The rise and fall of Sam Bankman-Fried and FTX

CNBC TV18 By Anand Singha Published March 28, 2024

[{"selector":"#anim-cac5e54a-0a34-4ad3-ada7-448691160b81 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Sam Bankman-Fried, on Thursday, March 28, was sentenced to 25 years in prison for defrauding customers and investors of the FTX crypto exchange.

[{"selector":"#anim-6e372c0f-b82c-4c0d-9ea0-37dd8e853f72 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-12.499999772451451%, 0, 0) translate(-25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] Here's a timeline of events leading up to the 32-year-old former billionaire’s sentencing:

[{"selector":"#anim-e1252add-1dd4-4abe-ab55-63d4b517ad6e [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] 2017: Sam Bankman-Fried, an MIT graduate, leaves his job at Jane Street Capital to establish Alameda Research, focusing on cryptocurrency trading.

[{"selector":"#anim-45695218-d647-4b48-8fc5-90243089f738 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(12.499999772451451%, 0, 0) translate(25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] May 2019: Bankman-Fried, along with former Google employee Gary Wang, founds FTX, a platform for trading crypto tokens and derivatives.

[{"selector":"#anim-15481c33-7fa3-4fdc-9c49-9795d84f1388 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] October 2021: FTX raises $420 million in venture funding, elevating the company's valuation to $25 billion.

[{"selector":"#anim-bca5a807-4fe2-47ba-868e-e41b31416c55 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-12.499999772451451%, 0, 0) translate(-25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] Bankman-Fried's net worth skyrockets, landing him on the Forbes billionaires list.

[{"selector":"#anim-fceb5a5a-9221-4991-bca5-dbe2d2fc12b1 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] February 2022: The NFL Super Bowl features heavy cryptocurrency advertising, including FTX's prominent spot. This period marks the zenith of the crypto craze.

[{"selector":"#anim-874487c2-f3cb-4105-bd35-66c882c4534c [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(28.90624987200394%, 0, 0) translate(0%, 0%) scale(1)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] June-July 2022: Amidst a crypto market downturn, Bankman-Fried extends financial aid to struggling crypto firms like Voyager Digital and BlockFi, totalling $450 million.

[{"selector":"#anim-b70ebc4d-d905-42b9-ad0a-11e5e12d1c9b [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Alameda gives crypto lender Voyager Digital a $200 million credit facility, and FTX gives lender BlockFi a $250 million loan.

[{"selector":"#anim-0e827f06-1d0b-47e6-b657-08f73478b377 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-12.499999772451451%, 0, 0) translate(-25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] November 2, 2022: CoinDesk leaks Alameda Research's balance sheet, revealing a large portion of its $14.6 billion assets are in FTX's token, FTT.

[{"selector":"#anim-3a3c9f63-00a2-436e-9489-be56b51a4a8a [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(12.499999772451451%, 0, 0) translate(0%, 0%) scale(1)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] This disclosure causes FTT's market cap to drop by $400 million, prompting Binance to announce plans to sell its FTT holdings.

[{"selector":"#anim-5b71f986-0747-4684-bf70-5d634b994821 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] November 11, 2022: FTX declares bankruptcy following a surge in customer withdrawals. Bankman-Fried steps down as CEO.

[{"selector":"#anim-c5fea05a-50e7-48c0-a0c7-0f13df3cd381 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-12.499999772451451%, 0, 0) translate(-25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] December 12, 2022: Bankman-Fried is apprehended in the Bahamas on charges of fraud and conspiracy.

[{"selector":"#anim-6a577d53-e492-4d10-a6d4-a70b98a84707 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] December 21-22, 2022: Bankman-Fried agrees to extradition to the United States. Upon his arrival, he is released on bail to Palo Alto.

[{"selector":"#anim-5eec8316-e606-4005-bfd7-b51632f5ccc3 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(12.499999772451451%, 0, 0) translate(25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] January 3-12, 2023: Bankman-Fried pleads not guilty, asserting that FTX's collapse is attributable to broader crypto market volatility.

[{"selector":"#anim-4749c8b5-6155-4e68-a1b4-a8715a2f5884 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] August 11, 2023: Bankman-Fried's bail is revoked due to allegations of witness tampering. He is detained until trial.

[{"selector":"#anim-0d033ecc-9050-45f5-aec9-a5478e9c6d88 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-12.499999772451451%, 0, 0) translate(-25%, 0%) scale(1.5)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] October 3, 2023: Trial proceedings begin in Manhattan federal court.

[{"selector":"#anim-be40d79c-05cc-4ade-8fdb-51ea2445a848 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] October 28, 2023: Bankman-Fried testifies in his defense, denying charges of fraud.

[{"selector":"#anim-7197267c-f093-42cc-b092-c6f7a08f18d1 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(12.499999772451451%, 0, 0) translate(0%, 0%) scale(1)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] November 2, 2023: Bankman-Fried is convicted on all seven charges he faced.

[{"selector":"#anim-fe708413-00e3-4e17-bcea-ca58b66756ae [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] March 28, 2024: Sam Bankman-Fried sentenced to 25 years in prison for FTX fraud.

Sam Bankman-Fried sentenced to 25 years in prison for FTX fraud

[{"selector":"#anim-7af49efe-b908-4053-8061-c5358f9a6682","keyframes":{"transform":["scale(1)","scale(1.5)","scale(0.95)","scale(1)"],"offset":[0,0.33,0.66,1]},"delay":0,"duration":1450,"easing":"ease-in-out","fill":"both","iterations":1}] [{"selector":"#anim-16f6039a-6ed9-411f-b8d0-e6996b11d0a3 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate3d(-10.108490323155857%, 0, 0) translate(-23.584905660377366%, -5.354573125287754%) scale(1.4716981132075473)","translate3d(0%, 0, 0) translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"fill":"forwards"}] Thanks For Reading! Read More