Who is Sam Bankman-Fried, founder of FTX?

Sam Bankman-Fried was born on March 6, 1992, in California, USA. He completed his education in Physics at the Massachusetts Institute of Technology (MIT) in 2014. After graduating, he went to work at Jane Street Capital, an investment firm, quitting the job three years later and starting his own crypto-focused trading company, Alameda Research, followed by FTX in 2019. Fried is a philanthropist, technology executive, investor, and active in cryptocurrencies at Twitter.

Sam Bankman Fried, known as SBF due to the abbreviation of his name, was born on March 6, 1992. Both his parents are professors at Stanford law.

Before his crypto empire collapsed in November 2022, Sam Bankman-Fried was one of the richest people in crypto thanks to the FTX exchange and Alameda Research trading company. Bankman-Fried reached $26 billion worth of wealth at its peak. By the age of 30, he had become a major political donor, and that is how he found more space in the US agenda.

Until a short time ago, SBF was called the genius child of crypto money in the world. In early 2022, investors were valuing FTX and its US operations totaling $40 billion. He was even compared to JP Morgan Sr in some comments in the US press for trying to bail out several failed small crypto companies.

In early November 2022, crypto publication CoinDesk published a remarkable report questioning how stable Bankman-Fried's empire really is.

The report found that even though Alameda Research and FTX are two separate companies, Alameda's assets are mostly tied to the token FTT invented by FTX. While there was nothing technically wrong with this, CoinDesk reported, this has caused FTX's liquidity to be questioned.

"Billionaire Sam Bankman-Fried's cryptocurrency empire is officially divided into two main divisions: FTX (his exchange) and Alameda Research (trading firm), both giants in their respective industries. However, although they are two separate businesses, the ones reviewed by CoinDesk According to a private financial document, the split breaks down in a key place: Alameda's balance sheet, which is filled with FTX—specifically FTT. While there's nothing wrong with that per se, Bankman-Fried's trading giant Alameda is largely a sister company. "It shows that it is based on a token that he invented. This proves that the ties between FTX and Alameda are unusually close."

A few days later, things took a turn for the worse for SBF when Binance CEO Changpeng "CZ" Zhao decided to liquidate the approximately $530 million in FTT. Zhao announced on November 6 that they decided to sell FTX's FTT tokens as a result of their "recent evaluations".

Customers also competed for withdrawals after this development, and FTX saw an estimated $6 billion in withdrawals that it struggled to fulfill for 72 hours.

The value of FTT fell 32% but rose once again after Bankman-Fried's surprise announcement on Tuesday, November 8, that Binance will buy FTX and effectively bail it out.

On Wednesday, Binance announced its withdrawal from the deal. "In a statement from Binance, it was decided not to proceed with the possible acquisition of FTX as a result of the institutional review, as well as the latest news about misused customer funds and investigation allegations in the US," the statement said.

The news caused FTT to drop even further – Bankman-Fried saw 94% of its net worth wiped out in a single day.