From CNN’s Allison Morrow and Samantha Delouya A year and a half ago, Sam Bankman-Fried was living in the Bahamas as a crypto superstar, running a celebrity-backed startup, surrounded by fans and friends who believed he was the real deal: an MIT math whiz. A visionary who ditched the Wall Street track to chart his own course. A philanthropist building a fortune that, he repeatedly said, he intended to give away entirely. Bankman-Fried, known as SBF, began his career as a trader at Jane Street Capital after studying math and physics at MIT. In 2017, he left Jane Street to strike out on his own, starting a cryptocurrency hedge fund he called Alameda Research. The firm’s first office was a two-bedroom Airbnb in North Berkeley, California. His entrepreneurial drive didn’t stop there: In 2019, Bankman-Fried co-founded cryptocurrency exchange FTX and became its CEO. He later hired his former Jane Street colleague Caroline Ellison as a trader at Alameda. She later became the firm’s CEO and, at times, Bankman-Fried’s girlfriend. She also became the prosecution’s star witness, testifying that she and others carried out financial crimes under Bankman-Fried’s direction. In January 2022, as cryptocurrency prices were still hovering near all-time highs, FTX was valued at $32 billion, with high-profile investors like SoftBank and BlackRock. In November 2022, the company filed for bankruptcy after experiencing billions of dollars worth of net withdrawals. From CNN’s Allison Morrow FTX, founded by Bankman-Fried in 2019, billed itself as a safe and easy way to start trading cryptocurrencies – digital assets whose values are based largely on a collective hope for their future application, which remains murky. In the early 2020s, with US interest rates at zero and millions of amateur investors stuck at home, FTX’s popularity as a crypto portal skyrocketed. By 2022, FTX was airing Super Bowl ads and plastering its name on the Miami Heat’s arena. But FTX collapsed into bankruptcy on November 11, 2022, after what was effectively a run on the bank – a customer panic sparked by a leaked document that suggested irregular financial dealings between FTX and another firm owned by Bankman-Fried. But, unlike bank customers, FTX depositors had no federal insurance fund to compensate them when the cash dried up. And despite FTX’s public assurances that it didn’t invest or move customer deposits in any way, Bankman-Fried’s other firm had been secretly siphoning deposits to repay its own lenders, underwrite executives’ luxury lifestyles, gamble in crypto markets and funnel millions of dollars in US political campaigns. From CNN’s Allison Morrow Bankman-Fried was found guilty in November of seven federal counts of fraud and conspiracy. Put simply, prosecutors say he not only stole from customers and deceived investors, but he also engaged his business partners in the scheme and subsequent cover-up. In total, prosecutors say the fraud amounted to $10 billion, including $8 billion siphoned from FTX customers without their knowledge or consent. Here’s what the seven counts mean: Crimes against FTX customers: Counts one, two and six Count one: Wire fraud on customers of FTX Count Two: Conspiracy to commit wire fraud on customers of FTX Count Six: Conspiracy to commit commodities fraud on customers of FTX Fraud against lenders: Counts three, four and five Counts three and four: Wire fraud and conspiracy to commit wire fraud on lenders to Alameda Research Count Five: Conspiracy to commit securities fraud on investors in FTX Count Seven: Conspiracy to commit money laundering
Sam Bankman-Fried sentencing
