The story of FTX founder Sam Bankman-Fried

Brut America

"I f—ked up, and should have done better."  He was crypto's billionaire golden boy ... and then lost everything overnight. This is the story of FTX founder Sam Bankman-Fried.

Transcript

00:00The guy you see next to me is the most generous billionaire in the world.

00:04Hi, my name is Sam and this is my story.

00:07Here's how the crypto world's golden boy became a billionaire before turning 30

00:11and then lost everything overnight.

00:14The scale of impact you can have on the world is just really, really large.

00:19Now, FTX founder Sam Bankman-Fried faces federal charges

00:23including wire fraud, securities fraud and money laundering.

00:30We were founded in 2019 and today we have roughly $15 billion a volume

00:35that trade daily on the platform.

00:38In 2019, MIT grad Sam Bankman-Fried, also known as SBF,

00:43founded FTX, one of the world's fastest growing cryptocurrency exchanges.

00:47It allowed users to buy, sell and trade digital currencies like Bitcoin and Dogecoin

00:52without the hassles of traditional financial institutions.

00:55We just started getting people signing up for the platform that we had never met before.

00:59That was when I started to feel like this might actually be real.

01:04Before long, the FTX name was everywhere,

01:07from a sports arena in Miami to Super Bowl commercials

01:10with high profile personalities like Steph Curry, Tom Brady, Gisele Bundchen and Shaquille O'Neal

01:16helping to bring the platform to a wider audience.

01:18Yeah, yeah, trade. We're telling everyone.

01:21Not a trade trade, I'm trading crypto.

01:23FTX is the safest and easiest way to buy and sell crypto.

01:25Bankman-Fried was a self-described adherent of effective altruism,

01:29a movement based on earning to give popular among tech founders.

01:34I wanted to get rich not because I like money,

01:36but because I wanted to give that money to charity.

01:39His giving wasn't limited to charitable causes.

01:42Bankman-Fried also became a major political donor,

01:44spending $40 million during the 2022 midterm cycle,

01:48primarily to Democratic candidates and political action committees.

01:51You have talked that a billion dollars is perhaps your ceiling for 2024.

01:55Does it depend on if it's Biden and Trump?

01:56That's one thing it's going to depend on.

01:58And it's not just the presidency as well.

02:00It's more generally like I want to support great public service.

02:03Despite a slump in the broader crypto marketplace throughout 2022,

02:07FTX seemed to be roaring along full speed ahead,

02:10even buying up competitors that were in trouble.

02:13At one point, Bankman-Fried's personal fortune was valued at $26.5 billion.

02:19I don't think I give a shit about my legacy.

02:22That's not what matters.

02:23In the end, it's the mark that we actually leave on the world,

02:27not the mark we're perceived to leave on the world that matters.

02:31But that all changed in November 2022,

02:34when CoinDesk, a crypto-focused digital media,

02:37published a financial balance sheet of a crypto hedge fund

02:40also owned by Bankman-Fried, Alameda Research.

02:43According to the explosive report,

02:45much of Alameda's assets were made up of FTT tokens,

02:48the digital currency created by FTX.

02:50This raised questions about whether customer money

02:53held in FTX was safe from any potential crises within Alameda.

02:57In light of the revelations,

02:59the founder of rival crypto exchange Binance

03:01and major investor in FTX, Changpeng Cixi Xiao,

03:06announced plans to sell all of Binance's FTT tokens.

03:10It caused panic investors to withdraw their funds from FTX.

03:13I'm just shocked.

03:14I'm shocked that, you know, he lied to everybody.

03:17So we shouldn't blame this problem on any single person

03:20other than Sam.

03:21The only problem?

03:22FTX didn't have enough money to cover customer withdrawals

03:26to the tune of $8 billion.

03:28I understand the risks when I put money in crypto.

03:30What I am pissed off is about this con man

03:33going around and spending our funds.

03:35Within a week, FTX and Alameda Research filed bankruptcy

03:39and Bankman-Fried stepped down as CEO.

03:42He apologized by tweet before going on a media tour

03:45to explain himself.

03:47If I had been spending an hour a day

03:49thinking about risk management on FTX,

03:51I don't think that would have happened.

03:52I think I got a little cocky.

03:55On December 12, 2022, Bankman-Fried's luck ran out

03:59when he was arrested in the Bahamas

04:01after being charged in U.S. federal court with eight counts,

04:05including wire fraud, securities fraud and money laundering.

04:08He was extradited to the U.S.

04:10and posted a $250 million bond

04:13before pleading not guilty to all charges.

04:16Can you speak into the microphones, please?

04:18Can you let us know about your plea?

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