Sam Bankman-Fried, often referred to online as “SBF,” is a finance and cryptocurrency entrepreneur and the founder and former chief executive officer (CEO) of bankrupt crypto exchange FTX, in addition to Alameda Research crypto trading company, which Bankman-Fried has tweeted is winding down, as of early November 2022. He rose to prominence as head of one of the world’s largest cryptocurrency exchanges, with a personal net worth once exceeding $26 billion, before an abrupt end to his digital currency empire.

Formerly seen as a white knight in the cryptocurrency community, thanks to prior bailouts and rescue deals for other crypto companies, SBF quickly shifted to villain status when it was found he was likely implicated in questionable trades that led investors to lose billions.

Here’s a closer look at the background, rise, and fall of Bankman-Fried.

Key Takeaways

  • Sam Bankman-Fried was the founder and former chief executive of bankrupt FTX cryptocurrency exchange and Alameda Research crypto trading firm, which is said to be closing.
  • Known as “SBF,” Bankman-Fried made deals to rescue other flailing cryptocurrency businesses before seeing his empire crumble in a few days in November 2022.
  • The 30-year-old graduated from Massachusetts Institute of Technology (MIT) and worked at a large trading firm before founding his own companies.
  • Bankman-Fried became one of the wealthiest cryptocurrency executives before a solvency crisis at FTX led to sudden company bankruptcy and his resignation as CEO.

Early Life, Education, and Career

Sam Bankman-Fried was born on March 6, 1992, in California. The son of two professors at Stanford Law School, Bankman-Fried grew up in a highly educated family. He attended high school at Crystal Springs Uplands School in Hillsborough, California. He participated in a summer academic program for gifted high school students in mathematics during this time.

From 2010 to 2014, Bankman-Friend attended MIT and graduated with a degree in physics and a minor in mathematics. In the summer of 2013, he worked as an intern for New York-based Jane Street Capital, where he returned to the proprietary trading firm as a full-time employee after graduating.

Founding of a Cryptocurrency Empire

In 2017, Bankman-Fried left Jane Street and later founded Alameda Research, a quantitative trading firm making millions per day actively trading cryptocurrency between various international markets. He founded the cryptocurrency exchange FTX in April 2019 and launched it in May of that year.

As the cryptocurrency world burst into prominence during the COVID-19 pandemic, Bankman-Fried and his Bahamas-based company thrived. FTX acquired the Blockfolio exchange and platform in 2020 for $150 million. Its user base expanded, and Bankman-Fried appeared to be on a solid foundation in the otherwise often-turbulent cryptocurrency markets.

During a subsequent wave of crypto failures, Bankman-Fried offered a financial lifeline to cryptocurrency exchange BlockFi, saving it from a major liquidity crisis. (BlockFi was reported Nov. 15 to be preparing for a potential Chapter 11 bankruptcy filing.)

He bought failed crypto lending platform Voyager and made an offer for the assets of Celsius, which went bankrupt at the same time. He also acquired LedgerX, a derivatives trading platform never fully integrated into FTX.

According to Forbes, Bankman-Fried had an estimated peak net worth of $26.5 billion. However, much of that value was tied to the value of FTX and its FTT cryptocurrency token. During a long down market for cryptocurrency that followed, Bankman-Fried saw his net worth fall to around $17 billion as of late September 2022.

Financial Downfall and Resignation as CEO

Bankman-Fried never let on about any financial challenges or major risk of bankruptcy through October of 2022. On Nov. 2, 2022, a report found that much of the cash held by FTX was in the form of its own token, FTT, which it centrally controls.

In the wake of the news, the CEO of FTX rival Binance announced on Nov. 6 an intent to sell all FTT holdings. The announcement and sales pushed down the price of FTT and tore through the rest of the cryptocurrency markets.

As a liquidity crisis at FTX became apparent, Binance CEO Changpeng “CZ” Zhao announced a nonbinding letter of intent to buy FTX. After a day of due diligence, Binance opted not to buy FTX. Zhao shared that the financial situation was too dire for a cost-effective fix. At the same time, regulators at the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) announced an investigation into Alameda Research and FTX US, including allegations that the exchange mishandled customer funds.

At that point, the financial collapse of FTX became a clear possibility. Bankman-Fried reportedly attempted to raise billions of dollars in an overnight deal to rescue FTX. With no suitors willing to hand over a reported $9.4 billion to save the company, FTX filed for Chapter 11 bankruptcy and Bankman-Fried resigned as CEO on Nov. 11.

The following day, about $1 billion to $2 billion in FTX customer funds went missing. FTX said it was investigating unauthorized transactions after blockchain watchers spotted hundreds of millions of dollars moved out of FTX cryptocurrency wallets.

What Is Sam Bankman-Fried Known For?

Bankman-Fried is known for being the (now-former) founder and CEO of the cryptocurrency exchange FTX and for playing a large role in the cryptocurrency industry.

What Is Sam Bankman-Fried’s Net Worth?

According to Forbes, Bankman-Fried had a top net worth of $26.5 billion. But it fell to roughly $16 billion—and then to nearly zero in one week in November 2022.

Where Did Sam Bankman-Fried Go to School?

Bankman-Fried attended Crystal Springs Uplands School in Hillsborough, California, for high school and Massachusetts Institute of Technology (MIT) for college.

The Bottom Line

As for the future, it’s likely to be difficult for Bankman-Fried. With massive investor and customer losses playing out, FTX and its founder are likely targets of many future lawsuits and bankruptcy proceedings. The huge losses and allegations of fraud and cover-up of severe financial troubles could make Bankman-Fried the target of criminal charges and the punishments that go with a conviction, if it comes to that.

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