteries (ASSBs). Together, they’ve created a real-world system for producing ASSB cells, pooling their expertise in batteries, automaking, and materials to bring it closer to mass production.
Solid Power’s electrolyte solution is designed for stability and maximum conductivity. By teaming up with BMW and Samsung SDI, the company said it aims to bring all-solid-state batteries closer to widespread adoption.
Samsung SDI has been ramping up efforts to bring next-gen battery technology to market. In March 2023, it opened a first-of-its-kind pilot line in South Korea and began producing prototypes by the end of the year. Samsung has already sent samples to several customers.
In May, BMW completed its first on-road tests using Solid Power’s all-solid-state battery cells in a modified i7. The German automaker expects to launch all-solid-state EV batteries in production vehicles around 2030.
Electrek’s Take
ASSBs are widely viewed as the “holy grail” of EV battery tech, promising to double driving range, halve charging times, and reduce costs.
Two of the biggest hurdles in commercializing ASSBs have been: A) developing a material that is stable, safe, and still conductive, and B) the higher costs to mass produce them. By pooling resources, BMW, Samsung SDI, and Solid Power have a real shot at actually making it a possibility.
Many others are betting on solid-state batteries as a potential game-changer. Mercedes-Benz and Volkswagen are also testing ASSBs.
Keiji Kaita, president of Toyota’s Carbon Neutral Advanced Engineering Development Center, confirmed this week at the Tokyo Motor Show that the company aims to introduce its first solid-state battery-powered EV by 2028.
Toyota said it looks to “achieve the world’s first practical use of all-solid-state batteries in BEVs” after announcing a collaboration with Sumitomo Metal Mining Co. to mass-produce the new battery tech.
Nissan recently entered into a partnership with LiCAP Technologies to commercialize ASSBs using LiCAP’s patented Activated Dry Electrode process.
China’s CATL and BYD are also planning to introduce the next-gen batteries around 2027, with mass production closer toward the end of the decade.
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