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<!DOCTYPE html><html lang="en"><head><meta charSet="utf-8"/><meta name="viewport" content="width=device-width, initial-scale=1"/><link rel="preload" as="image" href="https://cdn.britannica.com/money/assets/MoneyLogo-30x236-2x.png"/><link rel="preload" as="image" href="https://cdn.britannica.com/80/238480-050-2BD22C05/Sam-Bankman-Fried-FTX.jpg?w=385"/><link rel="stylesheet" href="/money/_next/static/css/f0682462221b0c4c.css" data-precedence="next"/><link rel="stylesheet" href="/money/_next/static/css/70f86f4126b272f4.css" data-precedence="next"/><link rel="stylesheet" href="/money/_next/static/css/4e6e6f9238162df6.css" data-precedence="next"/><link rel="stylesheet" href="/money/_next/static/css/ab07b9459beb29f2.css" data-precedence="next"/><link rel="preload" as="script" fetchPriority="low" href="/money/_next/static/chunks/webpack-6c1d152b81cb421c.js"/><script src="/money/_next/static/chunks/fd9d1056-6730026ca15f88c2.js" async=""></script><script src="/money/_next/static/chunks/652-c67ff10dc3b7389f.js" async=""></script><script src="/money/_next/static/chunks/main-app-def13f62197ea19e.js" async=""></script><script src="/money/_next/static/chunks/795d4814-e1f5683a18c91424.js" async=""></script><script src="/money/_next/static/chunks/972-03669ff11a7548e3.js" async=""></script><script src="/money/_next/static/chunks/245-89868540f5e7487c.js" async=""></script><script src="/money/_next/static/chunks/app/global-error-b6970c4aeee958c5.js" async=""></script><script src="/money/_next/static/chunks/c16f53c3-0f06a74e21e459dc.js" async=""></script><script src="/money/_next/static/chunks/273-c82cf36e4c40ed3b.js" async=""></script><script src="/money/_next/static/chunks/455-82a93a210769ff1d.js" async=""></script><script src="/money/_next/static/chunks/66-fccb571d46fd91ac.js" async=""></script><script src="/money/_next/static/chunks/390-ce7f5816919422e6.js" async=""></script><script src="/money/_next/static/chunks/436-dfbf2b64012bc739.js" async=""></script><script src="/money/_next/static/chunks/app/layout-a87c11b281c20dec.js" async=""></script><script src="/money/_next/static/chunks/app/error-d8a44673e2033979.js" async=""></script><script src="/money/_next/static/chunks/963-42b2bec226af411d.js" async=""></script><script src="/money/_next/static/chunks/app/(container)/page-9a910babd4802014.js" async=""></script><script src="/money/_next/static/chunks/53c13509-8df938120b054bb2.js" async=""></script><script src="/money/_next/static/chunks/973-e16bcfddc38b191f.js" async=""></script><script src="/money/_next/static/chunks/app/(fluid)/%5B...contentPaths%5D/page-77e04db683f660ca.js" async=""></script><link rel="preload" href="https://www.googletagmanager.com/gtm.js?id=GTM-NRMG5CF" as="script"/><link rel="preload" href="https://securepubads.g.doubleclick.net/tag/js/gpt.js" as="script"/><link rel="preload" href="https://cdn.britannica.com/money/scripts/at.js" as="script"/><title>Sam Bankman-Fried | FTX, Education, Conviction, & Prison | Britannica Money</title><meta name="description" content="Sam Bankman-Fried is the founder and former CEO (2019–22) of FTX Trading, Ltd., a cryptocurrency exchange. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the market of digital assets. In November 2022 the exchange collapsed, and Bankman-Fried was convicted of fraud and conspiracy the following year."/><link rel="canonical" href="https://www.britannica.com/money/Sam-Bankman-Fried"/><meta property="og:title" content="Britannica Money"/><meta property="og:description" content="Sam Bankman-Fried is the founder and former CEO (2019–22) of FTX Trading, Ltd., a cryptocurrency exchange. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the market of digital assets. In November 2022 the exchange collapsed, and Bankman-Fried was convicted of fraud and conspiracy the following year."/><meta property="og:image:type" content="image/png"/><meta property="og:image:width" content="595"/><meta property="og:image:height" content="596"/><meta property="og:image:alt" content="Britannica thistle "/><meta property="og:image" content="https://www.britannica.com/money/money/opengraph-image.png?0ca1ca22e32fe0d6"/><meta name="twitter:card" content="summary_large_image"/><meta name="twitter:title" content="Britannica Money"/><meta name="twitter:description" content="Sam Bankman-Fried is the founder and former CEO (2019–22) of FTX Trading, Ltd., a cryptocurrency exchange. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the market of digital assets. In November 2022 the exchange collapsed, and Bankman-Fried was convicted of fraud and conspiracy the following year."/><meta name="twitter:image:type" content="image/png"/><meta name="twitter:image:width" content="595"/><meta name="twitter:image:height" content="596"/><meta name="twitter:image:alt" content="Britannica thistle "/><meta name="twitter:image" content="https://www.britannica.com/money/money/opengraph-image.png?0ca1ca22e32fe0d6"/><link rel="icon" href="/money/favicon.ico" type="image/x-icon" sizes="48x48"/><script src="/money/_next/static/chunks/polyfills-42372ed130431b0a.js" noModule=""></script></head><body class="britannica-money"><header class="MoneyGlobalNav_MoneyGlobalNav__7ITIF bg-white border-top-5 border-top-navy-dark position-sticky top-0 d-flex align-items-center" data-testid="MoneyGlobalNav"><div class="MoneyGlobalNav_container__gVvhH container-lg mx-auto align-items-center justify-content-between px-10 pr-sm-20"><div class="d-none"><a 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href="/money/Sam-Bankman-Fried#ref353834">Race to riches: becoming one of the world’s youngest billionaires</a></li><li class="link-black font-14 my-10"><a href="/money/Sam-Bankman-Fried#ref353835">FTX’s scandal and SBF’s arrest</a></li></ul><div class="font-14 font-weight-bold mt-20">Read More</div><div class="TableOfContents_RelatedArticle__yK5m6" data-testid="RelatedContents"><a href="/money/cryptocurrency" class="link-black" data-testid="RelatedContent-1-2114023-1"><div class="card card-sm card-horizontal my-15" data-testid="Card"><div class="card-media" data-testid="CardMedia" style="aspect-ratio:50/40"><img loading="lazy" src="https://cdn.britannica.com/68/231868-050-F337F890/Cryptocurrency-mining-farm-Italy-2022.jpg?c=crop&h=40&w=50" alt="Cryptocurrency mining farm" data-testid="IrisImage"/></div><div class="card-body" data-testid="CardBody"><div class="font-14">cryptocurrency</div></div></div></a><a href="/money/Elon-Musk" class="link-black" 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data-testid="CategoryLabel">Biographies</span></a></span><svg stroke="currentColor" fill="currentColor" stroke-width="0" viewBox="0 0 24 24" class="Breadcrumbs_CategoryLink__lg_ec mx-5" height="1em" width="1em" xmlns="http://www.w3.org/2000/svg"><path fill="none" d="M0 0h24v24H0V0z"></path><path d="M8.59 16.59 13.17 12 8.59 7.41 10 6l6 6-6 6-1.41-1.41z"></path></svg><span class="breadcrumb-item Breadcrumbs_CategoryLink__lg_ec my-5" data-testid="BreadcrumbItem"><a href="/money/browse/Entrepreneurs"><span class="Breadcrumbs_CategoryLink__lg_ec font-14" style="--category-color:var(--blue-strong)" data-testid="CategoryLabel">Entrepreneurs</span></a></span></nav></div><div class="mb-20 mb-sm-10"><h1 class="mb-5">Sam Bankman-Fried</h1><div class="mb-10 font-20 text-gray-700">American businessman</div><div class="mb-10" data-testid="ArticleUtilityBar"><button class="btn btn-outline-blue btn-xs py-5 px-10 shadow-sm mr-5" data-testid="ArticleUtilityBar-Print" type="button" 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3.61-.82-.34-3.69L23 12zm-12.91 4.72-3.8-3.81 1.48-1.48 2.32 2.33 5.85-5.87 1.48 1.48-7.33 7.35z"></path></svg>Cite</button><span hidden="" style="position:fixed;top:1px;left:1px;width:1px;height:0;padding:0;margin:-1px;overflow:hidden;clip:rect(0, 0, 0, 0);white-space:nowrap;border-width:0;display:none"></span><button class="btn btn-outline-blue btn-xs py-5 px-10 shadow-sm mr-5" data-testid="ArticleUtilityBar-Share" type="button" aria-label="Share"><svg stroke="currentColor" fill="currentColor" stroke-width="0" viewBox="0 0 24 24" class="ArticleUtilityBar_UtilityButtonIcon__6w04y mr-5" height="1em" width="1em" xmlns="http://www.w3.org/2000/svg"><path fill="none" d="M0 0h24v24H0z"></path><path d="M18 16.08c-.76 0-1.44.3-1.96.77L8.91 12.7c.05-.23.09-.46.09-.7s-.04-.47-.09-.7l7.05-4.11c.54.5 1.25.81 2.04.81 1.66 0 3-1.34 3-3s-1.34-3-3-3-3 1.34-3 3c0 .24.04.47.09.7L8.04 9.81C7.5 9.31 6.79 9 6 9c-1.66 0-3 1.34-3 3s1.34 3 3 3c.79 0 1.5-.31 2.04-.81l7.12 4.16c-.05.21-.08.43-.08.65 0 1.61 1.31 2.92 2.92 2.92 1.61 0 2.92-1.31 2.92-2.92s-1.31-2.92-2.92-2.92z"></path></svg>Share</button><span hidden="" style="position:fixed;top:1px;left:1px;width:1px;height:0;padding:0;margin:-1px;overflow:hidden;clip:rect(0, 0, 0, 0);white-space:nowrap;border-width:0;display:none"></span></div><div class="caption mt-10">Also known as: SBF</div><div class="" data-testid="BylinesWrapper"><strong class="font-12 mr-5 text-center">Written by</strong><span class="mr-5" data-testid="Byline"><span class="Byline_popoverTrigger__xVs4j font-14" id="_R6eajjtsuesq">Adam Zeidan</span></span><div class="popover AuthorPopover_AuthorPopover__0W0b4" data-testid="Popover"><a class="font-weight-semi-bold" href="/money/author/Adam-Zeidan/12409087">Adam Zeidan</a><div class="AuthorPopover_shortBio__1tFaf mt-5 font-14 font-serif text-gray-700 line-clamp clamp-4">Adam Zeidan is an Assistant Managing Editor, having joined <em>Encyclopædia Britannica</em> in 2018. He covers a range of topics related primarily to the Middle East and North Africa.</div><div data-popper-arrow="true"></div></div></div><strong class="font-12 mr-5">Fact-checked by</strong><span class="mr-5" data-testid="Byline"><span class="Byline_popoverTrigger__xVs4j font-14" id="_R6majjtsuesq">The Editors of Encyclopaedia Britannica</span></span><div class="popover AuthorPopover_AuthorPopover__0W0b4" data-testid="Popover"><a class="font-weight-semi-bold" href="/money/author/The-Editors-of-Encyclopaedia-Britannica/4419">The Editors of Encyclopaedia Britannica</a><div class="AuthorPopover_shortBio__1tFaf mt-5 font-14 font-serif text-gray-700 line-clamp clamp-4">Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.</div><div data-popper-arrow="true"></div></div><div class="caption mt-5 d-flex" data-testid="ContentDateAndHistory"></div></div><div class="TableOfContents_TableOfContents__g8WLR d-none" data-testid="TableOfContents"><div class="font-16 font-weight-bold">Table of Contents</div><hr class="mt-0"/><ul class="TableOfContents_TableOfContentsList__yU1tL p-0 mt-0 mb-0 list-unstyled pl-5" style="--category-color:var(--blue-strong)"><li class="link-black font-14 my-10"><a href="/money/Sam-Bankman-Fried#ref2217244-1">Introduction & Quick Facts</a></li><li class="link-black font-14 my-10"><a href="/money/Sam-Bankman-Fried#ref353834">Race to riches: becoming one of the world’s youngest billionaires</a></li><li class="link-black font-14 my-10"><a href="/money/Sam-Bankman-Fried#ref353835">FTX’s scandal and SBF’s arrest</a></li></ul><div class="font-14 font-weight-bold mt-20">Read More</div><div class="TableOfContents_RelatedArticle__yK5m6" data-testid="RelatedContents"><a href="/money/cryptocurrency" class="link-black" data-testid="RelatedContent-1-2114023-1"><div class="card card-sm card-horizontal my-15" data-testid="Card"><div class="card-media" data-testid="CardMedia" style="aspect-ratio:50/40"><img loading="lazy" src="https://cdn.britannica.com/68/231868-050-F337F890/Cryptocurrency-mining-farm-Italy-2022.jpg?c=crop&h=40&w=50" alt="Cryptocurrency mining farm" data-testid="IrisImage"/></div><div class="card-body" data-testid="CardBody"><div class="font-14">cryptocurrency</div></div></div></a><a href="/money/Elon-Musk" class="link-black" data-testid="RelatedContent-1-1676437-1"><div class="card card-sm card-horizontal my-15" data-testid="Card"><div class="card-media" data-testid="CardMedia" style="aspect-ratio:50/40"><img loading="lazy" src="https://cdn.britannica.com/05/236505-050-17B6E34A/Elon-Musk-2022.jpg?c=crop&h=40&w=50" alt="Elon Musk" data-testid="IrisImage"/></div><div class="card-body" data-testid="CardBody"><div class="font-14">Elon Musk</div></div></div></a><a href="/money/Howard-Hughes" class="link-black" data-testid="RelatedContent-1-274919-1"><div class="card card-sm card-horizontal my-15" data-testid="Card"><div class="card-media" data-testid="CardMedia" style="aspect-ratio:50/40"><img loading="lazy" src="https://cdn.britannica.com/21/60821-050-F755B5A3/Howard-Hughes-aviator-industrialist-American-motion-picture-producer-1936.jpg?c=crop&h=40&w=50" alt="Howard Hughes" data-testid="IrisImage"/></div><div class="card-body" data-testid="CardBody"><div class="font-14">Howard Hughes</div></div></div></a></div></div><button class="btn btn-outline-undefined TableOfContents_MobileTableOfContentsButton__dHpRi d-md-none mb-20 w-100" data-testid="MobileTableOfContents" type="button" aria-label="Table Of Contents" style="--category-color:var(--blue-strong)"><svg stroke="currentColor" fill="currentColor" stroke-width="0" viewBox="0 0 24 24" height="1em" width="1em" xmlns="http://www.w3.org/2000/svg"><path fill="none" d="M0 0h24v24H0V0z"></path><path d="M4 10.5c-.83 0-1.5.67-1.5 1.5s.67 1.5 1.5 1.5 1.5-.67 1.5-1.5-.67-1.5-1.5-1.5zm0-6c-.83 0-1.5.67-1.5 1.5S3.17 7.5 4 7.5 5.5 6.83 5.5 6 4.83 4.5 4 4.5zm0 12c-.83 0-1.5.68-1.5 1.5s.68 1.5 1.5 1.5 1.5-.68 1.5-1.5-.67-1.5-1.5-1.5zM7 19h14v-2H7v2zm0-6h14v-2H7v2zm0-8v2h14V5H7z"></path></svg><span class="font-18 ml-5">Table Of Contents</span></button><span hidden="" style="position:fixed;top:1px;left:1px;width:1px;height:0;padding:0;margin:-1px;overflow:hidden;clip:rect(0, 0, 0, 0);white-space:nowrap;border-width:0;display:none"></span><div class="font-serif font-18 lh-lg dropCapArticle"><div class="Article_floatedHeroComponents__8_NjL"><div class="mb-10 BorderlessCard_BorderlessCard__u5tTW d-inline-block w-100 pb-0 rounded border p-10" data-testid="BorderlessCard"><div class="w-100 position-relative d-flex"><img loading="eager" src="https://cdn.britannica.com/80/238480-050-2BD22C05/Sam-Bankman-Fried-FTX.jpg?w=385" alt="Sam Bankman-Fried" width="385" data-testid="IrisImage" class="border rounded w-100"/><button class="btn btn-outline-blue-dark btn-xl btn-circle CircleIconButton_CircleIconButton__HkIE0 position-absolute bottom-10 right-10 bg-white" data-testid="CircleIconButton" type="button" aria-label="Open full size image" id="_R1ijjtsuesq"><svg stroke="currentColor" fill="currentColor" stroke-width="0" viewBox="0 0 24 24" height="1em" width="1em" xmlns="http://www.w3.org/2000/svg"><path fill="none" d="M0 0h24v24H0V0z"></path><path d="M15.5 14h-.79l-.28-.27A6.471 6.471 0 0 0 16 9.5 6.5 6.5 0 1 0 9.5 16c1.61 0 3.09-.59 4.23-1.57l.27.28v.79l5 4.99L20.49 19l-4.99-5zm-6 0C7.01 14 5 11.99 5 9.5S7.01 5 9.5 5 14 7.01 14 9.5 11.99 14 9.5 14z"></path><path d="M12 10h-2v2H9v-2H7V9h2V7h1v2h2v1z"></path></svg></button><div class="tooltip font-16" data-testid="Tooltip">Open full sized image<div data-popper-arrow="true"></div></div></div><div class="font-serif text-gray-700 mt-5 font-14 text-left">Sam Bankman-Fried in Nassau, Bahamas, April 26, 2022.</div><div class="font-serif text-gray-700 mt-5 font-12 font-italic mb-10 text-left">Erika P. Rodriguez—Chicago Tribune/TNS/Alamy</div></div></div><div class="QuickFacts_quickFacts__FMF2_ border rounded p-20 mb-20 ml-sm-20 mx-auto font-14 bg-white font-sans-serif"><div class="" data-testid="QuickFacts-Facts"><div class="QuickFacts_fact__5ukCJ position-relative mb-10 line-clamp clamp-3"><dl class=""> <dt class="font-weight-bold text-capitalize mr-5">also called:</dt><dd>SBF</dd></dl></div><div class="QuickFacts_fact__5ukCJ position-relative mb-10 line-clamp clamp-3"><dl class=""> <dt class="font-weight-bold text-capitalize mr-5">born:</dt><dd>March 6, 1992, Stanford, <a href="/place/California-state">California</a>, U.S. (age 32)</dd></dl></div><div class="QuickFacts_fact__5ukCJ position-relative line-clamp clamp-3"><dl class=""> <dt class="font-weight-bold text-capitalize mr-5">Founder:</dt><dd><a href="/topic/FTX">FTX</a></dd></dl></div></div></div><section class="HTMLContent_HTMLContent__cOyPs" data-testid="HTMLContent"><span id="ref2217244-1" data-level="1" /><p><strong><span id="ref1308181" />Sam Bankman-Fried</strong> (born March 6, 1992, Stanford, <a href="/place/California-state">California</a>, U.S.) was the founder and former <a href="/money/chief-executive-officer">chief executive officer</a> (2019–22) of <span id="ref1308211" />FTX Trading Ltd., a <a href="/money/top-crypto-exchanges">cryptocurrency exchange</a>. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the <a href="/money/what-is-cryptocurrency">market of digital assets</a> and in discussions in the <a href="/topic/Congress-of-the-United-States">United States Congress</a> regarding the industry’s regulation. It was closely tied to Alameda Research LLC, a <a href="/money/what-is-a-market-maker">quantitative trading</a> firm Bankman-Fried had cofounded in 2017. The exchange collapsed suddenly in November 2022 when revelations of broad mismanagement at both FTX and Alameda Research led to a run on customer deposits. The following year Bankman-Fried was convicted of wire fraud, conspiracy, and <a href="/topic/money-laundering">money laundering</a>, and he was later sentenced to 25 years in prison.</p></section><section class="HTMLContent_HTMLContent__cOyPs" data-testid="HTMLContent"><span id="ref353834" data-level="1" /><h2 class="h2">Race to riches: becoming one of the world’s youngest billionaires</h2><p>Bankman-Fried was born in 1992 to Joseph Bankman and Barbara Fried, scholars of <a href="/money/taxation">tax</a> law. He attended the <a href="/topic/Massachusetts-Institute-of-Technology">Massachusetts Institute of Technology</a> (MIT), where he received a <a href="/topic/bachelors-degree">bachelor’s degree</a> in <a href="/science/physics-science">physics</a> in 2014. While studying at MIT, he began engaging with “effective altruism,” a philosophical movement inspired in part by the <a href="/topic/utilitarianism-philosophy">utilitarian</a> school of <a href="/biography/Peter-Singer">Peter Singer</a>. The movement’s <a href="/topic/empiricism">empirical</a> approach to <a href="/topic/philanthropy">philanthropy</a> justifies the accumulation of enormous sums of wealth, so long as that wealth is then given to good causes that could improve or save others’ lives. When Bankman-Fried had lunch with one of the movement’s foundational thinkers—an <a href="/topic/University-of-Oxford">Oxford</a> doctoral student in his mid-20s—he was convinced to leverage his mathematical aptitude to meet philanthropic ends. Shortly after graduating, he joined Jane Street Capital, LLC, a quantitative trading firm, and traded <a href="/money/stock-finance">equities</a> and <a href="/money/exchange-traded-funds-etfs">exchange-traded funds</a> (ETFs).</p><p>In 2017 Bankman-Fried left Jane Street and, while working briefly at the Centre for Effective Altruism, used <a href="/money/what-is-arbitrage">arbitrage strategies</a> he had learned as a trader to push the limits of his earnings. He began trading <a href="/money/Bitcoin">Bitcoin</a>, a cryptocurrency with high <a href="/money/stock-market-volatility">volatility</a>—and therefore high potential payoff—partly due to the limited regulation of digital assets. Later that year he cofounded Alameda Research LLC, a quantitative trading firm with an <a href="/topic/arbitrage-finance">arbitrage</a> model focused on digital assets. Within months the company at times would make as much as a million dollars a day in profit.</p><p>In 2019 he set up FTX Trading Ltd., a cryptocurrency <a href="/money/derivatives">derivatives</a> platform, in an effort to attract continued <a href="/money/investment">investment</a>. The exchange offered discounts to customers who conducted trades using its <a href="/money/what-are-altcoins-tokens#ref352190">native token</a>, called FTX Token (FTT). Alameda Research became one of the largest holders of FTT before the token was floated on the market, allowing the firm to function as the token’s market maker and maintain the stability of its price. Bankman-Fried believed the fusion of <a href="/money/stock-broker-vs-stock-exchange">exchange, broker, and market maker</a> would enable maximum efficiency, a single aggregate risk view, and real-time <a href="/money/how-buy-sell-order-works#ref355382">clearing and settlement</a>.</p><p>By the turn of the decade, Bankman-Fried had established himself as a donor to be reckoned with. Already a billionaire in 2020, he began donating large sums to U.S. political campaigns, including millions of dollars to <a href="/biography/Joe-Biden">Joe Biden</a>’s presidential campaign that year. In the 2022 <a href="/topic/midterm-election">midterm election</a> cycle, Bankman-Fried was the second largest individual donor to <a href="/topic/Democratic-Party">Democratic</a> campaigns. He also gave to a large variety of causes, favoring projects with potential future payouts for humanity (such as <a href="/science/pandemic">pandemic</a> preparedness) over those that would alleviate immediate suffering (such as providing mosquito nets to prevent <a href="/science/malaria">malaria</a>). While Bankman-Fried cultivated the public image of an everyman, wearing nondescript clothing and espousing his philanthropic values when marketing FTX, he lived a lavish lifestyle in the <a href="/place/The-Bahamas">Bahamas</a> that garnered less attention.</p><p>He caught the ear of several members of the U.S. Congress, where he twice formally testified on the <a href="/money/cryptocurrency-regulation">regulation of digital currencies</a>, <a class="external" target="_blank" rel="noopener" href="https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-bankman-frieds-20211208.pdf">first</a> in December 2021 and <a class="external" target="_blank" rel="noopener" href="https://www.agriculture.senate.gov/imo/media/doc/Testimony_Bankman-Fried_0209202211.pdf">again</a> in February 2022. In his testimonies he advised Congress to build a regulatory framework around existing policy, with the <a href="/topic/Commodity-Futures-Trading-Commission">Commodity Futures Trading Commission</a> (CFTC) as the primary regulator, and in a flexible manner that could respond to the evolving nature of the digital assets market.</p><span id="ref353835" data-level="1" /><h2 class="h2">FTX’s scandal and SBF’s arrest</h2><p>Meanwhile, as the cryptocurrency market crashed in mid-2022, FTX stood out in the industry as resilient. Not only did it remain profitable, but Bankman-Fried bailed out several firms in the industry that had failed to navigate the crash. Alameda Research, on the other hand, was in trouble. Lenders, shaken by what had happened to less successful firms, recalled funds that Alameda Research had used in <a href="/money/venture-capitalist-angel-investing">venture investments</a>. When Alameda Research sought help from FTX to meet its lenders’ demands, FTX silently dipped deep into its customer deposits in order to loan Alameda Research the money that it needed.</p><p>Months later the relationship between Alameda Research and FTX was brought under scrutiny. On November 2, 2022, a website specializing in news coverage of the digital assets market reported details from a leaked Alameda Research <a href="/money/balance-sheet">balance sheet</a>. Those details indicated that the firm was propped up by its FTT holdings, indicating a much weaker foundation for FTT than previously known and shaking <a href="/money/consumer-confidence">consumer confidence</a> in the token. Days later the value of FTT began collapsing after the CEO of Binance, a competing exchange, announced that it would sell off its holdings of the token. The announcement initiated a run on the asset, but FTX did not have the funds to pay off everyone who wanted to cash in their tokens. On November 11 it was reported that at least $1 billion in customer funds had gone missing.</p><p>The sudden collapse of FTX, despite its reputation as a stable and reliable exchange, highlighted the lack of transparency and accountability in the digital assets market. Not only was the handling of FTX’s finances opaque, but it was also remarkably lax. In December during a congressional hearing about the collapse, it was revealed that employees had handled invoices via <a href="/topic/instant-messaging">instant messaging</a> and that bookkeeping had been conducted using basic accounting software designed for small-business use.</p><p>In the aftermath of the collapse, Bankman-Fried made a bizarre media blitz, offering the public a <em>mea culpa</em>, apparently without grasping the gravity of his wrongdoing. He confessed that he had gotten “a little cocky” and “wasn’t spending any time or effort trying to manage risk on FTX” but insisted that he “didn’t knowingly commingle funds” and “didn’t ever try to commit fraud.” He acknowledged “messy accounting” and “huge management failures,” but his explanation did little to assuage the losses suffered by a massive number of customers. For all his intent on being an effective altruist, it was as if he were unaware of the age-old <a href="/art/aphorism">aphorism</a> “The road to hell is paved with good intentions.” On December 12, 2022, he was taken into custody at his home in the Bahamas; the following day, he was indicted on eight criminal charges by the <a href="/topic/US-Department-of-Justice">U.S. Department of Justice</a> and two separate civil charges by the CFTC and the <a href="/money/Securities-and-Exchange-Commission">Securities and Exchange Commission</a> (SEC).</p><p>Bankman-Fried went on trial in October 2023, charged with seven counts of fraud, conspiracy, and money laundering. The following month he was convicted on all charges. In March 2024 he was sentenced to 25 years in prison and ordered to surrender more than $11 billion in assets.</p></section><span class="Signature_signature__PzeTY d-block border-left font-italic pb-5 pl-10 mt-10 font-14" data-testid="Signature"><a href="/money/author/Adam-Zeidan/12409087">Adam Zeidan</a></span></div></div><aside class="d-none d-lg-block cm-right-rail col-da-320 z-1" data-testid="RightRail"></aside></div><div data-page-index="1" data-testid="PageSentinel"></div></div></main><footer class="Footer_Footer__h6k1G text-align-center pb-100" data-testid="Footer"><div class="pt-30 pt-md-40 mx-25 mx-md-0"><a href="/money"><img loading="lazy" src="https://cdn.britannica.com/money/assets/Money-475x60-footer-2x.png?h=47&w=390" alt="Britannica Money Logo" data-testid="IrisImage"/></a></div><div class="Footer_SubLinks__z2QDt my-30 font-weight-semi-bold font-weight-semi-bold d-flex flex-row tw-justify-center tw-items-center"><a class="mx-20" href="/money/about">About Us</a><a 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Home buying and selling, taking out a mortgage or home loan, remodeling, and other home-related decisions require education and planning.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdLocalOffer\",\"color\":\"blue\"},\"slug\":\"Mortgage-Home\",\"url\":\"/money/browse/Mortgage-Home\"},{\"id\":13308,\"parentId\":13300,\"title\":\"Taxes\",\"description\":\"You probably know Ben Franklin's adage about death and taxes, but back in Ben's day, taxes weren't nearly as numerous—nor as complex. Learn about taxes on income, capital gains, property, sales, and more.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdLocalOffer\",\"color\":\"blue\"},\"slug\":\"Household-Taxes\",\"url\":\"/money/browse/Household-Taxes\"}]},{\"category\":{\"id\":13100,\"parentId\":13000,\"title\":\"Investing\",\"description\":\"Investing is about identifying opportunities for long-term growth of your portfolio. Stocks, bonds, mutual funds, ETFs, and alternative investments such as commodities and real estate, are part of a vast market ecosystem.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"investing\",\"url\":\"/money/browse/investing\"},\"subcategories\":[{\"id\":13110,\"parentId\":13100,\"title\":\"Alternative Investments\",\"description\":\"alts\\\") would be everything else. Learn about commodities, precious metals, derivatives, real estate, art, and collectibles—and the institutional traders and fund managers who invest in them.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Alternative-Investments\",\"url\":\"/money/browse/Alternative-Investments\"},{\"id\":13111,\"parentId\":13100,\"title\":\"Bonds \u0026 Fixed Income\",\"description\":\"A diversified investment portfolio typically includes bonds and other fixed-income securities. But like all invements, fixed income has its share of product types, risks, and complexities that are worth exploring and understanding.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Bonds-Fixed-Income\",\"url\":\"/money/browse/Bonds-Fixed-Income\"},{\"id\":13113,\"parentId\":13100,\"title\":\"ETFs \u0026 Mutual Funds\",\"description\":\"Exchange-traded funds (ETFs) and mutual funds are baskets of stocks, bonds, and other securities. A fund may track an index such as the S\u0026P 500, or it may be tied to a sector, industry, risk profile, or strategy.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"ETFs-Mutual-Funds\",\"url\":\"/money/browse/ETFs-Mutual-Funds\"},{\"id\":13112,\"parentId\":13100,\"title\":\"Economic Data\",\"description\":\"No exploration of investment opportunies is complete without context of the economic realities of the day. Economic data includes government reports such as GDP, unemployment, inflation, and housing numbers, as well as trends in fiscal and monetary policy.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Economic-Data\",\"url\":\"/money/browse/Economic-Data\"},{\"id\":13114,\"parentId\":13100,\"title\":\"Fundamental Analysis\",\"description\":\"Does a specific stock deserve a place in your portfolio? Due diligence starts with fundamental analysis: Earnings and earnings ratios, financial statements, growth and growth potential, and the competitive environment.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Fundamental-Analysis\",\"url\":\"/money/browse/Fundamental-Analysis\"},{\"id\":13115,\"parentId\":13100,\"title\":\"Markets \u0026 Regulation\",\"description\":\"Modern financial markets are relatively easy to navigate, but amazingly complex when you dig beneath the surface. Learn how markets work, who the players are, how money and securities change hands, and how the system is regulated.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Markets-Regulation\",\"url\":\"/money/browse/Markets-Regulation\"},{\"id\":13116,\"parentId\":13100,\"title\":\"Portfolio Management\",\"description\":\"Your portfolio is the amalgamation of all your assets—stocks, bonds, real estate, the funds in your 401(k), and your cash. A well-managed portfolio will aim for solid long-term returns—adjusted for your risk tolerance and time horizon—and will shift along with your changing objectives.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Portfolio-Management\",\"url\":\"/money/browse/Portfolio-Management\"},{\"id\":13117,\"parentId\":13100,\"title\":\"Stocks \u0026 Indexes\",\"description\":\"A stock represents partial ownership of a company, and a stock index tracks a basket of stocks of different companies. Learn the ins and outs of the stock market, the 11 sectors within it, and the various indexes that measure its overall performance.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdShowChart\",\"color\":\"orange\"},\"slug\":\"Stocks-Indexes\",\"url\":\"/money/browse/Stocks-Indexes\"}]},{\"category\":{\"id\":13400,\"parentId\":13000,\"title\":\"Trading\",\"description\":\"Trading is the short-term buying and selling of stocks, commodities, options, cryptocurrencies, and other securities. Trading has different objectives and strategies than long-term investing. Traders use technical analysis, buy and sell on margin, and look to capture price inefficiencies.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Trading\",\"url\":\"/money/browse/Trading\"},\"subcategories\":[{\"id\":13401,\"parentId\":13400,\"title\":\"Crypto \u0026 Foreign Exchange\",\"description\":\"Active trading in foreign exchange (“forex”) has been around for decades, while cryptocurrencies are relative newcomers. Both track the relative value of currencies or cryptocurrencies: dollars, euro, yen, and pounds as well as Bitcoin, Ethereum, Solana, and Dogecoin.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Crypto-Foreign-Exchange\",\"url\":\"/money/browse/Crypto-Foreign-Exchange\"},{\"id\":13402,\"parentId\":13400,\"title\":\"Futures \u0026 Margin Trading\",\"description\":\"Futures contracts allow traders and investors to speculate on the direction of—and hedge underlying positions in—stock indexes, interest rates, commodities, precious metals, and more.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Futures-Margin-Trading\",\"url\":\"/money/browse/Futures-Margin-Trading\"},{\"id\":13403,\"parentId\":13400,\"title\":\"Options Trading\",\"description\":\"Options are derivative contracts that give the buyer the right to buy or sell a security at a specific price. Options can be flexible and capital efficient. But understanding the math behind them, plus the lingo, strategies, and risk parameters, requires some training.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Options-Trading\",\"url\":\"/money/browse/Options-Trading\"},{\"id\":13404,\"parentId\":13400,\"title\":\"Technical Analysis\",\"description\":\"Is there predictive power in price and volume data? Technical analysts watch the charts, look for patterns, and use a blend of art and science to try to optimize the timing and price levels for buy and sell orders.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Technical-Analysis\",\"url\":\"/money/browse/Technical-Analysis\"},{\"id\":13405,\"parentId\":13400,\"title\":\"Trading Strategy\",\"description\":\"Active trading requires some specialized skill—and a special mindset. Learn how to manage capital and trading positions, as well as emotions and biases. \",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdOutlineToll\",\"color\":\"violet-strong\"},\"slug\":\"Trading-Strategy\",\"url\":\"/money/browse/Trading-Strategy\"}]},{\"category\":{\"id\":13200,\"parentId\":13000,\"title\":\"Retirement\",\"description\":\"We all dream of a comfortable retirement. Learn all about the various retirement savings accounts and how to maximize them. Careful planning of your retirement income, budget, and lifestyle can help make sure you don't outlive your money.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"retirement\",\"url\":\"/money/browse/retirement\"},\"subcategories\":[{\"id\":13201,\"parentId\":13200,\"title\":\"Defined Contribution Plans\",\"description\":\"401(k) plans and individual retirement accounts (IRAs) are examples of defined contribution plans. You decide how much to contribute, and those savings are invested to compound and (hopefully) capture market earnings. Learn about traditional, Roth, SEP, and SIMPLE plans, as well as 403(b), 457, and solo 401(k) plans.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Defined-Contribution-Plans\",\"url\":\"/money/browse/Defined-Contribution-Plans\"},{\"id\":13202,\"parentId\":13200,\"title\":\"Estate Planning\",\"description\":\"Estate planning isn't just for the wealthy. Pretty much anyone with assets, families, and even pets should have plans in place—just in case.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Estate-Planning\",\"url\":\"/money/browse/Estate-Planning\"},{\"id\":13203,\"parentId\":13200,\"title\":\"Pensions \u0026 Annuities\",\"description\":\"An annuity is a series of payments made at fixed, regular intervals. Defined benefit plans (such as government and company pension plans) are one type of annuity. Insurance companies also sell annuity products that are designed to offer predictable income streams in retirement. But fair warning: they're complex.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Pensions-Annuities\",\"url\":\"/money/browse/Pensions-Annuities\"},{\"id\":13204,\"parentId\":13200,\"title\":\"Retirement Living\",\"description\":\"Throughout your career, you've been looking forward to retirement. But once you're there, you have a brand new set of decisions to make: travel, budgeting, tackling the bucket list, and maybe even taking on a new job or side hustle. Retirement living: It's a new beginning.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Retirement-Living\",\"url\":\"/money/browse/Retirement-Living\"},{\"id\":13205,\"parentId\":13200,\"title\":\"Retirement Planning\",\"description\":\"Are you expecting a long and comfortable retirement? Plan ahead. Will your savings and income streams support all your dreams for your golden years? And do you have contingency plans in case things change? Learn how to plan and strategize for retirement.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Retirement-Planning\",\"url\":\"/money/browse/Retirement-Planning\"},{\"id\":13206,\"parentId\":13200,\"title\":\"Social Security \u0026 Medicare\",\"description\":\"Most of us pay into Social Security and Medicare throughout our working lives; in retirement, we receive benefits. But to get the most out of these two government programs—and tailor them to your personal situation—you need to learn how they work.\",\"imageUrl\":\"https://cdn.britannica.com/21/235621-159-24129B3B/britannica-money-default-subject-logo-retirement.jpg\",\"categoryIcon\":{\"name\":\"MdSavings\",\"color\":\"green\"},\"slug\":\"Social-Security-Medicare\",\"url\":\"/money/browse/Social-Security-Medicare\"}]},{\"category\":{\"id\":13700,\"parentId\":13000,\"title\":\"Companies\",\"description\":\"The Global Industry Classification Standard (GICS) places companies into eleven sectors: Communication services, consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, real estate, and utilities.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Companies\",\"url\":\"/money/browse/Companies\"},\"subcategories\":[{\"id\":13709,\"parentId\":13700,\"title\":\"Communication Services\",\"description\":\"Communication services, added in 2018, includes traditional and social media, web platforms, video game makers, and telecom providers. Companies include AT\u0026T, Netflix, Facebook parent Meta, and Google parent Alphabet.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Communication-Services\",\"url\":\"/money/browse/Communication-Services\"},{\"id\":13704,\"parentId\":13700,\"title\":\"Consumer Discretionary\",\"description\":\"Discretionary companies - autos, travel and entertainment companies, apparel makers, and e-commerce - tend to rise and fall with the consumer economy. Companies include Ford, Nike, Disney, McDonald’s, and Amazon.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Consumer-Discretionary\",\"url\":\"/money/browse/Consumer-Discretionary\"},{\"id\":13705,\"parentId\":13700,\"title\":\"Consumer Staples\",\"description\":\"Staples are everyday products such as toothpaste, detergent, food and beverages, groceries, and beauty supplies. Companies include Costco, Walmart, Coca-Cola, and Procter \u0026 Gamble.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Consumer-Staples\",\"url\":\"/money/browse/Consumer-Staples\"},{\"id\":13701,\"parentId\":13700,\"title\":\"Energy\",\"description\":\"The energy sector, which includes oil and gas producers, pipeline builders, and refineries, tends to follow commodities. Companies include ExxonMobil, Halliburton, Chevron, Occidental, and ConocoPhillips.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Energy\",\"url\":\"/money/browse/Energy\"},{\"id\":13707,\"parentId\":13700,\"title\":\"Financials\",\"description\":\"The financials sector includes insurance, commercial and investment banks, brokers, and credit card and payment providers. Companies include JPMorganChase, PayPal, Allstate, Visa, BlackRock, and Goldman Sachs.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Financials\",\"url\":\"/money/browse/Financials\"},{\"id\":13706,\"parentId\":13700,\"title\":\"Health Care\",\"description\":\"The health care sector includes pharmaceuticals, medical devices, biotechnology, and health insurance companies. Top names include Pfizer, UnitedHealth, Medtronic, and Johnson \u0026 Johnson.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Health-Care\",\"url\":\"/money/browse/Health-Care\"},{\"id\":13703,\"parentId\":13700,\"title\":\"Industrials\",\"description\":\"The industrials sector includes construction, agricultural machinery, airplanes, defense (weapons) contractors, railroads, and delivery companies. Top names include Lockheed Martin, Boeing, Caterpillar, FedEx, 3M, and CSX.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Industrials\",\"url\":\"/money/browse/Industrials\"},{\"id\":13708,\"parentId\":13700,\"title\":\"Information Technology\",\"description\":\"The growth-oriented tech sector makes and services semiconductors, cell phones, computer hardware and software, and services such as cloud computing. Companies include Apple, Microsoft, NVIDIA, and Cisco.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Information-Technology\",\"url\":\"/money/browse/Information-Technology\"},{\"id\":13702,\"parentId\":13700,\"title\":\"Materials\",\"description\":\"The materials sector includes agricultural services, miners, and makers of paper, steel, and chemicals. Typically growth-oriented dividend payers, companies include International Paper, Alcoa, Dow, Freeport-McMoRan, and Newmont.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Materials\",\"url\":\"/money/browse/Materials\"},{\"id\":13710,\"parentId\":13700,\"title\":\"Utilities\",\"description\":\"Known for stability and a history of solid dividends, the utilities sector includes electricity providers, nuclear power companies, and waste haulers. Companies include NextEra, Waste Management, and Duke Energy.\",\"imageUrl\":\"https://cdn.britannica.com/20/235620-159-F34405A1/britannica-money-default-subject-logo-investment.jpg\",\"categoryIcon\":{\"name\":\"MdBarChart\",\"color\":\"red\"},\"slug\":\"Utilities\",\"url\":\"/money/browse/Utilities\"}]},{\"category\":{\"id\":13600,\"parentId\":13000,\"title\":\"Biographies\",\"description\":\"Behind all the great ideas, philosophies, inventions, and industries are people who create, cultivate, and lead. Learn about the entrepreneurs, financiers, business executives, and economic thought leaders who shaped the world of money and finance.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdPerson2\",\"color\":\"blue-strong\"},\"slug\":\"Biographies\",\"url\":\"/money/browse/Biographies\"},\"subcategories\":[{\"id\":13601,\"parentId\":13600,\"title\":\"Bankers \u0026 Financiers\",\"description\":\"Learn about the bankers, financiers, and other facilitators of capital market growth throughout history - those who underwrote the industrial revolution, the building of railroads and automobiles, and today’s technology platforms.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdPerson2\",\"color\":\"blue-strong\"},\"slug\":\"Bankers-Financiers\",\"url\":\"/money/browse/Bankers-Financiers\"},{\"id\":13602,\"parentId\":13600,\"title\":\"Business Executives\",\"description\":\"Learn about the men \u0026 women who helped - and are helping - shape global corporations, private businesses, sports teams, \u0026 technology start-ups.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdPerson2\",\"color\":\"blue-strong\"},\"slug\":\"Businesspeople-Executives\",\"url\":\"/money/browse/Businesspeople-Executives\"},{\"id\":13603,\"parentId\":13600,\"title\":\"Economists\",\"description\":\"Learn about the academics, researchers, statisticians, and policymakers who shaped the economy—plus the thought leadership, models, formulas, and philosophies they crafted and implemented.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdPerson2\",\"color\":\"blue-strong\"},\"slug\":\"Economists\",\"url\":\"/money/browse/Economists\"},{\"id\":13604,\"parentId\":13600,\"title\":\"Entrepreneurs\",\"description\":\"Entrepreneurs bear the economic uncertainties and risks of starting and running new businesses to generate profit and economic value. Learn about these industrialists, number crunchers, and technology innovators.\",\"imageUrl\":\"https://cdn.britannica.com/22/235622-159-A518C19F/britannica-money-default-subject-logo-home-finance.jpg\",\"categoryIcon\":{\"name\":\"MdPerson2\",\"color\":\"blue-strong\"},\"slug\":\"Entrepreneurs\",\"url\":\"/money/browse/Entrepreneurs\"}]},{\"category\":{\"id\":13500,\"parentId\":13000,\"title\":\"Finance \u0026 the Economy\",\"description\":\"Explore the full spectrum of finance and economics, from historical frameworks to contemporary topics. 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The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the \u003ca href=\"/money/what-is-cryptocurrency\"\u003emarket of digital assets\u003c/a\u003e and in discussions in the \u003ca href=\"/topic/Congress-of-the-United-States\"\u003eUnited States Congress\u003c/a\u003e regarding the industry’s regulation. It was closely tied to Alameda Research LLC, a \u003ca href=\"/money/what-is-a-market-maker\"\u003equantitative trading\u003c/a\u003e firm Bankman-Fried had cofounded in 2017. The exchange collapsed suddenly in November 2022 when revelations of broad mismanagement at both FTX and Alameda Research led to a run on customer deposits. The following year Bankman-Fried was convicted of wire fraud, conspiracy, and \u003ca href=\"/topic/money-laundering\"\u003emoney laundering\u003c/a\u003e, and he was later sentenced to 25 years in prison.\u003c/p\u003e\u003c!--[P-1]--\u003e1b:T223d,"])</script><script>self.__next_f.push([1,"\u003cspan id=\"ref353834\" data-level=\"1\" /\u003e\u003ch2 class=\"h2\"\u003eRace to riches: becoming one of the world’s youngest billionaires\u003c/h2\u003e\u003cp\u003eBankman-Fried was born in 1992 to Joseph Bankman and Barbara Fried, scholars of \u003ca href=\"/money/taxation\"\u003etax\u003c/a\u003e law. He attended the \u003ca href=\"/topic/Massachusetts-Institute-of-Technology\"\u003eMassachusetts Institute of Technology\u003c/a\u003e (MIT), where he received a \u003ca href=\"/topic/bachelors-degree\"\u003ebachelor’s degree\u003c/a\u003e in \u003ca href=\"/science/physics-science\"\u003ephysics\u003c/a\u003e in 2014. While studying at MIT, he began engaging with “effective altruism,” a philosophical movement inspired in part by the \u003ca href=\"/topic/utilitarianism-philosophy\"\u003eutilitarian\u003c/a\u003e school of \u003ca href=\"/biography/Peter-Singer\"\u003ePeter Singer\u003c/a\u003e. The movement’s \u003ca href=\"/topic/empiricism\"\u003eempirical\u003c/a\u003e approach to \u003ca href=\"/topic/philanthropy\"\u003ephilanthropy\u003c/a\u003e justifies the accumulation of enormous sums of wealth, so long as that wealth is then given to good causes that could improve or save others’ lives. When Bankman-Fried had lunch with one of the movement’s foundational thinkers—an \u003ca href=\"/topic/University-of-Oxford\"\u003eOxford\u003c/a\u003e doctoral student in his mid-20s—he was convinced to leverage his mathematical aptitude to meet philanthropic ends. Shortly after graduating, he joined Jane Street Capital, LLC, a quantitative trading firm, and traded \u003ca href=\"/money/stock-finance\"\u003eequities\u003c/a\u003e and \u003ca href=\"/money/exchange-traded-funds-etfs\"\u003eexchange-traded funds\u003c/a\u003e (ETFs).\u003c/p\u003e\u003c!--[P-2]--\u003e\u003cp\u003eIn 2017 Bankman-Fried left Jane Street and, while working briefly at the Centre for Effective Altruism, used \u003ca href=\"/money/what-is-arbitrage\"\u003earbitrage strategies\u003c/a\u003e he had learned as a trader to push the limits of his earnings. He began trading \u003ca href=\"/money/Bitcoin\"\u003eBitcoin\u003c/a\u003e, a cryptocurrency with high \u003ca href=\"/money/stock-market-volatility\"\u003evolatility\u003c/a\u003e—and therefore high potential payoff—partly due to the limited regulation of digital assets. Later that year he cofounded Alameda Research LLC, a quantitative trading firm with an \u003ca href=\"/topic/arbitrage-finance\"\u003earbitrage\u003c/a\u003e model focused on digital assets. Within months the company at times would make as much as a million dollars a day in profit.\u003c/p\u003e\u003c!--[P-3]--\u003e\u003cp\u003eIn 2019 he set up FTX Trading Ltd., a cryptocurrency \u003ca href=\"/money/derivatives\"\u003ederivatives\u003c/a\u003e platform, in an effort to attract continued \u003ca href=\"/money/investment\"\u003einvestment\u003c/a\u003e. The exchange offered discounts to customers who conducted trades using its \u003ca href=\"/money/what-are-altcoins-tokens#ref352190\"\u003enative token\u003c/a\u003e, called FTX Token (FTT). Alameda Research became one of the largest holders of FTT before the token was floated on the market, allowing the firm to function as the token’s market maker and maintain the stability of its price. Bankman-Fried believed the fusion of \u003ca href=\"/money/stock-broker-vs-stock-exchange\"\u003eexchange, broker, and market maker\u003c/a\u003e would enable maximum efficiency, a single aggregate risk view, and real-time \u003ca href=\"/money/how-buy-sell-order-works#ref355382\"\u003eclearing and settlement\u003c/a\u003e.\u003c/p\u003e\u003c!--[P-4]--\u003e\u003cp\u003eBy the turn of the decade, Bankman-Fried had established himself as a donor to be reckoned with. Already a billionaire in 2020, he began donating large sums to U.S. political campaigns, including millions of dollars to \u003ca href=\"/biography/Joe-Biden\"\u003eJoe Biden\u003c/a\u003e’s presidential campaign that year. In the 2022 \u003ca href=\"/topic/midterm-election\"\u003emidterm election\u003c/a\u003e cycle, Bankman-Fried was the second largest individual donor to \u003ca href=\"/topic/Democratic-Party\"\u003eDemocratic\u003c/a\u003e campaigns. He also gave to a large variety of causes, favoring projects with potential future payouts for humanity (such as \u003ca href=\"/science/pandemic\"\u003epandemic\u003c/a\u003e preparedness) over those that would alleviate immediate suffering (such as providing mosquito nets to prevent \u003ca href=\"/science/malaria\"\u003emalaria\u003c/a\u003e). While Bankman-Fried cultivated the public image of an everyman, wearing nondescript clothing and espousing his philanthropic values when marketing FTX, he lived a lavish lifestyle in the \u003ca href=\"/place/The-Bahamas\"\u003eBahamas\u003c/a\u003e that garnered less attention.\u003c/p\u003e\u003c!--[P-5]--\u003e\u003cp\u003eHe caught the ear of several members of the U.S. Congress, where he twice formally testified on the \u003ca href=\"/money/cryptocurrency-regulation\"\u003eregulation of digital currencies\u003c/a\u003e, \u003ca class=\"external\" target=\"_blank\" rel=\"noopener\" href=\"https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-bankman-frieds-20211208.pdf\"\u003efirst\u003c/a\u003e in December 2021 and \u003ca class=\"external\" target=\"_blank\" rel=\"noopener\" href=\"https://www.agriculture.senate.gov/imo/media/doc/Testimony_Bankman-Fried_0209202211.pdf\"\u003eagain\u003c/a\u003e in February 2022. In his testimonies he advised Congress to build a regulatory framework around existing policy, with the \u003ca href=\"/topic/Commodity-Futures-Trading-Commission\"\u003eCommodity Futures Trading Commission\u003c/a\u003e (CFTC) as the primary regulator, and in a flexible manner that could respond to the evolving nature of the digital assets market.\u003c/p\u003e\u003c!--[P-6]--\u003e\u003cspan id=\"ref353835\" data-level=\"1\" /\u003e\u003ch2 class=\"h2\"\u003eFTX’s scandal and SBF’s arrest\u003c/h2\u003e\u003cp\u003eMeanwhile, as the cryptocurrency market crashed in mid-2022, FTX stood out in the industry as resilient. Not only did it remain profitable, but Bankman-Fried bailed out several firms in the industry that had failed to navigate the crash. Alameda Research, on the other hand, was in trouble. Lenders, shaken by what had happened to less successful firms, recalled funds that Alameda Research had used in \u003ca href=\"/money/venture-capitalist-angel-investing\"\u003eventure investments\u003c/a\u003e. When Alameda Research sought help from FTX to meet its lenders’ demands, FTX silently dipped deep into its customer deposits in order to loan Alameda Research the money that it needed.\u003c/p\u003e\u003c!--[P-7]--\u003e\u003cp\u003eMonths later the relationship between Alameda Research and FTX was brought under scrutiny. On November 2, 2022, a website specializing in news coverage of the digital assets market reported details from a leaked Alameda Research \u003ca href=\"/money/balance-sheet\"\u003ebalance sheet\u003c/a\u003e. Those details indicated that the firm was propped up by its FTT holdings, indicating a much weaker foundation for FTT than previously known and shaking \u003ca href=\"/money/consumer-confidence\"\u003econsumer confidence\u003c/a\u003e in the token. Days later the value of FTT began collapsing after the CEO of Binance, a competing exchange, announced that it would sell off its holdings of the token. The announcement initiated a run on the asset, but FTX did not have the funds to pay off everyone who wanted to cash in their tokens. On November 11 it was reported that at least $1 billion in customer funds had gone missing.\u003c/p\u003e\u003c!--[P-8]--\u003e\u003cp\u003eThe sudden collapse of FTX, despite its reputation as a stable and reliable exchange, highlighted the lack of transparency and accountability in the digital assets market. Not only was the handling of FTX’s finances opaque, but it was also remarkably lax. In December during a congressional hearing about the collapse, it was revealed that employees had handled invoices via \u003ca href=\"/topic/instant-messaging\"\u003einstant messaging\u003c/a\u003e and that bookkeeping had been conducted using basic accounting software designed for small-business use.\u003c/p\u003e\u003c!--[P-9]--\u003e\u003cp\u003eIn the aftermath of the collapse, Bankman-Fried made a bizarre media blitz, offering the public a \u003cem\u003emea culpa\u003c/em\u003e, apparently without grasping the gravity of his wrongdoing. He confessed that he had gotten “a little cocky” and “wasn’t spending any time or effort trying to manage risk on FTX” but insisted that he “didn’t knowingly commingle funds” and “didn’t ever try to commit fraud.” He acknowledged “messy accounting” and “huge management failures,” but his explanation did little to assuage the losses suffered by a massive number of customers. For all his intent on being an effective altruist, it was as if he were unaware of the age-old \u003ca href=\"/art/aphorism\"\u003eaphorism\u003c/a\u003e “The road to hell is paved with good intentions.” On December 12, 2022, he was taken into custody at his home in the Bahamas; the following day, he was indicted on eight criminal charges by the \u003ca href=\"/topic/US-Department-of-Justice\"\u003eU.S. Department of Justice\u003c/a\u003e and two separate civil charges by the CFTC and the \u003ca href=\"/money/Securities-and-Exchange-Commission\"\u003eSecurities and Exchange Commission\u003c/a\u003e (SEC).\u003c/p\u003e\u003c!--[P-10]--\u003e\u003cp\u003eBankman-Fried went on trial in October 2023, charged with seven counts of fraud, conspiracy, and money laundering. The following month he was convicted on all charges. In March 2024 he was sentenced to 25 years in prison and ordered to surrender more than $11 billion in assets.\u003c/p\u003e\u003c!--[P-11]--\u003e"])</script><script>self.__next_f.push([1,"7:[\"$\",\"$L19\",null,{\"initialArticle\":{\"contentInfo\":{\"contentId\":\"1-2217244-1\",\"browserTitle\":\"Sam Bankman-Fried | FTX, Education, Conviction, \u0026 Prison\",\"metaDescription\":\"Sam Bankman-Fried is the founder and former CEO (2019–22) of FTX Trading, Ltd., a cryptocurrency exchange. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the market of digital assets. In November 2022 the exchange collapsed, and Bankman-Fried was convicted of fraud and conspiracy the following year.\",\"description\":\"Sam Bankman-Fried was the founder and former chief executive officer (2019–22) of FTX Trading Ltd., a cryptocurrency exchange. The exchange became the second largest of its kind, making Bankman-Fried a powerful figure within the market of digital assets and in discussions in the United States\",\"lastUpdated\":{\"ms\":1732104000000,\"utcms\":1732104000000,\"formattedShortDate\":\"Nov. 20, 2024\",\"formattedLongDate\":\"November 20, 2024\",\"formattedDateTime\":\"Nov. 20, 2024, 7:00 AM ET\",\"formattedUTCDateTime\":\"Nov. 20, 2024, 12:00 PM UTC\"},\"url\":\"/money/Sam-Bankman-Fried\",\"alternateTitles\":\"SBF\",\"image\":{\"type\":\"IMAGE\",\"description\":\"PHOTO\",\"id\":274116,\"title\":\"Sam Bankman-Fried\",\"caption\":\"Sam Bankman-Fried in Nassau, Bahamas, April 26, 2022.\",\"credit\":\"Erika P. 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