Sam Bankman-Fried
Samuel Benjamin Bankman-Fried[2] (born March 5, 1992), commonly known as SBF,[3] is an American entrepreneur who was convicted of fraud and related crimes in November 2023. Bankman-Fried founded the FTX cryptocurrency exchange and was celebrated as a "poster boy" for crypto.[4] At the peak of his net worth, he was ranked the 41st-richest American in the Forbes 400.[5]
Sam Bankman-Fried
SBF
Entrepreneur
- CEO of FTX
- Co-founder of Alameda Research
Incarcerated
- Joseph Bankman (father)
- Barbara Fried (mother)
Linda P. Fried (aunt)
Gabriel Bankman-Fried (brother)
- Wire fraud (2 counts)
- Conspiracy to commit wire fraud (2 counts)
- Conspiracy to commit securities fraud
- Conspiracy to commit commodities fraud
- Conspiracy to commit money laundering
25 years in prison
August 11, 2023
(10 months ago)
The public persona of Bankman-Fried masked significant problems at FTX, and in November 2022, as evidence of potential fraud began to surface, depositors quickly withdrew their assets, forcing the company into bankruptcy. On December 12, 2022, Bankman-Fried was arrested in the Bahamas and extradited to the United States, where he was indicted on seven criminal charges, including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations.[6][7][8]
In the case of United States v. Bankman-Fried, he was convicted of all seven counts of fraud, conspiracy, and money laundering.[9] On March 28, 2024, he was sentenced to 25 years in prison and ordered to forfeit $11 billion.[10][11][12]
Early life and education
Bankman-Fried was born on March 5, 1992, in Stanford, California.[1][13] He is the son of Barbara Fried and Joseph Bankman, both professors at Stanford Law School.[1] His grandmother, Adrienne Fried Block, was a noted musicologist.[14] His aunt Linda P. Fried is the dean of Columbia University Mailman School of Public Health.[15] His younger brother, Gabriel Bankman-Fried (b. c. 1995), previously worked as a legislative assistant, Wall Street trader, and director of the nonprofit Guarding Against Pandemics and its associated political action committee, which came under scrutiny by federal investigators after it was discovered that much of the US$35 million on its books had been stolen by his older brother, Sam, from Alameda Research accounts.[16][17][18] Both of his parents are also being sued by the new owners of FTX, to return assets Sam had given them, in the form of cash and a home, valued at over $32 million. His parents admit Sam gave them the assets, as gifts, but deny wrongdoing and are in court to make their case.[19]
Bankman-Fried attended Canada/USA Mathcamp, a summer program for mathematically talented high school students.[20] He attended high school at Crystal Springs Uplands School in Hillsborough, California.[21] He graduated from the Massachusetts Institute of Technology in 2014 with a bachelor's degree in physics and a minor in mathematics. As an MIT student, he lived in a coeducational group house called Epsilon Theta.[20][22][23]
Arrest and charges
On December 12, 2022, Bankman-Fried was arrested shortly after 6:00 p.m. in his apartment complex in New Providence, Bahamas by the Royal Bahamas Police Force, with the expectation that he would be extradited to the United States to face trial.[94] The arrest took place the day before Bankman-Fried was scheduled to appear before the U.S. House Committee on Financial Services,[8] but Forbes obtained and published his prepared testimony.[92]
Earlier that day, the Southern District of New York had charged Bankman-Fried with "wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering." Philip Davis, the Prime Minister of the Bahamas, commented on the arrest that "the Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law ... [W]hile the United States is pursuing criminal charges against SBF individually, the Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX".[8][94][95] Braden Perry, a former senior trial lawyer at the Commodity Futures Trading Commission, opined that a conviction on any of the charges might result in a prison sentence of years or even decades.[96][97]
After being held at Fox Hill Prison in Nassau for ten days, Bankman-Fried consented to his extradition from the Bahamas to the United States to face charges.[98][99] He was allowed to remain free on a $250 million bond, the largest such bond ever set in an American criminal proceeding. Among the conditions was that he would stay at his parents' home in California.[100]
On January 3, 2023, Bankman-Fried pled "not guilty" to fraud and the other charges.[101][102]
On February 1, 2023, the judge presiding over his case, Judge Lewis Kaplan, tightened the bail conditions and forbade Bankman-Fried from contacting current or former employees of FTX without attorneys present. The restriction was imposed as Judge Kaplan considered his contact with a potential witness as a "material threat of inappropriate contact with prospective witnesses",[103] and hinted Bankman-Fried might deserve to be jailed pending trial.[104]
Four additional criminal charges levied against Bankman-Fried were announced on February 23, 2023, primarily focused on his making "more than 300 illegal political donations."[105] A March 2023 indictment accused Bankman-Fried and others that they had "directed and caused the transfer" of at least $40 million in cryptocurrency to Chinese government officials, in order to unfreeze accounts of Alameda Research.[106] In July, prosecutors dropped a campaign finance charge filed against him due to treaty obligations to the Bahamas created by his extradition.[107]
In a separate illegal campaign finance indictment in August, Bankman-Fried was accused of using $100 million in stolen funds of FTX customers towards 2022 U.S. elections campaign contributions.[108][109]
Personal life
Bankman-Fried is vegan.[29] He was raised in a Jewish family.[173][145] As of mid-2021, it was reported that he lived with approximately ten roommates in a five-bedroom Bahamian penthouse bought by co-CEO of FTX Ryan Salame.[23][54][174] After FTX's collapse, the penthouse was put up for sale for close to $40 million.[175]
Bankman-Fried had a relationship with Alameda Research CEO Caroline Ellison that lasted around six months and ended on April 15, 2022.[54][176] While testifying against him in court in October 2023, she claimed that his hairstyle and clothes were part of a "well calculated" image that he tried to project. She stated that Bankman-Fried believed he had received higher bonuses while working at Jane Street because of his hair and used his appearance as "an important part" of FTX's "narrative and image."[177] In court, Bankman-Fried appeared wearing a gray suit with hair trimmed down.[178]
Bankman-Fried once played the video game League of Legends while on a call attempting to secure an investment from Sequoia Capital.[179] An article in the Financial Times characterized Bankman-Fried's "win ratios" in League of Legends as "average-to-bad".[180]
Τhroughout the legal process, Bankman-Fried's parents have stood by him, writing in a December 2022 letter, around the time of the arrest, "You are innocent." In an e-mail to The New Yorker, his mother, Barbara Fried, denounced the actions of the prosecution and the bankruptcy team as "McCarthyite" and a "relentless pursuit of total destruction," which is enabled by "a credulous public." After Bankman-Fried was incarcerated during the trial, his parents took turns traveling every Tuesday from California to be with him at the Brooklyn jail where he waited the outcome of the trial, and the sentencing phase.[181] She wrote a letter to the judge in February 2024 arguing for lenient sentencing and that Bankman-Fried faces extreme danger in prison.[182]