Sam Bankman-Fried: The Scandalous Fall of Crypto King
Zatrun Published at February 26, 2023

Sam Bankman-Fried (SBF) is the founder of Alameda Research, a Hong Kong-based private equity firm, and a co-founder and former CEO of FTX Trading Ltd, a cryptocurrency derivatives exchange. Bankman-Fried has recently gained notoriety as an entrepreneur with a “scammer” reputation, having lost a significant portion of his multi-billion dollar fortune in a crisis that caused FTX’s native cryptocurrency FTT to plummet.

Following the crisis, Bankman-Fried resigned from his position as CEO of FTX, which had filed for bankruptcy. In this article on, you can find out what you need to know about Sam Bankman-Fried.

Who is Sam Bankman-Fried?

Sam Bankman-Fried was born on March 6, 1992, in Palo Alto, California, to a Jewish family. His parents, Joseph Bankman and Barbara Fried, were law professors at Stanford University. He attended Crystal Springs Uplands, a private high school in California, and graduated in 2010. He then went to the Massachusetts Institute of Technology (MIT), where he studied physics. In 2014, Bankman-Fried graduated with a bachelor’s degree in physics and a minor in mathematics.

In the summer of 2013, Bankman-Fried interned at Jane Street Capital, a trading firm that specializes in trading international ETFs. After graduating from MIT, he began working full-time at Jane Street Capital. He worked there for about three years before moving to Berkeley, where he worked as the development director for the Center for Effective Altruism from October 2016 to November 2017.

In the same month he left the Center for Effective Altruism, Bankman-Fried co-founded Alameda Research with Tara Mac Aulay. The trading firm focused on digital assets and had an arbitrage model that made moves worth up to $25 million per day to take advantage of higher Bitcoin (BTC) prices in Japan compared to the US. Bankman-Fried moved to Hong Kong in late 2018.


Sam Bankman-Fried is the founder and former CEO of FTX, a cryptocurrency derivatives exchange that was launched in April 2019. FTX offers discounts to customers who trade using its native token, FTX Token (FTT). Before the token was even launched, Alameda Research became one of its largest holders, which helped the company serve as a market maker and maintain FTT’s price stability.

In mid-2022, the cryptocurrency market experienced a period of turmoil, but FTX and Bankman-Fried appeared to weather the storm. They even helped to rescue some firms that were struggling. However, Alameda Research was facing some difficulties as some lenders recalled the funds it had used for its venture investments. To meet the lenders’ demands, Alameda Research used FTX to lend funds, quietly using customer deposits to lend to Alameda Research.

A few months later, the relationship between Alameda Research and FTX came under scrutiny. On November 2, 2022, a successful website that reports on digital assets leaked some information related to Alameda Research, revealing that it was backed by FTT. This eroded consumer confidence in the token, and Binance’s CEO CZ announced that he would sell his holdings, causing FTT’s value to drop rapidly.

Subsequently, it was revealed that there was no fund available to pay everyone who wanted to convert their FTX tokens into cash. On November 11, it was reported that at least $1 billion in customer funds had gone missing.

Arrest of Sam Bankman-Fried and His Wealth

After the scandal, Sam Bankman-Fried was arrested in the Bahamas, where FTX is based, and later extradited to the United States. He was accused by US Southern District of New York prosecutor Damian Williams of multiple counts of fraud. Alameda Research’s former CEO Caroline Ellison and FTX co-founder Gary Wang admitted to defrauding their investors, but Bankman-Fried continued to claim that he did not knowingly do anything wrong.

Bankman-Fried was released on December 22 on a record bail of $250 million, on the condition that he live with his family in California. He is still facing charges of electronic fraud, commodity fraud, securities fraud, money laundering, and campaign finance law violations. If convicted on all charges, he could face up to 118 years in prison.

Sam Bankman-Fried’s net worth, which was heavily tied to digital assets, reportedly rose to $26 billion at one point. However, following FTX’s collapse and the scandal that followed, his net worth is said to have dropped to $100,000. In an interview with Axios, Bankman-Fried stated that he now has approximately $100,000 in his bank account and has lost 99% of his wealth.

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