{"id":9474,"date":"2023-11-04T06:30:57","date_gmt":"2023-11-04T06:30:57","guid":{"rendered":"https:\/\/infundpros.com\/business\/sam-bankman-fried-the-fallen-king-of-crypto\/"},"modified":"2023-11-04T06:30:57","modified_gmt":"2023-11-04T06:30:57","slug":"sam-bankman-fried-the-fallen-king-of-crypto","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=9474","title":{"rendered":"Sam Bankman-Fried: the fallen \u2018king of crypto\u2019"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=c38d2f8a-5707-41ae-815e-7a9e79d9027d\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Sam Bankman-Fried spent many of the breaks during his trial in New York sitting alone at the defence table flanked by two hulking federal marshals. But on the day he was due to testify, he stood up and walked to the witness stand early. An official told him to step down and wait to be called.\u00a0<\/p>\n<p>The 31-year-old former billionaire, who faces decades in prison after being convicted of fraud and money laundering, has always been eager to spin his own story. But in the 26th floor Manhattan courtroom, he watched in silence as his closest friends and former girlfriend took the stand to give a damning account of his stunning rise and fall.\u00a0<\/p>\n<p>Prosecutors said he \u201csecretly\u201d took \u201cbillions out the back door\u201d at his FTX crypto exchange to fund reckless spending by his private trading firm, leading to FTX\u2019s collapse last November with an $8bn hole in its balance sheet. \u201cThe defendant was motivated by greed and ambition,\u201d prosecutor Nick Roos said. \u201cThousands of people lost billions of dollars\u2009.\u2009.\u2009.\u2009because he wanted more money to do whatever he wanted with\u2009.\u2009.\u2009.\u2009Let the evidence prevail over his storytelling.\u201d<\/p>\n<p>Bankman-Fried\u2019s defence lawyer said prosecutors engaged in deceptive storytelling of their own. \u201cThey wrote him into this movie as a villain, a bad guy,\u201d said Mark Cohen. \u201cWhat the government kept leaving out of its movie was the \u2018why\u2019.\u201d\u00a0<\/p>\n<p>After less than five hours, the jury found he had criminal intent. But we will never know what was in Bankman-Fried\u2019s mind. Natalie Tien, his former assistant and spokesperson, said neither side\u2019s arguments fitted the man she knew. \u201cHe did lie, he did take the money, but I don\u2019t think it was about greed,\u201d she said. \u201cI think he was aiming to play a more significant role, a bigger game in his mind, and was taking those actions to achieve that goal. Perhaps he genuinely thought it was for the greater good.\u201d\u00a0<\/p>\n<p>Bankman-Fried was the poster boy for crypto\u2019s push into the mainstream, welcomed on Capitol Hill and winning backing from top investors including Sequoia and BlackRock. The FTX fraud has become the ultimate indictment of the crypto bubble and the dangers of largely unregulated companies handling billions of dollars for millions of customers.\u00a0Speaking after the late evening verdict, district attorney Damian Williams said Bankman-Fried had tried to make himself \u201cking of crypto\u201d. <\/p>\n<p>The son of two eminent Stanford law professors, Joseph Bankman and Barbara Fried, who sat grim-faced in court, Bankman-Fried attended the same Palo Alto private school as Steve Jobs\u2019s son. He studied at the Massachusetts Institute of Technology, and took a job at Jane Street Capital before quitting to apply Wall Street trading logic to crypto with his own private trading firm Alameda Research.\u00a0<\/p>\n<p>His greatest success came after founding FTX in 2019, just before the boom in cryptocurrencies during the pandemic. His vision of a high-tech future for finance won FTX around $2bn in venture capital backing at a peak valuation of $40bn.\u00a0Bankman-Fried\u2019s pitch convinced investors despite playing video games on most of his calls with them. This became part of his legend, along with his frizzy hair, cargo shorts and the beanbag he slept on next to his desk. <\/p>\n<p>He and nine employees lived in a $30mn Bahamas penthouse with an orchid-shaped pool. He watched the 2022 Super Bowl \u2014 and a multimillion dollar FTX commercial starring Larry David \u2014 in a box with Katy Perry, Orlando Bloom and Kate Hudson.\u00a0<\/p>\n<p>But behind the scenes, FTX had loaned billions to Alameda, fuelling the trading firm\u2019s increasingly wild bets on rising crypto prices. The crypto crash crushed those leveraged investments, and left Alameda unable to pay back FTX, wiping out customer deposits. Prosecutors say the \u201cunlimited borrowing\u201d amounted to \u201cunlimited stealing\u201d.\u00a0<\/p>\n<p>The trial left unanswered questions. Why would a young billionaire, running the world\u2019s most successful start-up, risk illicitly borrowing billions to fund risky crypto trades?\u00a0Nearly absent from the courtroom was Bankman-Fried\u2019s philanthropy, which was key to how he sold his story. He claimed his business empire was an engine to feed money to charities tackling existential threats to humanity \u2014 from rogue AI to future pandemics. <\/p>\n<p>Caroline Ellison, his former girlfriend and CEO at Alameda, who has pleaded guilty to fraud, gave the clearest view into his mind. Bankman-Fried, she said, believed in taking any gamble if he had a knife-edge advantage in probability.\u00a0\u201cHe thought that the only moral rule that mattered was doing whatever would\u2009.\u2009.\u2009.\u2009essentially\u2009.\u2009.\u2009.\u2009create the greatest good for the greatest number,\u201d she testified. He didn\u2019t think \u201crules like don\u2019t lie and don\u2019t steal\u201d were justified.\u00a0<\/p>\n<p>On the stand, Bankman-Fried\u2019s narrative powers were hemmed in by legal procedures. The judge had commented in court that robbing a bank and then playing the lottery is still a crime (even if you intend to win, pay back the bank and donate the profits).\u00a0Bankman-Fried tried to convince the jury that he thought Alameda was allowed to do \u201canything\u201d with the borrowed money, whether to \u201cbuy muffins\u201d or \u201cpay business expenses\u201d, and that he simply misjudged the scale and risk of the borrowing until it was too late.\u00a0<\/p>\n<p>It was a final test for crypto\u2019s master storyteller, and it failed. In the midst of a gruelling cross examination, in which Bankman-Fried said he \u2018didn\u2019t recall\u2019 more than 140 times, prosecutor Danielle Sassoon asked him: \u201cMr Bankman-Fried, would you agree that you know how to tell a good story?\u201d\u00a0<\/p>\n<p>He paused: \u201cI don\u2019t know. It depends on what metric you use.\u201d <\/p>\n<p><em>joshua.oliver@ft.com<\/em><\/p>\n<div class=\"n-content-video n-content-video--internal\">\n<div class=\"n-content-video__placeholder\" data-o-component=\"o-video\" data-o-video-id=\"f7a7fad1-f3ed-41ee-94a7-e1311989aa7e\"><span>Video: FTX: the legend of Sam Bankman-Fried | FT Film<\/span><\/div>\n<\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/c38d2f8a-5707-41ae-815e-7a9e79d9027d\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Sam Bankman-Fried&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-9474","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Sam Bankman-Fried: the fallen \u2018king of crypto\u2019 | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Sam Bankman-Fried spent many of\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=9474\" \/>\n<meta property=\"og:locale\" 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