[6] The friendly "math nerd" persona of Bankman-Fried masked significant problems at FTX, and in November 2022, as evidence of potential fraud began to surface, depositors quickly withdrew their assets, forcing the company into bankruptcy.

1995), previously worked as a legislative assistant, Wall Street trader, and director of the nonprofit Guarding Against Pandemics and its associated political action committee, which came under scrutiny by federal investigators after it was discovered that much of the US$35 million on its books had been stolen by his older brother from Alameda Research customer accounts.

[23] In September 2017, Bankman-Fried left Jane Street and moved to Berkeley, California, where he worked briefly at the Centre for Effective Altruism (CEA) as director of development from October to November 2017.

[23][28] In November 2017, following fund injections from billionaire computer programmer Jaan Tallinn and investor Luke Ding,[29] Bankman-Fried and CEA's Tara Hedley (née Mac Aulay[30]) cofounded the quantitative trading firm Alameda Research.

[23] In January 2018, Bankman-Fried organized an arbitrage trade, moving up to $25 million per day to take advantage of the higher price of bitcoin in Japan compared to the United States.

[40][41] In a November 2022 affidavit before the Eastern Caribbean Supreme Court,[42] and prior to his arrest, Bankman-Fried said he and FTX cofounder Gary Wang together borrowed over $546 million from Alameda Research in order to finance Emergent Fidelity Technologies' purchase of Robinhood Markets stock.

[55] He claimed to make donations "not based on personal interest but on the projects that are proven by data to be the most effective at helping people",[56] such as those that reduced existential risks like nuclear war, pandemics, artificial intelligence, and threats to American democracy.

[62][a] The stated reason for FTX's relocation to the Bahamas was the friendly regulatory environment,[64] and Bankman-Fried openly discussed paying off the country's $9 billion national debt.

[86] Anonymous sources cited by Reuters stated that, earlier in 2022, Bankman-Fried had transferred at least $4 billion from FTX to Alameda Research without any disclosure to the companies' insiders or the public.

[97] The arrest took place the day before Bankman-Fried was scheduled to appear before the U.S. House Committee on Financial Services,[9] but Forbes obtained and published his prepared testimony.

[9][97][98] Braden Perry, a former senior trial lawyer at the Commodity Futures Trading Commission, opined that a conviction on any of the charges might result in a prison sentence of years or even decades.

[99][100] After being held at Fox Hill Prison in Nassau for ten days, Bankman-Fried consented to his extradition from the Bahamas to the United States to face charges.

"[108] A March 2023 indictment accused Bankman-Fried and others that they had "directed and caused the transfer" of at least $40 million in cryptocurrency to Chinese government officials, in order to unfreeze accounts of Alameda Research.

Bankman-Fried was accused of having "stole[n] billions from thousands of people" by funnelling customers' money from FTX into Alameda to fund investments, loan repayments, real estate, and political donations.

A series of mistakes from him and his inexperienced executive team, a devastating market crash, and adversarial action from external parties caused his companies to spiral into bankruptcy.

[114][115][116][117] Over a dozen witnesses testified for the prosecution, including three FTX executives – Caroline Ellison, Gary Wang, and Nishad Singh as part of plea deals.

For his plea bargain, Wang testified that "with some simple tweaks to computer code," he helped Alameda Research misappropriate as much as $65 billion from FTX customers and that he "lied about this to the public.

He also claimed to have only skimmed the "dishonest" balance sheets that Alameda's CEO sent to lenders and the defense made a great effort to demonstrate her autonomy in the role, the prime example being her refusal to follow Bankman-Fried's advice to hedge against a market downturn.

On July 26, 2023, prosecutors alleged witness tampering after Bankman-Fried gave a reporter personal writings of former Alameda Research CEO Caroline Ellison.

[145] Journalist Matthew Kassel says that Bankman-Fried had often donated to politicians who cultivate good Israel–United States relations but concluded "it is unclear if his backing of pro-Israel candidates was coincidental or motivated by any personal interest in Middle East policy.

[21][158][159] Bankman-Fried said in February 2022 that his political contributions were not aimed at influencing his policy goals for the cryptocurrency ecosystem; however, FTX was circulating a list of suggestions to policymakers at the time.

[160] Bankman-Fried pushed for regulations via the proposed Digital Commodities Consumer Protection Act (DCCPA) by extensively lobbying Congress, which was perceived as being favorable to FTX but harmful to the broader industry, especially its decentralized finance competitors.

[167] A spokesperson for former Texas gubernatorial candidate Beto O'Rourke said that his campaign had received a $1 million donation from Bankman-Fried in October 2022 but returned the funds in early November, prior to the election.

[170][171] On July 20, 2023, an Insiders Avoidance Complaint was filed against Bankman-Fried and three former FTX/Alameda senior executives seeking to recover "hundreds of millions of dollars that Defendants misappropriated."

"[172] In December 2022, FTX's new management commenced efforts to "claw back" donations that had been made to politicians, celebrities, and charities as part of its bankruptcy proceedings.

While an anonymous bidder reportedly valued the remaining portfolio at "at least $2 billion",[57] Bloomberg's Matt Levine noted that "'We lucked into enough money to pay everyone back' is not a legal defense to fraud".

[176] In October 2023, FTX and its affiliated debtors revealed a proposed settlement of customer-property disputes, set to be presented for approval to the competent bankruptcy court.

She stated that Bankman-Fried believed he had received higher bonuses while working at Jane Street because of his hair and used his appearance as "an important part" of FTX's "narrative and image.

In an e-mail to The New Yorker, his mother, Barbara Fried, denounced the actions of the prosecution and the bankruptcy team as "McCarthyite" and a "relentless pursuit of total destruction," which is enabled by "a credulous public."

[187] She wrote a letter to the judge in February 2024 arguing for lenient sentencing, saying that Bankman-Fried would face extreme danger in prison because he has "trouble responding appropriately to many social cues".