The meteoric rise and even sharper fall of Sam Bankman-Fried

Published

2 months ago

March 29, 2024

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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.

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.

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.

US

P Diddy: Rapper Sean Combs says video of him assaulting singer Cassie is ‘inexcusable’

Published

13 hours ago

May 19, 2024

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P Diddy: Rapper Sean Combs says video of him assaulting singer Cassie is 'inexcusable'

Sean “Diddy” Combs has said CCTV footage showing him attacking singer Cassie in a hotel hallway in 2016 is “inexcusable” and that he is “disgusted”.

Warning: This story includes images readers may find distressing

“It’s so difficult to reflect on the darkest times in your life, but sometimes you got to do that,” the rapper said in a video on Instagram.

“I was f***** up – I mean I hit rock bottom – but l make no excuses. My behaviour on that video is inexcusable. I take full responsibility for my actions in that video. I was disgusted. I was disgusted then when I did it. I’m disgusted now.

“I went and I sought out professional help. I got into going to therapy, going to rehab. I had to ask God for his mercy and grace. I’m so sorry. But I’m committed to be a better man each and every day. I’m not asking for forgiveness. I’m truly sorry.”

The 54-year-old, whose homes in Los Angeles and Miami were raided by Homeland Security Investigations agents in March, has faced a series of public allegations of physical and sexual violence.

Footage obtained by CNN this week shows Combs – also known as P Diddy and Puff Daddy – wearing only a white towel as he punches and kicks Cassie in a Los Angeles hotel hallway on 5 March 2016.

The footage also shows Combs shoving and dragging the singer and throwing a vase in her direction.

Cassie, an R&B singer whose legal name is Cassandra Ventura, was his protege and girlfriend at the time.

The 37-year-old sued Combs in November with the lawsuit accusing him of rape and violent behaviour during their decade-long relationship.

The suit was settled the next day, but it led to intense scrutiny of Combs, who has since been named as a defendant in several sexual abuse lawsuits, along with a federal criminal sex-trafficking investigation that led authorities to the raid in March.

He denied the allegations in the lawsuits, but neither he nor his representatives had responded to the newly-emerged video until Sunday.

After the footage emerged, Douglas H Wigdor, lawyer for Ms Ventura, said in a statement in response: “The gut-wrenching video has only further confirmed the disturbing and predatory behaviour of Mr Combs.

“Words cannot express the courage and fortitude that Ms Ventura has shown in coming forward to bring this to light.”

Combs’ Instagram apology is the hip hop mogul’s most direct response after six months of allegations that have threatened his reputation and career.

Previous statements have been released through his lawyers.

The security camera video, dated 5 March 2016, closely resembles the description of an incident at an InterContinental Hotel in the Century City area of Los Angeles described in Ms Ventura’s November lawsuit.

The suit alleges that Combs paid the hotel $50,000 (around £39,000) for the security video immediately after the incident.

Neither he nor his representatives have addressed that specific allegation.

CNN did not say how it obtained the footage.

Combs is not in danger of being criminally prosecuted for the beating.

The statutes of limitations for the assault and battery charges he would have been likely to face expired years ago.

US

Adam Boulton: ‘Like those old guys on The Muppets’ – bad sign for democracy as Trump and Biden call shots on how they will debate

Published

1 day ago

May 19, 2024

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Adam Boulton: 'Like those old guys on The Muppets' - bad sign for democracy as Trump and Biden call shots on how they will debate

That was easy. Donald Trump and Joe Biden duelled briefly over the airwaves about debating.

“Any time, any place, anywhere,” the Republican candidate had challenged. “Make my day, pal” the president retorted movie-style.

In just a matter of hours the two men agreed to Joe Biden‘s proposal for two televised presidential debates before the election on 5 November – at CNN HQ in Atlanta on 27 June and on ABC forum on 10 September.

There will be more role-playing between now and the agreed showdowns. Biden has already rejected Trump’s counter-offer of two further debates including one on Fox News.

But once again the US does seem on course to hold debates between the frontrunners for the White House, as it has in most of the presidential cycles since JFK took on Richard Nixon in 1960. The UK has only managed to hold proper equivalent prime ministerial leaders debates in 2010.

The two candidates will confront each other in different circumstances than previously. They will meet earlier in the cycle of the election year and without the usual rules.

Both sides have agreed to cold shoulder the widely respected Commission on Presidential Debates (CPD), which had proposed three debates before mass audiences closer to polling day.

The Republicans and the Democrats have decided that the CPD model is outdated because of the changing nature of campaigning and voting, the evolving demands of the media and above all because of the unique nature of this campaign in which the two main candidates have become clear so early in the year and in which they are the oldest in America’s political history.

“It’ll be entertaining, informative. Like those two old guys on The Muppets,” former Republican presidential candidate Mitt Romney quipped to Huffpost.

The traditional CPD debates are one of the many norms of US politics which have been subverted by Donald Trump.

According to opinion polls held afterwards as to “who won the debate?”, he is a poor debater.

He “lost” all three of his encounters with Hillary Clinton in 2016 and both of his debates against Biden in 2020.

Biden also “won” both his vice presidential debates against Sarah Palin in 2008 and Paul Ryan in 2012.

Yet what is remembered is Trump’s behaviour. He roamed about the stage and loomed threatening behind Hillary Clinton.

He invited her husband’s alleged ex-girlfriends to sit in the front row of the audience.

He called Biden “demented” before their first debate and abused him to his face, saying: “There’s nothing smart about you Joe.”

Trump refused to abide by the rules and talked over the moderator and Biden.

A senior White House correspondent summed up their first presidential debate as “a hot mess, inside a dumpster fire, inside a train wreck”.

Trump refused to take the required COVID test to take part and then developed it, resulting in the cancellation of their next scheduled debate.

At their final debate, a technician was employed to switch off the participants’ microphones except during their allotted speaking time.

It is usually the underdog who issues the challenge to debate. Biden has been trailing narrowly in key opinion polls and needs the debates to demonstrate that he is still up to the job at the age of 81.

Many observers think that the president is actually showing fewer signs of cognitive impairment than Trump, who is only four years younger and whose rally speeches are becoming increasingly incoherent rants.

When the two men debate this summer, Biden may well “beat” Trump again. But Trump’s antics could well dominate – and they certainly impress some voters.

The problems with the debates four years ago explain why neither side wants to put the commission in charge this time.

The Republicans have accused the CPD of bias and the Democrats blame it for not keeping order.

Significantly the first debate this year, on CNN, will be in a studio without a live audience for the first time in the US presidential history.

Both sides also wanted to have their encounters earlier in the summer because there is an increasing trend to vote earlier, with some states opening their polls as early as September.

The agreed debates will be head-to-heads between Biden and Trump, which suits them both because Robert F Kennedy Jnr is working flat out to get on enough state ballots to qualify for a CPD debate.

Polling suggests he would take votes from each of them and could have a decisive impact on who wins.

President Biden gift wrapped his debate invitation with the cheeky tag “I hear you are free on Wednesdays” because the criminal court where Trump is currently on trial does not sit on Wednesdays.

The dates they’ve agreed are actually a Tuesday and a Thursday but the dig still stands.

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The first Biden-Trump debate in 2020 drew 71 million viewers in the US making it the third most-watched presidential debate behind only Trump and Hillary Clinton in 2016 and Ronald Reagan versus Jimmy Carter in 1980.

But average audiences for the debates are diminishing.

Nate Silver, a leading political statistician, points out they are one of the few fixed points in a campaign which can have some direct impact today when “almost nothing moves the polls these days because the candidates are so well known and everybody is so partisan”.

America’s news networks have found out that Trump drives up ratings, even when the station’s editorial policy opposes him.

CNN gave his rallies saturation coverage in 2016 and apologised more recently when Trump was allowed to monopolise a “town hall” on the channel.

Now the networks and their guest debaters have parted company with the protections provided by the CPD and its heavily regulated debates before live audiences on university campuses.

They will be under pressure to show they can provide fair and informative programmes for their viewers and not just entertainment.

The precedents for success are not good from the UK, where broadcasters abandoned working together following a rigid formula after 2010.

By competing against each other they effectively gave the whip hand to the politicians, who were free to withdraw or bestow their favours.

Since then the subsequent debate-style election programmes have not made a significant informative or influential impact on the campaigns. The viewers, a.k.a the electorate, have lost out.

This year the two people vying to be the leader of the free world are calling the shots on how they will debate.

It is hardly encouraging for democracy that a senior senator like Mitt Romney’s first comparison is with The Muppet Show.

US

Dabney Coleman, actor who starred in Boardwalk Empire and 9 to 5, dies

Published

1 day ago

May 19, 2024

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Dabney Coleman, actor who starred in Boardwalk Empire and 9 to 5, dies

Lily Tomlin, Morgan Fairchild and Ben Stiller have led tributes to “one-of-a-kind” actor Dabney Coleman following his death aged 92.

Coleman made his career playing comedic villains, mean-spirited bosses and villains in films including 9 to 5 and Tootsie, as well as playing Commodore Louis Kaestner in Boardwalk Empire.

Lily Tomlin, who starred alongside him in 9 To 5 with Jane Fonda and Dolly Parton, said: “We just loved him.”

In her post to X, the actress shared a photo of her character Violet Newstead dressed in a Snow White costume beside a tense-looking Coleman as her egotistical boss Franklin Hart Jr.

Morgan Fairchild, who starred in Falcon Crest and Friends, described Coleman as a “great one”.

“So very sorry to hear of the death of the wonderful #DabneyColeman”, she wrote on X alongside a black and white photo of them together.

“We went out for a bit in the ’80s and I adored him. This town has lost one of a kind!”

Coleman “took his last earthly breath peacefully and exquisitely” in his Santa Monica home on Thursday, his daughter said in a statement on Friday on behalf of the family.

“My father crafted his time here on Earth with a curious mind, a generous heart and a soul on fire with passion, desire and humour that tickled the funny bone of humanity”, she said.

“As he lived, he moved through this final act of his life with elegance, excellence and mastery.”

Ben Stiller, Zoolander and Meet The Parents actor, praised Coleman for paving the way for character actors.

“The great Dabney Coleman literally created, or defined, really – in a uniquely singular way – an archetype as a character actor.

“He was so good at what he did it’s hard to imagine movies and television of the last 40 years without him.”

Coleman starred in a number of films and TV series in the 1960s, then made his breakthrough as a corrupt mayor in the satirical soap opera Mary Hartman, Mary Hartman, in 1976.

His film credits include a computer scientist in WarGames, Tom Hanks’ father in You’ve Got Mail and a chief firefighter in The Towering Inferno.

He won a best actor Golden Globe for The Slap Maxwell Story and an Emmy for best supporting actor in Peter Levin’s 1987 legal drama Sworn To Silence.

Coleman also won two Screen Actors Guild Awards as part of the cast of crime drama Boardwalk Empire and received Emmy and Golden Globe nominations for his starring role in the NBC sitcom Buffalo Bill.