Sam Bankman-Fried, additionally identified by the initials SBF, has tumbled from crypto king to courtroom defendant.
The trial of the founding father of the FTX cryptocurrency alternate is because of begin on Tuesday 3 October.
The fraud fees towards him – which he denies – stem from the November 2022 collapse of his now-bankrupt enterprise.
But how did the 31-year-old go from such astronomic monetary heights to dealing with a authorized struggle for freedom?
His formative years
Bankman-Fried grew up in California’s rich San Francisco Bay space, the place he attended a $56,000-a-year faculty.
Both his mother and father have been professors on the prestigious Stanford Law School.
He studied on the Massachusetts Institute of Technology (MIT) the place he lived in a gaggle home known as Epsilon Theta, which promotes itself as an alcohol-free neighborhood “known for liking beanbags, board games, puzzles, and rubber ducks”.
He as soon as informed an FTX podcast he didn’t apply himself in lessons and didn’t know what to do together with his life for many of school.
Bankman-Fried graduated in 2014 with a significant in physics and a minor in maths.
Vegan, teetotaller, efficient altruist
Bankman-Fried did not lose the values of Epsilon Theta after commencement, if what he has informed journalists is to be believed.
He pushed again towards claims of drug and alcohol use at FTX, telling the New York Times’ DealBook Summit there have been no “wild parties” on the firm.
“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 mentioned.
He can be identified for being a vegan – and has caught to his rules in jail regardless of not being supplied with vegan meals, based on his legal professionals.
They mentioned he was “literally subsisting” on bread, water and peanut butter within the run-up to his trial.
His veganism is linked to a historical past of animal rights activism – which in flip is sure up with the efficient altruism motion.
While learning, he was reportedly contemplating a profession in animal welfare, having organised a protest towards manufacturing facility farming in his first 12 months of school.
But he met with Will MacAskill, one of many motion’s leaders, who informed him he may make extra of an impression by discovering a profession that paid nicely, after which donating cash to charity.
This is called “earning to give” and it is one of many central pillars of efficient altruism, a motion that seeks to do good through the use of assets successfully.
When Bankman-Fried took a job at quantitative buying and selling agency Jane Street after graduating, he mentioned he donated about half of his wage to charities, together with animal welfare organisations.
He talked about plans to finally donate a lot of the cash made in his lifetime, with a deal with “long-termism” or safeguarding the way forward for humanity.
Read extra:
The rise and fall of Sam Bankman-Fried
Does SBF’s arrest imply crypto is basically unsound?
The begin of the crypto king
After three years at Jane Street, Bankman-Fried give up together with his eye on taking extra dangers to earn more money.
He landed on crypto as one of the best ways of getting wealthy shortly.
It began with Bitcoin. He realised it was promoting for extra in Asia than it was within the US – and figured if he may purchase it in a single place and promote it in one other he may flip a simple revenue.
“I got involved in crypto without any idea what crypto was,” he informed Forbes. “It just seemed like there was a lot of good trading to do.”
In 2017 he co-founded cryptocurrency buying and selling agency Alameda Research, bringing in different recruits from the efficient altruism neighborhood and reportedly donating half of the corporate’s earnings to charity.
At its peak, the corporate was transferring $25m in Bitcoin every day.
Two years later, he based FTX, an alternate which allowed customers to purchase and promote purchase cryptocurrencies, and moved to Hong Kong.
The FTX growth
From Hong Kong, operations moved to the tax haven of the Bahamas, the place Bankman-Fried purchased a multimillion-dollar waterfront penthouse.
The luxurious property, overlooking an space used for filming the scene the place Daniel Craig famously emerged from the water as James Bond in Casino Royale, was additionally used as a house workplace for Bankman-Fried and as much as 9 of his FTX devotees.
In 2021, Forbes described him as “the richest twentysomething in the world” with a web price of $22.5bn, placing him at 32 on The Forbes 400 wealthy checklist.
Relationship with Caroline Ellison
Bankman-Fried had an on-again, off-again relationship with Caroline Ellison, having met her whereas working at Jane Street.
He persuaded her to hitch Alameda Research. As a fellow efficient altruist, she was additionally attracted by the prospect of incomes cash to present to charity.
The pair lived collectively within the Bahamas penthouse.
Ellison, who turned Alameda’s co-chief government in 2021 and assumed full management final 12 months, has pleaded responsible to fraud fees and agreed to cooperate with prosecutors.
She appeared to have been sad at Alameda lengthy earlier than its collapse.
In July, the New York Times revealed an article citing her private writings from early 2022, through 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 choose saying it doubtless amounted to witness tampering.
Political donations
Bankman-Fried was the second-largest particular person donor to Joe Biden within the 2020 election cycle.
He was additionally among the many largest donors to Democratic candidates and causes forward of the November 2022 midterm elections.
Prosecutors mentioned he used $100m in stolen FTX deposits to fund these donations, which he hoped would spur the passage of crypto-friendly laws.
He was initially charged with conspiring to interrupt US marketing campaign finance legal guidelines, however this cost was dropped after The Bahamas mentioned it was not a part of its settlement to extradite him.
However, a choose has mentioned the political donations can nonetheless be mentioned on the trial as a result of they’re “intertwined
inextricably” with the fraud fees.
The fees towards SBF
Bankman-Fried faces seven fees of fraud and conspiracy stemming from the collapse of FTX.
Prosecutors have accused him of looting billions of {dollars} in funds from FTX prospects to plug losses at Alameda, purchase luxurious actual property and donate to political campaigns.
He has pleaded not responsible to the fees whereas acknowledging threat administration failures.
The trial in Manhattan is anticipated to last as long as six weeks.
Source: information.sky.com”