Sam Bankman-Fried, in a photograph taken this year in the Bahamas

The young founder of the FTX cryptocurrency platform, Sam Bankman-Fried, about to be extradited to the United States, has starred in a fleeting and hectic crypto career that dazzled the world of finance, which is now licking its wounds for having been blinded for the personality and rise of the “white knight” of cryptocurrencies.

The child prodigy of the crypto world who at the age of 27 created FTX; the philanthropist who contributed millions of dollars to political parties, civil organizations, charitable causes and sports centers; the Don Quixote who was dedicated to saving other crypto platforms in trouble; The once richest 29-year-old in the world was nothing but a brilliant con man.

“It’s just old-fashioned fraud, where it took money from clients for its own benefit, without any sophistication,” said John Ray, the chief executive officer appointed to lead FTX after the company filed for bankruptcy. bankruptcy on November 11, before a committee of the United States Congress that is studying the case.

Bankman-Fried’s training and career

The young man attracted by risk, who built on a house of cards what became the second cryptocurrency platform in the world, valued at its peak at 32,000 million dollars, was born in California on March 6, 1992 in the womb of from a wealthy family. His parents were law professors at the prestigious Stanford University.

His interest in mathematics took shape already at school, where he participated in a summer program for talented students in this subject. He studied at the prestigious Massachusetts Institute of Technology (MIT), where he graduated in 2014 in Physics with a specialty in mathematics.

That same year he started working at the firm Jane Street, which was engaged in arbitrage operations of stock funds, which consists of buying assets in one market and immediately selling them for a higher price in another.

In 2017 he made the leap to cryptocurrencies with the founding of Alameda Research, which would end up becoming the investment arm of FTX, which he created two years later and where he put his knowledge into practice, but now applied to the still fresh cryptocurrency market.

From then on, his rise became a triumphant pomp, and his face was sculpted in prestigious economic magazines such as Forbes or Fortune, which last August wondered on a cover if Bankman-Fried would be the next Warren. buffet.

The fall of Bankman–Fried

But the 2022 crisis, derived from the pandemic crisis, inflation, the war in Ukraine and above all the rise in interest rates by the US central bank, hit all sectors, but especially cryptocurrencies, with the investors rushing headlong to recoup their investments.

The total debacle of the Terra-Luna cryptocurrency, which in a fateful 24 hours in May lost all its value, demonstrated that the flight of investors from these assets was a fact and caused the massive withdrawal of crypto traders to redouble.

The winter of cryptocurrencies soon began to claim more victims such as the Three Arrows Capital (3AC) fund, which managed to manage 10,000 million dollars, and Celsius, among many others. But in this crypto chaos, Bankman-Fried not only always showed confidence and poise, but also ventured to buy and lend money to these companies in the sector in trouble, becoming a beacon in the midst of the storm, which would also end up knocking down their financial construction. .

your inner circle

At the moment, the US authorities have only charged Bankman-Fried for the operations of FTX, a company in which, according to the current executive director of FTX, there was a “total absence of corporate controls” and a lack of “reliable financial information”.

Among the people in his closest circle, along with the one who ran the company and lived in a luxury penthouse in the Bahamas, according to various media outlets, were the co-founder and director of technology of FTX, Gary Wang, the director of engineering of FTX , Nishad Singh, and Caroline Ellison, CEO of Alameda.

All have pleaded guilty to criminal charges “in connection with their role in the fraud that contributed to the collapse” of the company, Attorney for the Southern District of New York Damian Williams announced Wednesday.

It is now in the hands of the US Justice to determine whether Bankman-Fried, alone or together with his circle, was responsible for what the federal court prosecutor for southern New York, Damian Willias, described as “one of the biggest financial frauds in American history.”

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