By: Julia Zhu

Sam Bankman-Fried (SBF) was viewed as a pioneer and a responsible player in the shifty world of Crypto due to his companies FTX exchange and Alameda Research firm. However, in November of 2022 his empire came crashing down. He now faces up to 115 years in prison for fraud charges of defrauding consumers and investors. 

It started on Nov 6th, Binance, a competitor to FTX, owned a few billion of the FTX crypto coin FTT and sold it. 

FTX the following day announces a liquidity crisis and seeks investor bailout. 

Nov 8th, Binance says that it was interested in buying FTX’s no United States business.

Nov 9th, Binance says they have investigated FTX’s books and will not be investing due to worries of the amount of liquidity still in the crypto FTT. 

Nov 10th, The Bahamas freezes FTX because FTX is headquartered in the Bahamas.

Nov 11th, FTX alleges that they were hacked and $477 Million was lost. 

Dec 12th, SBF is arrested by the Bahamian authorities and later extradited to the US. 

SBF has not pleaded guilty to charges of lying to investors and stealing customers money, and this put him at odds with his two top executives which have pleaded guilty to those charges: Gary Wang and Caroline Ellison who were respectively the Co-Founder of FTX and the CEO of  Alameda Research. Detractors of crypto now point to this situation as evidence of the volatility and the ease it is to steal money.

Sources

https://www.npr.org/2023/01/03/1146653595/ftx-ceo-sam-bankman-fried-pleads-not-guilty-to-fraud-charges-collapse#:~:text=2.,for%20his%20own%20personal%20use.

https://www.investopedia.com/what-went-wrong-with-ftx-6828447

https://www.forbes.com/profile/sam-bankman-fried/?sh=4b01e6744449