The meteoric rise and even sharper fall of Sam Bankman-Fried
Sam Bankman-Fried, also known by the initials SBF, has tumbled from crypto king to convicted fraudster.
The founder of the FTX cryptocurrency exchange was found guilty in November of defrauding customers of his cryptocurrency exchange out of billions of dollars.
A Manhattan jury convicted him on all seven counts after a month-long trial.
FTX collapsed last November, shocking financial markets and wiping out the crypto tycoon’s estimated $26bn (£21bn) fortune.
But how did the 31-year-old go from such astronomic financial heights to being sentenced to 25 years in prison?
His early life
Bankman-Fried grew up in California’s wealthy San Francisco Bay area, where he attended a $56,000-a-year school.
Both his parents were professors at the prestigious Stanford Law School.
He studied at the Massachusetts Institute of Technology (MIT) where he lived in a group house called Epsilon Theta, which promotes itself as an alcohol-free community “known for liking beanbags, board games, puzzles, and rubber ducks”.
He once told an FTX podcast he did not apply himself in classes and did not know what to do with his life for most of college.
Bankman-Fried graduated in 2014 with a major in physics and a minor in maths.
Vegan, teetotaller, effective altruist
Bankman-Fried didn’t lose the values of Epsilon Theta after graduation, if what he has told journalists is to be believed.
He pushed back against claims of drug and alcohol use at FTX, telling the New York Times’ DealBook Summit there were no “wild parties” at the company.
“When we had parties, we played board games and, you know, 20% of people would have three-quarters of a beer each or something like that. And you know, the rest of us would not drink anything,” he said.
He is also known for being a vegan – and has stuck to his principles in jail despite not being provided with vegan meals, according to his lawyers.
They said he was “literally subsisting” on bread, water and peanut butter in the run-up to his trial.
His veganism is linked to a history of animal rights activism – which in turn is bound up with the effective altruism movement.
While studying, he was reportedly considering a career in animal welfare, having organised a protest against factory farming in his first year of college.
But he met with Will MacAskill, one of the movement’s leaders, who told him he could make more of an impact by finding a career that paid well, and then donating money to charity.
This is known as “earning to give” and it’s one of the central pillars of effective altruism, a movement that seeks to do good by using resources effectively.
When Bankman-Fried took a job at quantitative trading firm Jane Street after graduating, he said he donated about half of his salary to charities, including animal welfare organisations.
He talked about plans to eventually donate most of the money made in his lifetime, with a focus on “long-termism” or safeguarding the future of humanity.
Read more:
The rise and fall of Sam Bankman-Fried
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Sam Bankman-Fried after his arrest in the Bahamas
The start of the crypto king
After three years at Jane Street, Bankman-Fried quit with his eye on taking more risks to make more money.
He landed on crypto as the best way of getting rich quickly.
It started with Bitcoin. He realised it was selling for more in Asia than it was in the US – and figured if he could buy it in one place and sell it in another he could turn an easy profit.
“I got involved in crypto without any idea what crypto was,” he told Forbes. “It just seemed like there was a lot of good trading to do.”
In 2017 he co-founded cryptocurrency trading firm Alameda Research, bringing in other recruits from the effective altruism community and reportedly donating half of the company’s profits to charity.
At its peak, the company was moving $25m in Bitcoin each day.
Two years later, he founded FTX, an exchange which allowed users to buy and sell buy cryptocurrencies, and moved to Hong Kong.
The FTX boom
From Hong Kong, operations moved to the tax haven of the Bahamas, where Bankman-Fried bought a multimillion-dollar waterfront penthouse.
The luxury property, overlooking an area used for filming the scene where Daniel Craig famously emerged from the water as James Bond in Casino Royale, was also used as a home office for Bankman-Fried and up to nine of his FTX devotees.
In 2021, Forbes described him as “the richest twentysomething in the world” with a net worth of $22.5bn, putting him at 32 on The Forbes 400 rich list.
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What went wrong for FTX’s Sam Bankman-Fried?
Relationship with Caroline Ellison
Bankman-Fried had an on-again, off-again relationship with Caroline Ellison, having met her while working at Jane Street.
He persuaded her to join Alameda Research. As a fellow effective altruist, she was also attracted by the prospect of earning money to give to charity.
The pair lived together in the Bahamas penthouse.
Ellison, who became Alameda’s co-chief executive in 2021 and assumed full control last year, has pleaded guilty to fraud charges and agreed to cooperate with prosecutors.
She appeared to have been unhappy at Alameda long before its collapse.
In July, the New York Times published an article citing her personal writings from early 2022, in which she described feeling “unhappy and overwhelmed” at work and “hurt/rejected” by a breakup with Bankman-Fried.
Bankman-Fried was jailed for allegedly sharing the writings with the reporter, with a judge saying it likely amounted to witness tampering.
Political donations
Bankman-Fried was the second-largest individual donor to Joe Biden in the 2020 election cycle.
He was also among the largest donors to Democratic candidates and causes ahead of the November 2022 midterm elections.
Prosecutors said he used $100m in stolen FTX deposits to fund those donations, which he hoped would spur the passage of crypto-friendly legislation.
He was initially charged with conspiring to break US campaign finance laws, but this charge was dropped after The Bahamas said it was not part of its agreement to extradite him.
However, a judge has said the political donations can still be discussed at the trial because they are “intertwined
inextricably” with the fraud charges.
The trial
After he was arrested in the Bahamas in December and extradited to the US, Bankman-Fried was found guilty of seven charges of fraud and conspiracy stemming from the collapse of FTX.
Bankman-Fried – who pleaded not guilty to two counts of fraud and five of conspiracy – clasped his hands together as the verdict was delivered.
He admitted “mistakes” in running FTX when he testified during the month-long trial, but denied stealing at least $10bn of his customers’ money.
Prosecutors claimed he used the funds for risky bets at his hedge fund Alameda Research – with a huge financial black hole emerging when crypto markets fell sharply.
He was sentenced to 25 years in prison on 28 March.
The dad of a missing Hawaiian woman who vanished took his own life after he flew to LA to try to find her.
Ryan Kobayashi had travelled from Hawaii to LA, retracing the steps his daughter Hannah Kobayashi took earlier this month before she went missing.
On 8 November, the 31-year-old Ms Kobayashi travelled from Hawaii to LA, on her way to New York, but missed her connecting flight.
Hannah Kobayashi. Pic: Instagram/Hannah Kobayashi
The 30-year-old budding photographer. Pic: Missing Persons of America
Her family initially thought she would catch another one but she told them she had begun to explore the area.
Then, on 11 November, the family began receiving “strange and cryptic, just alarming” text messages from her phone.
They referenced her being “intercepted” as she got on a train and being scared someone was trying to steal her identity.
“Once the family started pressing, she went dark,” her aunt Larie Pidgeon said.
Sky News US partner network NBC News reported that one of the texts received by Ms Kobayashi’s family read: “I got tricked pretty much into giving away all my funds for someone I thought I loved.”
Mr Kobayashi flew out to LA to try and find her, searching with other family members and volunteers.
However, he was found dead on Sunday in a car park near the LA International Airport having taken his own life, police and his family said.
In a statement, the family said: “After tirelessly searching throughout Los Angeles for 13 days, Hannah’s father, Ryan Kobayashi, tragically took his own life.
“This loss has compounded the family’s suffering immeasurably.”
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They asked for privacy as they grieved and requested the public “maintain focus on the search for her. Hannah IS still actively missing and is believed to be in imminent danger. It is crucial for everyone to remain vigilant in their efforts to locate Hannah.”
Ms Kobayashi is a budding photographer from Maui and had been heading to New York for a new job and to visit relatives.
The RAD Movement, a network aimed at helping missing and exploited people, said in an appeal that in footage, Ms Kobayashi “does not appear to be in good condition and she is not alone”.
Ms Pidgeon added that the search effort has been focused in the downtown area of LA.
Anyone feeling emotionally distressed or suicidal can 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.
A motion has been filed to drop the charges against Donald Trump of plotting to overturn the 2020 US presidential election result.
Mr Trump was first indicted on four felonies in August 2023: Conspiracy to defraud the United States, conspiracy to obstruct an official proceeding, obstruction of and an attempt to obstruct an official proceeding, and conspiracy against rights.
The president-elect pleaded not guilty to all charges and the case was then put on hold for months as Mr Trump’s team argued he could not be prosecuted.
Special Counsel Jack Smith. Pic: Reuters
Donald Trump supporters storm the US Capitol
On Monday, prosecutors working with special counsel Jack Smith, who had led the investigation, asked a federal judge to dismiss the case over long-standing US justice department policy, dating back to the 1970s, that presidents cannot be prosecuted while in office.
It marks the end of the department’s landmark effort to hold Mr Trump accountable for the attack on the US Capitol on 6 January 2021 when thousands of Trump supporters assaulted police, broke through barricades, and swarmed the Capitol in a bid to prevent the US Congress from certifying Joe Biden’s 2020 election victory.
Mr Smith’s team had been assessing how to wind down both the election interference case and the separate classified documents case in the wake of Mr Trump’s election victory over vice president Kamala Harris earlier this month, effectively killing any chance of success for the case.
In court papers, prosecutors said “the [US] Constitution requires that this case be dismissed before the defendant is inaugurated”.
They said the ban [on prosecuting sitting presidents] “is categorical and does not turn on the gravity of the crimes charged, the strength of the government’s proof, or the merits of the prosecution, which the government stands fully behind”.
Mr Trump, who has said he would sack Mr Smith as soon as he takes office in January, and promised to pardon some convicted rioters, has long dismissed both the 2020 election interference case and the separate classified documents case as politically motivated.
Trump supporters try to break through a police barrier at the Capitol in Washington. Pic: AP
He was accused of illegally keeping classified papers after leaving office in 2021, some of which were allegedly found in his Mar-a-Lago home in Florida.
The election interference case stalled after the US Supreme Court ruled in July that former presidents have broad immunity from prosecution, which Mr Trump’s lawyers exploited to demand the charges against him be dismissed.
Mr Smith’s request to drop the case still needs to be approved by US District Judge Tanya Chutkan.
No date had been set for a trial.
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At least 1,500 cases have been brought against those accused of trying to overthrow the election result on 6 January 2021, resulting in more than 1,100 convictions, the Associated Press said.
More than 950 defendants have been sentenced and 600 of them jailed for terms ranging from a few days to 22 years.
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