The collapse of Sam Bankman-Fried's $40 billion crypto empire shocked the world with its speed and scale. In less than a week, the company he founded, FTX, fell from its perch as a Top 5 cryptocurrency exchange and into the throes of bankruptcy court and the glare of federal agencies. A viral tweet from a former crypto executive read: “The insanity of Theranos, speed of Lehman and scale of Enron.”
A CoinDesk story about Bankman-Fried’s market-making firm Alameda Research would eventually lead to a series of events that exposed the depth of the crypto titan’s deception. When customer outflows hit FTX, Bankman-Fried tweeted that assets were “fine” when, in fact, they were not fine. One day later, FTX suspended all customer withdrawals. (That tweet has since been deleted.) There is also a reported $8 billion hole in FTX’s books, but even liquidators can’t nail down the figure because the company lacked an accounting department and did not keep proper records. Bankruptcy filings show $4.1 billion was loaned from Alameda Research to Bankman-Fried and other FTX executives personally via suspicious related-party transactions.
Read more: Presenting CoinDesk's Most Influential 2022
In both good times and bad, Sam Bankman-Fried was the face of the cryptocurrency industry this year. Nobody exuded greater “main-character energy,” commanding the attention of mainstream news outlets and crypto Twitter degens alike.
Here’s a sampling of Bankman-Fried’s biggest flexes this past year, before it all came crashing down:
- Raising a $400 million Series C round at a $32 billion valuation from investors including Temasek, Tiger Global and Softbank; FTX US, a separate arm of the exchange, also raised a $400 million Series A at a $8 billion valuation
- Bailing out struggling crypto lender BlockFi by providing a $400 million credit line in exchange for an option to purchase the company
- Outbidding competitor exchange Binance to purchase the assets of another struggling crypto lender, Voyager Digital
- Purchasing a 30% stake in Anthony Scaramucci’s Skybridge Capital
- Testifying before the U.S. Senate Agriculture Committee on crypto legislation
- Donating millions of dollars to U.S. political campaigns during the 2022 midterms elections, including a record $10 million in support of a losing Oregon congressional primary campaign
- Signing Warren Buffett’s billionaire Giving Pledge
- Purchasing a 7.6% stake in Robinhood Markets (HOOD) and sparking FTX acquisition rumors of the retail trading platform
- Texting with billionaire Elon Musk on a potential investment in social media platform Twitter
- Gracing the covers of Forbes and Fortune magazines and billboards across the United States
- Putting on a three-day crypto conference in the Bahamas
- Paying for a commercial featuring comedian Larry David during Super Bowl LVI
In some respects, Bankman-Fried is still the face of crypto, but not for the reasons he’d like to be. Instead of rubbing shoulders with celebrities like Tom Brady, he’s now under the microscope of John Ray Jay III, the new CEO of FTX and a bankruptcy lawyer that picked up the pieces of corporate disasters like Enron. Celebrity author Michael Lewis is also in SBF’s orbit, auctioning off the movie rights to his yet-to-be-written book about the now-disgraced founder.
Bankman-Fried might still be making trips to Capitol Hill. He’s expected to testify before congressional committees on how his exchange failed and lost billions of dollars in customer deposits. He’s still made himself available to the public – speaking at conferences, texting with reporters and tweeting erratically.
His influence is also measured by the other companies that have been brought down by FTX’s collapse. Lending firm BlockFi has filed for Chapter 11 bankruptcy protection after halting customer withdrawals. Another institutional crypto lender, Genesis Trading (a CoinDesk sister company), said it would no longer be able to honor customer withdrawals after the lender revealed it had $175 million in funds stuck on the FTX exchange. Voyager Digital is reopening its bankruptcy bidding process in search of a new white-knight buyer.
Bankman-Fried was the face of crypto in Congress, on Wall Street and in pop culture. FTX is now in the midst of a long and public bankruptcy trial likely to drag on for years. Even after the fall of his empire, we still can’t take our eyes off of him.
CORRECTION (15:39 UTC, December 5): Corrects Bankman-Fried's age in sub-headline.
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