Samuel Benjamin Bankman-Fried is a cryptocurrency entrepreneur who founded the cryptocurrency exchange FTX. He also created the associated trading firm Alameda Research. Both entities crashed dramatically and led to Chapter 11 bankruptcy in late 2022. Sam Bankman-Fried was recently convicted of fraud and duping cryptocurrency account holders.
Just before the dramatic crash of the cryptocurrency exchange FTX, Sam Bankman-Fried featured at the Number 41 position in the Forbes 400 richest American personalities. He was the 60th richest person in the world with a net worth of $26 billion and after the FTX crash, his net worth has diminished to ‘0’ as per Bloomberg Billionaires Index. Before he became bankrupt, Sam Bankman-Fried was a major donor for the US political campaigns, donating openly to Democratic candidates.
Sam Bankman-Fried was born on March 6, 1992 in the campus of Stanford University to Barbara Fried and Joseph Bankman, both professors at Stanford Law School. He came from an academically proficient family and his aunt Linda P. Fried served as the dean of Columbia University Mailman School of Public Health while his brother, Gabriel Bankman-Fried was a former Wall Street trader as well as the director of the non-profit Guarding Against Pandemics and its associated political action committee.
He completed his schooling at Crystal Springs Uplands School in Hillsborough, California, and graduated from the Massachusetts Institute of Technology in 2014 with a bachelor’s degree in physics and a minor in mathematics.
Sam Bankman-Fried created the FTX cryptocurrency derivatives exchange in April 2019 and it started operation the following month. Trouble started and on December 8, 2021 Bankman-Fried testified before the Committee on Financial Services about regulating the cryptocurrency industry.
On May 12, 2022, it was revealed that a majority-owned Bankman-Fried, entity Emergent Fidelity Technologies Ltd had purchased 7.6 percent of Robinhood Markets stock. Just before his detention Bankman-Fried in November 2022 had in an affidavit revealed that he and FTX co-founder Gary Wang together borrowed over $546 million from Alameda Research to finance Emergent Fidelity Technologies’ purchase of Robinhood Markets stock.
Bankman-Fried is also said to have been ready to invest $5 billion in the acquisition bid of then Twitter now X by Elon Musk. However, the investment did not materialize when Musk finalized the acquisition. Bankman-Fried also invested $500 million in Anthropic, and $500 million in venture capital firms, including $200 million in Sequoia Capital.
Bankruptcy of FTX
Trouble started in November 2022 when Binance CEO Changpeng Zhao announced on Twitter that his company intends to sell its shares of FTT, FTX’s token. He also revealed that the bulk of the holdings of Alameda, Bankman-Fried’s trading firm, were in FTT. The subsequent tussle and dispute between Zhao and Bankman-Fried on Twitter led to a decline in the price of FTT and other cryptocurrencies.
Binance concluded a non-binding agreement to purchase FTX due to a liquidity crisis at FTX. However, FTT lost 80% of its value after the announcement and then the news was broken that Binance was not interested in acquiring FTX. It was the final nail in the coffin of FTX. On November 11, 2022, FTX, Alameda Research, and more than 130 associated legal entities declared bankruptcy.
It was also reported that Bankman-Fried had siphoned off $4 billion from FTX to Alameda Research, without any disclosure to the companies’ insiders or the public. It was revealed that FTX had, at the time, $16 billion in customer assets and Alameda had borrowed from FTX about $10 billion which was secured through customer funds held by FTX.
Sam Bankman-Fried Convicted of Defrauding Cryptocurrency Customers
Bankman-Fried was arrested and deported to the U. S. on December 12, 2022, from the Bahamas. Sam had shifted his operation to the Bahamas due to the liberal economic policies of the Caribbean nation. He was charged on eight counts before the U.S. District Court for the Southern District of New York. He was charged with different offenses which included wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations. Four more charges were slapped on him. He obtained bail on a $250 million bond but was revoked when it was revealed that he had allegedly attempted witness tampering and once again was returned to his cell. Bankman-Fried was convicted of seven counts of fraud and conspiracy, on November 2, 2023. Bankman-Fried could spend a maximum of 115 years in prison if convicted on all eight counts and sentenced to serve each charge consecutively.
How Much is Sam Bankman-Fried’s Net Worth?
Former FTX CEO, Sam Bankman-Fried (SBF) was a multibillionaire with a net worth of $26 billion at one time. However, after the collapse of FTX and its bankruptcy, his net worth as per Bloomberg is $0.
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Samuel Benjamin Bankman-Fried Wiki Biodata
|Born||March 6, 1992 (age 31)|
|Place Of Birth||Stanford, California, U.S.|
|Parents||Joseph Bankman (father)|
|Barbara Fried (mother)|
|Relatives||Linda P. Fried (aunt|
|Education||Massachusetts Institute of Technology (BS)|
|Known for||CEO of FTX (defunct)|
|Co-founder of Alameda Research|
|Criminal status||Convicted on all charges; sentencing pending|
|Criminal charge||Securities fraud, Wire fraud, Conspiracy|