CONFIRMED
FTX and the Crypto King Who Gambled With Other People's Money
Sam Bankman-Fried looked nothing like a master of the financial universe, and that was part of the appeal. He slept on a beanbag, wore cargo shorts and a rumpled T-shirt to meetings with the most powerful investors in the world, played video games while pitching them, and let his hair grow into a famous unruly mop. He talked not about getting rich but about giving it all away — a devotee of 'effective altruism,' the philosophy of earning as much as possible in order to donate it to causes that do the most good. By 2022 his cryptocurrency exchange, FTX, was valued at around $32 billion, one of the largest in the world; his face was on a Miami sports arena and a Super Bowl commercial; he had become the acceptable, philanthropic face of a chaotic crypto industry, courted by celebrities, politicians, and regulators alike. And then, over about ten days in November 2022, the whole edifice collapsed with stunning speed. It emerged that roughly $8 billion of FTX customers' money was simply gone — that the exchange had secretly funnelled its customers' deposits to Bankman-Fried's affiliated hedge fund, Alameda Research, which had gambled and lost much of it. There was no sophisticated technology failure and no clever scheme that merely went wrong; a court would find it was straightforward fraud and theft on an enormous scale. Bankman-Fried was arrested, tried, convicted on all counts, and in 2024 sentenced to 25 years in prison. This article tells the story of how a young man in shorts became the king of crypto, how he stole billions while presenting himself as the industry's most ethical figure, and how it all came apart in less than two weeks.
