Already a well-known name in cryptocurrency, Sam Bankman-Fried made global headlines in November 2022 when his crypto exchange spectacularly imploded. 

FTX, the second largest crypto trading platform, and Alameda Research, a DeFi investment business also started by Sam Bankman-Friedman, declared bankruptcy amid reports about the way customer’s funds were being handled. 

Last month, the criminal trial of Bankman-Fried, for charges related to the exchange collapse, began in New York, bringing SBF right back into the spotlight. 

Now seems like a good time to remember the background of the one-time crypto wunderkind. 

## Sam Bankman Fried origin story 

Born in March 1992, SBF was seen as a digital asset prodigy, launching Alameda Research in 2017, aged just 25, and the FTX exchange two years later. 

He was born at Stamford University, where his parents, Joseph Bankman and Barbara Fried, were professors. His own education took place at California’s Crystal Springs Uplands School and Massachusetts Institute of Technology, which he graduated from with a degree in physics and a minor in maths in 2014. 

Before graduating, Sam Bankman Fried spent a summer interning at Jane Street Capital, where he traded ETFs. After leaving MIT, he returned to the firm, but three years later, in September 2017, SBF was on the move again, this time to the Centre for Effective Altruism (CEA) in California. 

In the same year, he and Tara MacAulay, also of CEA, launched Alameda Research, a quantitative trading firm. It made quite a stir with its arbitrage trading, which took advantage of the higher value of BTC in Japan than in the US, reportedly completing trades worth up to $25 million every day. 

On the back of his success, Sam Bankman Fried moved to Hong Kong in 2018. 

In mid-2019, the FTX exchange was opened, and it rapidly grew to become second only to [Binance](https://www.binance.com/en) as a crypto trading platform. 

## It all goes wrong 

In November 2022, Alameda Research and FTX filed for Chapter 11 bankruptcy. 

This came at a time when Sam Bankman Fried was still revered by many in DeFi, and he was, reportedly, the 60th richest person in the world, with a peak personal fortune of $26 billion. 

Based in the Bahamas, SBF was seen to use his wealth to support political campaigns in the US. 

After the [collapse of FTX](/news/article/ftx-bankrupt-who-to-blame), amid allegations of poor governance and mishandling of customer funds, Sam Bankman Fried was arrested in the Bahamas and [extradited to the US](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges). 

In December 2022, eight criminal [charges were filed at the Southern District of New York Court](https://www.justice.gov/usao-sdny/pr/united-states-attorney-announces-charges-against-ftx-founder-samuel-bankman-fried), including allegations of wire fraud, securities fraud, money laundering, commodities fraud, and campaign finance law violations. 

Four further charges follow in early 2023. 

SBF was bailed to his parent’s home, but later remanded in custody due to allegations of attempts to tamper with witnesses. 

His trial finally got underway last month. 

## Views on regulation 

The collapse of FTX, one of the biggest names in crypto, raised serious questions around the need for regulating the industry, and led many jurisdictions to ramp up regulatory efforts. 

During the investigation, allegations around the management of both FTX and Alameda were made, including concerns about a lack of corporate governance, understanding of finances, and observation of the rules. 

SBF had spoken publicly about his views on crypto regulation, openly stating he has chosen to relocate FTX to the Bahamas due to what he termed a ‘friendly’ regulatory environment. 

During a conversation on Twitter (now X) in the same month FTX crashed, SBF described the appearance that his firms welcomed regulation and promoted the need for regulators in crypto as ‘just PR’ and not sincere. 

He claimed rules ‘don’t protect customers’ and make ‘everything worse’. He later attempted to clarify these statements, claiming he was referring to greenwashing, ESG (environment, social, and governance), and CSR (corporate social responsibility) being used instead of effective altruism. 

## “Complete failure of corporate controls” 

Among the most damning statements and allegations made in the wake of the collapse of Alameda Research and FTX were those from John J. Ray III. 

Ray, the man who oversaw the five-year bid to recover money for Enron creditors, took over as FTX CEO following the resignation of Sam Bankman Fried on 11 November, 2022. The firm filed for bankruptcy the same day. 

Later in the month, Ray, in a sworn declaration to the bankruptcy court, gave his assessment of Alameda and FTX. He said that 'never in my career' had he witnessed 'such a complete failure of corporate controls' or a 'complete absence of trustworthy financial information’. 

SBF had been due to testify to the House Financial Services Committee in December 2022. He was expected to claim FTX remained solvent, but he’d been ‘pressured' into declaring bankruptcy. He was also due to allege that those who had taken over running the firm were following the Enron precedent to earn high fees. 

Following his arrest, SBF did not appear before Congress. 

The Story of Sam Bankman-Fried 

## Alameda Research Explained 

During the trial of FTX founder Sam Bankman-Fried, the role of company Alameda Research in the dramatic collapse of the cryptocurrency exchange was regularly referred to. In the wake of the FTX debacle, many reports pointed to the contribution of Alameda to the platform's spectacular fall from grace. But what is Alameda Research? 

## Alameda Research trading firm 

Alameda Research was a DeFi (decentralised finance) investment firm established by SBF in October 2017. Headquartered in Hong Kong, the private equity firm, described by some as a quantitative cryptocurrency trading firm, made hundreds of investments. 

Described as a crypto hedge fund, Alameda made profits in crypto arbitrage by trading Bitcoin between Japan and the US. In 2019, it is reported, some of this income was used to get the FTX crypto exchange off the ground. 

As the digital asset industry suffered the crypto winter of 2022, Alameda was still investing heavily in DeFi projects, reportedly extending credit in excess of $800 million to firms like Voyager and [BlockFi](https://app.blockfi.com/signin?iss=https%3A%2F%2Fauth.blockfi.com%2F). 

Alameda collapsed after a balance sheet was leaked that claimed the business relied heavily on FTT, the token issued by FTX. 

The fall of Almeda sparked the [bankruptcy of BlockFi](/news/article/blockfi-bankrupt-court-documents), the crypto lender, amid claims it was owed $671 million by Alameda Research. BlockFi was also exposed to more than $350 million in funds frozen on the FTX exchange. 

While FTX and Alameda appeared to be distinct entities, it was reported in December 2022 that Alameda had handed over some $1 billion to assist the exchange after a company incident on the trading platform. 

## Trading activity 

Alameda was engaged in OTC (over-the-counter) cryptocurrency trading and also offered ‘full-service’ crypto trading on every exchange and market. 

It was reported that in 2022, head of its collapse, Alameda was managing more than $1 billion in digital assets and trading up to $10 billion every day in coins, tokens, and derivatives. 

It was believed to be holding some 40 cryptocurrencies, including major names like Solana, Bitcoin, Ethereum, Meta, DODO, and Swipe. But it was its exposure to FTT, the token of FTX, that proved critical. 

## End of an empire 

Media investigations into the relationship between the two companies, by [CoinDesk](https://www.coindesk.com/), among others, revealed that 40% of Alameda’s assets were FTT. 

These reports of Alameda’s reliance on FTT spooked investors, who fled the FTX exchange and dumped FTT. Unable to keep up with withdrawal requests, [FTX went into freefall](/news/article/ftx-bankrupt-who-to-blame). 

There had been hopes that Binance, the largest crypto exchange, would step in to provide liquidity for its nearest competitor and complete a buyout. But Binance stepped away from the idea. 

The business tweeted in November 2022 that it was abandoning the takeover plans following corporate due diligence and reports of customer funds being ‘mishandled’. 

With customers flooding out and the potential buyout off, both FTX and Alameda filed for Chapter 11 bankruptcy and SBF stepped down. Initial court reports put the liabilities of Alameda and FTX at between $10 and $50 billion. 

## Fall from grace 

Alameda Research had become established as a significant DeFi investor. In just five years, it made more than 220 investments, according to reports. 

Many of these took the form of capital injections into DeFi solution firms. For example, Fordefi, the FinTech and software company, announced in November 2022 that Alameda was among the investors to contribute to the $18 million it had raised to create an institutional DeFi wallet. 

With Alameda being so deep in the DeFi industry, its collapse caused problems for many projects. 

Maps.me and Oxygen, both recipients of tens of millions of dollars from the firm, ended up with almost all of their token supply frozen on the collapsed FTX exchange. 

FTX didn’t hold equity in either firm, but did hold a substantial amount of MAPS and Oxy tokens and was custodian for more than 95% of the total supply. 

## Day in court 

During SBF’s criminal trial, resulting from the collapse of FTX, it was repeatedly alleged that FTX customer funds were used by Alameda. 

Accounting expert Professor Peter Eaton, giving evidence on the apparent disappearance of $9 billion of customer funds, was clear in his assessment. Eaton conducted a painstaking analysis of the FTX and Alameda books and found substantial deficits. 

Alameda was supposed to be holding around $11.3 billion in FTX customer funds, but little more than $2 billion of that was being held in company bank accounts. Eaton testified that almost 70% of the loans Alameda was making were funded with FTX customer funds. 

Alameda research logo on image of research laptop

Alameda Research: Explained

The Bahamas, a tropical paradise known for its stunning beaches, became the backdrop of a gripping financial saga in which Sam Bankman-Fried (SBF) and [FTX](https://ftx.com/), the cryptocurrency [exchange](/news/article/coinswitch-exchange) he founded, were involved. 

From luxury property acquisitions to a dramatic collapse, culminating in his arrest, the story of SBF Bahamas unveils a tumultuous journey in the world of cryptocurrency. 

This article explores the SBF Bahamas adventure, including the property purchases, [the collapse](/news/article/ftx-exchange-under-investigation) of the exchange, and the subsequent arrest of its founder on criminal charges. 

## Who is SBF? 

Bankman-Fried was born in 1992 and grew up in California. He studied physics and mathematics at MIT (the Massachusetts Institute of Technology). After graduating, he held a position as a trader at Jane Street Capital, a company specializing in quantitative trading. 

Bankman-Fried established [FTX](/news/article/ftx-exchange-under-investigation) in 2017, and it quickly became one of the largest exchanges in the world. FTX offered a variety of features that appealed to traders, including high liquidity, low fees, and margin trading. 

Bankman-Fried's success with FTX made him a wealthy man. He was ranked as the youngest self-made billionaire in the world by Forbes magazine in 2021. He gained prominence as a major donor to the US Democratic Party and was renowned for his dedication to effective altruism, a philanthropic movement that advocates for the rational and efficient distribution of wealth to charitable causes. 

However, SBF's success came with a price. He was accused of using his position at FTX to manipulate the cryptocurrency market. He was also accused of using customer funds to prop up [Alameda Research](/news/article/ryan-salame-exposed-ftx-truth), a cryptocurrency trading firm he founded. 

## FTX's Bahamas property purchases 

Under the leadership of Sam Bankman-Fried, FTX embarked on a lavish real estate buying spree in the Bahamas. Property records revealed that the company, together with its senior executives and even SBF's parents, acquired numerous high-value properties totaling nearly $121 million. These acquisitions primarily consisted of luxurious beachfront homes and vacation properties, including seven opulent condominiums in the upscale resort community of Albany. 

The SBF Bahamas property purchases came to light amidst a series of troubling events. FTX, previously counted among the largest cryptocurrency exchanges globally, faced mounting financial woes, leading to a rush of customer withdrawals and subsequent bankruptcy filings. 

The collapse[ left countless creditors with significant losses](/news/article/ftx-creditors-include-google-apple-netflix), and the finger of blame pointed at SBF's alleged misuse of customer funds to prop up his trading business, Alameda Research. 

## SBF Bahamas arrest 

The founder of FTX was[ arrested in the Bahamas](/news/article/former-ftx-ceo-sbf-arrested) in December 2022 following a formal notification from the US. The allegations originated from the US Securities and Exchange Commission (SEC) investigation into FTX's trading activities. 

He was detained at his apartment complex in the Albany resort, where luxurious properties were at the center of FTX's Bahamas buying spree. 

Bankman-Fried was [brought to the US](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges) through extradition. Afterward, the US District Court in Manhattan indicted him on eight counts, including money laundering and securities fraud. 

The SBF Bahamas adventure began when he moved there in 2021 after relocating the headquarters of FTX from Hong Kong. The Bahamas has a reputation as a crypto-friendly jurisdiction, and FTX was one of the first major cryptocurrency exchanges to establish a presence there. 

The arrest marked one of the most stunning falls from grace in recent corporate history as SBF's empire crumbled. The arrest shocked many, as Bankman-Fried was seen as one of the most successful and influential figures in the cryptocurrency industry. 

## What led to FTX's failure? 

On 11 November, 2022, FTX initiated [Chapter 11 bankruptcy proceedings](/news/article/ftx-bankrupt-who-to-blame) triggered by a significant increase in customer withdrawals at the beginning of that month. The then-CEO, Sam Bankman-Fried, openly acknowledged that the company lacked adequate reserve assets to fulfill the overwhelming customer demand. 

## What lies ahead for Bankman-Fried? 

SBF's future entails a trial scheduled for 2 October, 2023. After a court hearing on 22 December, 2022, a federal judge ruled in favor of his release from custody upon agreeing to a record-breaking $250 million bond. 

He will reside in Palo Alto, California, with his parents, adhering to restrictions within the Northern California area and wearing an electronic monitoring bracelet. Bankman-Fried appeared in a federal court in New York in January 2023 and entered a plea of not guilty to all allegations. 

## Conclusion 

The rise and [fall of SBF](/news/article/ftx-boss-denied-bail-in-bahamas) tell a cautionary tale of unchecked ambition and financial turmoil in the world of cryptocurrency. This saga underscores the importance of robust regulations and responsible management in safeguarding investors and upholding the credibility of the crypto industry. 

Sam Bankman Fried (SBF) Standing in the bahamas

The SBF Bahamas adventure: The rise and fall of a crypto mogul 

Benjamin Roth, the Chief Investment Officer of [Auros](https://www.auros.global/), has revealed that the company has effectively resolved its liquidity problems arising from the bankruptcy of the crypto exchange FTX.

Following a significant debt restructuring, Auros was recently released from court-supervised provisional liquidation and obtained a fresh investment of $17 million.

Vivienne Court Trading, a traditional high-frequency trading firm, and Bit Digital (BTBT), a public bitcoin mining company, led this investment. Meanwhile, the [crypto trading](/news/article/how-does-crypto-trading-work) firm had to engage in months of behind-the-scenes efforts to keep its business afloat following the collapse of FTX, which caused significant losses for several trading firms in the crypto industry.

## Auros response to the liquidity crisis caused by FTX bankruptcy

The failure of [Sam Bankman-Fried's](/news/article/sam-bankman-fried-bail-co-signers-revealed) exchange to repay its customers caused concerns about a broader insolvency crisis in the cryptocurrency market.

As a result, lenders began recalling their outstanding loans to minimise possible losses. Auros, whose funds were mainly tied up in FTX, suddenly faced a liquidity crisis and could not repay its creditors. Rather than attempting to repay lenders, it filed for provisional liquidation with the British Virgin Islands (BVI) court to engage with its creditors.

With the BVI's assistance, the firm could restructure its outstanding debts, including converting open-term loans into termed loans with a maturity date. Auros also addressed its $18 million in [DeFi](/news/article/what-is-a-defi-token) loans by repaying 55% of its debt on the blockchain-based credit platform Maple and spreading the remainder across three-month and nine-month loans.

## Auros raises strategic funds to continue its operations

According to Roth, the company had plans to raise capital even before [FTX's collapse](/news/article/ftx-bankrupt-who-to-blame). However, the court's supervision made it more challenging to raise funds. In a statement, Marcel Klooss, co-founder of Vivienne Court, stated that the two companies have complementary skills and distinct characteristics that will create continuous synergies. The crypto firm, expanding its derivatives solutions business to offer yield and protection services to clients, will have [BitDigital](https://bit-digital.com/) as its second-largest investor and strategic partner.

The funding round also includes participation from Trovio, Primal Capital, Epoch Capital, and a group of senior and former traders from proprietary trading and market-making firm Optiver.

Marcel Klooss and Hughes Ching, co-founders of Vivienne Court and Bit Digital, respectively, will become members of the board of directors.


blue image of circuitboard with auros logo overlayed

Auros Resolves Liquidity With $17M Funding 

[Becca Balint](https://vtdigger.org/2023/02/28/becca-balints-1-million-crypto-benefactor-pleads-guilty-to-campaign-finance-fraud/), a member of the US House of Representatives from the state of Vermont, has been thrown into the spotlight again after Nishad Singh, an ex-executive of insolvent cryptocurrency exchange FTX who contributed $1 million in advertising money to her congressional push, pleaded guilty to campaign finance fraud on 28 February.

Singh said he is sorry for his role in the bankrupt crypto firm. He reiterated that he only knew by mid-2022 that Alameda Research, the hedge fund run by founder [Sam Bankman-Fried](/news/article/sam-bankman-fried-bail-co-signers-revealed) (SBF), was borrowing customer funds at [FTX](/news/article/ftx-funds-political-donations-to-be-recovered) without informing depositors.

The association of the politician with FTX has added more fuel to the fire as allies of SBF, which included Singh, contributed a minimum of $26,000 directly to support her campaign. Aside from that, the Democratic Party in Vermont was also a beneficiary of FTX contributions. 

SBF's inner circle continues to crumble. Singh is the third member of the once-thriving crypto firm to collaborate with US prosecutors with the hope of working out a deal. 
  
The latest link to Bankman-Fried's ally comes a few days after a superseding [indictment](https://vtdigger.org/2023/02/23/becca-balint-cooperating-with-federal-prosecutors-as-new-allegations-against-sam-bankman-fried-emerge/) filed on 23 February laid out an alleged scheme by the founder and former CEO to illegally move investor money to political campaigns to help improve his standing with representatives in Washington, DC.

Prosecutors believe his consistent donations were a way of pushing decision-makers to consider his preferred regulatory agenda for the entire decentralized finance economy.  

## Becca Balint is cooperating with authorities 

According to her campaign manager, Natalie Silver, Vermont's leader in the House of Representatives is fully cooperating with federal authorities in the investigation into SBF's scheme to pour a minimum of $1 million into a super PAC (political action committee) to support a candidate who favoured LGBTQ issues.   

After serving as a member of the Vermont Senate, Balint made history by becoming the first person from the LGBTQ+ community to be elected to Congress.


red image of becca balint and sam bankman-fried in front of sign saying guilty

Becca Balint Contributor Admits Fraud 

The details of Sam Bankman-Frieds bail have been revealed before the court. Surprisingly, the former CEO of the fallen crypto exchange, FTX, had been bailed out by two high profiles in academia. The co-signers happen to be Larry Kramer and Andreas Paepcke.

Interestingly, both guarantors have an association with the Stanford Law School. Kramer served as the Dean of the law school, whereas Paepcke served as a research scientist. 

Curiously, Sam’s parents also work for the same school. 

## Stanford academics contributed $700,000 for SBF bail

The surety documents of SBF also revealed that the notorious crypto figure was bailed out at $700,000. Kramer contributed around $500,000, and Paepcke put up more than $200,000 for the bail. It helped in the release of SBF, and he is currently residing with his parents in California.

However, the trial for fraud in the [FTX exchange case](/news/article/ftx-exchange-under-investigation) is not over yet, and the case proceedings are still ongoing in the federal court of New York.

The founder of the fallen exchange was [released on a $250 million bond](https://www.ft.com/content/6993c3fa-6147-4cd3-9214-886d4da20d2f). According to the government prosecutors, it was the largest ever amount. Initially, the bond was covered through SBF’s parent’s home, Palo Alto. 

## Judge Kaplan ordered to reveal of bail documents 

Lewis Kaplan, the federal court judge, ordered to reveal the details of the surety documents. It included the revelation of the co-signers' names and the amount they contributed. The judge took action after the request from the Inner City Press back on 3 January.

Previously, the identities of the bail guarantors were concealed at the request of SBF’s lawyer. But now, the unsealing of documents has exposed the names of the co-signers. Larry Kramer and Andreas Paepcke are the figures from Stanford who put up significant amounts. 

SBF’s parents, Joseph Bankman and Barbara Fried, also work for Stanford Law School. It implies that their affiliation with other employees in the school has helped secure Sam Bankman-Fried’s bail, previously [denied by the Bahamas judge](/news/article/ftx-boss-denied-bail-in-bahamas) in December 2022.


image of sam bankman-fried, Andreas Paepcke and larry kramer stanford in front of image of millions of dollars falling

Sam Bankman-Fried’s Bail Co-signers Revealed 

The new management of FTX is taking steps to [recover political donations](https://decrypt.co/120637/ftx-demands-return-political-donations) made by its former executives, including Sam Bankman-Fried, as part of the ongoing bankruptcy proceedings and plans to recover funds to repay the crypto exchange's creditors. 

## FTX funds donations to political parties

Bankman-Fried had been open about his political donations even before the exchange [collapsed](/news/article/is-crypto-dead). He was the second-largest CEO contributor to Joe Biden's 2020 campaign with a donation of $5.2 million. He also admitted to being a significant donor to Democratic and Republican candidates during the November midterm elections. 

The FTX funds donations to political parties are under [investigation](/news/article/ftx-exchange-under-investigation) by US prosecutors, with court documents filed in January indicating a review of donations totalling $93 million between March 2020 and November 2022.

## FTX plans to take back its political donations

FTX is taking action to retrieve millions of dollars from political contributions. John John Jay Ray III, the newly appointed company's CEO, has issued a formal demand for the return of "contributions or other payments" by 28 February.

The new management has outlined a pathway for politicians and political groups to voluntarily return the funds, with unreturned donations then required to be repaid with interest. 

Additionally, the company emphasized that it will still seek to recover funds donated to third parties like charities. The company clarified that recipients of such contributions are not exempt from its demand for return.

According to recent data from Unusual Whales, 196 members of Congress received campaign contributions from FTX's former executives, including [Ryan Salame](/news/article/ryan-salame-exposed-ftx-truth), Sam Bankman-Fried, Nishad Singh, and others.

In addition to recovering political donations, FTX's new team is also taking steps to repay its creditors, including plans to sell $4.6 billion in non-strategic investments, such as subsidiaries LedgerX, FTX Japan, Embed, and FTX Europe. 

A task force has also been formed by the Southern District of New York US Attorney's Office to investigate the exchange's collapse, including recovering missing customer funds and handling prosecutions relating to the FTX crash.


red image of ftx logo and dollars falling

FTX Funds: Political Donations to be Recovered

The lawyers for the bankrupt crypto exchange FTX filed a creditor matrix in the [Bankruptcy Court](https://www.deb.uscourts.gov/) of the US in Delaware District on 25 January. It is a detailed document that reveals all FTX creditors, including giants like Netflix, Amazon, Apple, and Coinbase.

The court document suggests that the fall of the [FTX crypto exchange](https://ftx.com/) has affected firms from various domains. Besides crypto firms, the collapse has troubled several banks, hotels, airlines, media agencies, charity organisations, and others. In addition, a few government entities are among its creditors.

## Big names from the list of FTX creditors

The creditor matrix is a 115-page document that provides names and mailing addresses of creditors in alphabetical order.

It illustrates the extent of damage caused by the fall of FTX.

As per the document, the bankruptcy of crypto exchanges left a deep impact on the tech industry. The SBF firm is indebted to the tech giants like Apple, Amazon, Microsoft, Meta, Twitter, Google, Netflix, LinkedIn, and many others. 

In addition, media outlets, including big players like the New York Times, figure among its creditors.

In the Web3 sphere, the firm owes to companies like Coinbase, Yuga Labs, Galaxy Digital, Bittrex, Circle, Binance, and Chainalysis.

## FTX bankruptcy case

Not long ago, the FTX exchange was one of the largest in the industry. However, in November 2022, the firm experienced a liquidity crunch as its FTT token crashed.

This prompted the firm to file for insolvency, and its founder [SBF was arrested](/news/article/former-ftx-ceo-sbf-arrested) for financial laws violation. 

Earlier, the firm's lawyers mentioned that it owes money to more than a million creditors. The rough estimates suggest that the firm owes more than $100 million to each of its top ten creditors. However, the recent creditor matrix did not provide the estimated amounts of each creditor.


red image of blockchain with FTX, coinbase, apple and netflix logos shown

FTX Creditors Include Google, Apple, Netflix

On 17 January, cryptocurrency exchange [FTX](/news/article/curve-finance-leverage-ftx-crash) revealed in a report to creditors that a significant amount of funds, estimated at $415 million, were stolen in a series of hacks. 

The company stated that despite efforts to recover lost assets, significant shortfalls remain at the FTX US and international exchanges.

FTX told the bankruptcy judge in Delaware last week that it has managed to [recover more than $5B](/news/article/ftx-news-assets-recovered) in various assets, including crypto, cash, and liquid securities. However, the exchange attributes a portion of the remaining shortfall to the hacks, reporting that $323M in crypto was stolen from the international exchange and $90M from the US exchange since filing for bankruptcy on 11 November.

The company's founder Sam Bankman-Fried has since challenged aspects of the report in a [blog post](https://sambf.substack.com/p/ftx-us-balance-update-2023-01-17) that provides information on the assets that FTX US holds. He has been [accused](/news/article/ryan-salame-exposed-ftx-truth) of using customer funds to cover the debts incurred of his crypto-focused hedge fund, Alameda Research.

Bankman-Fried contested FTX's recent financial report. He claimed that an "extremely misleading" impression of the company's finances had been presented by FTX lawyers at Sullivan & Cromwell. An S&C spokesperson declined to comment on the statement. According to SBF's "best guess," the company still has enough funds to repay US customers, whom he estimates are owed between $181M and $497M.

Attorneys at the firm stated in a recent court filing that they had rejected efforts by SBF to remain involved in the company's bankruptcy proceedings. Also, he has been denied access to the company’s records since stepping down as CEO in November.

## FTX's recovery report

The company neither provided an estimate of the amount owed to FTX US or international customers nor responded to SBF's blog post.

In a recent FTX update on its recovery efforts following the $415M hack, the company reported that it had recovered $1.7B in cash, $3.5B in liquid cryptocurrency, and $300M in liquid securities.

The crypto assets recovered to date include $685 million in Solana, $529 million in FTX's proprietary FTT token, and $268 million in Bitcoin, based on the crypto prices on 11 November, 2022.


Red image of hacker hacking. Dollars falling from sky and Sam Bankman-Fried smiling in foreground

FTX US Reports $415 million Hacked

The [latest FTX news](/news/tag/ftx) could be positive for customers, investors, and lenders – $5B of assets, such as liquid cryptocurrency, liquid investment securities, and cash, have been recovered, according to Andy Dietderich, an FTX attorney.

Dietderich revealed this information to Judge John Dorsey in a Delaware bankruptcy court. The recovered assets do not include those confiscated by the Securities Commission of the Bahamas – where the crypto exchange is headquartered and former FTX boss Sam Bankman-Fried (SBF) was located at the time of his arrest.

## FTX news: who has been named in court filings?

Celebrities such as American football legend Tom Brady, Brazilian fashion model Giselle Bündchen (Brady's former wife), and CEO of the Kraft Group, Robert Kraft, were among those named in the hearings.

Most of FTX's investors and customers facing unfortunate losses have not been mentioned in court filings. At the time of writing, an estimated $8B of customer funds is missing (factoring in the latest recovered funds).

## FTX news: a timeline of events

Here is a timeline of events involving the cryptocurrency exchange and SBF:

•	On 11 November, 2022, FTX, valued at $32B just a year ago, [filed for bankruptcy](/news/article/ftx-bankrupt-who-to-blame).

•	On 12 December, 2022, [SBF was arrested](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas and extradited to the US.

•	On 13 December, 2022, US federal prosecutors announced eight criminal charges against SBF, including campaign finance violations, money laundering, and wire fraud. This includes allegations of using customer funds to settle debts at his crypto trading firm, Alameda Research, and indulging in other investments.

•	Co-founder of FTX Gary Wang and former head of Alameda Research Caroline Ellison (SBF's rumoured ex-girlfriend) have also been charged [over their purported role](/news/article/sam-bankman-fried-crypto-execs-admit-fraud) in FTX’s calamitous downfall.

•	On 22 December, 2022, SBF was released on a $250M bail bond – one of the largest in US history.

•	SBF, who was [once worth $26B](https://news.yahoo.com/sbf-once-worth-26-billion-092740219.html), pleaded ‘not guilty’ to each criminal charge against him.

In an interview with BBC news before his arrest, Sam Bankman-Fried claimed he had "unknowingly" committed fraud. He did not want the events that unfolded to happen and admitted to being "not nearly as competent" as he thought.


ftx logo on red background with billions of dollars falling from the sky

FTX News: $5B of Assets Recovered

Two top officials of Sam Bankman-Fried's cryptocurrency empire have admitted to committing fraud. [The Southern District of New York US Attorney announced on Wednesday night](https://www.nytimes.com/2022/12/21/technology/ftx-fraud-guilty-pleas.html) that two former employees of Sam Bankman-Fried crypto businesses had pled guilty to federal criminal fraud charges and are collaborating in prosecuting the disgraced crypto entrepreneur.

Gary Wang, 29, founded the exchange FTX, and Caroline Ellison, 28, ran the cryptocurrency hedge fund Alameda Research. They played pivotal roles in the development of the global Sam Bankman-Fried crypto empire, which he launched with the creation of Alameda and FTX.

Following last week's fraud complaints against Mr. Bankman-Fried, two federal regulatory agencies, the Commodity Futures Trading Commission and the SEC (Securities and Exchange Commission), filed civil fraud charges against Mr. Wang and Ms. Ellison and Mr. Wang on Wednesday.

## Facing further legal trouble as former employees plead guilty to fraud

[Mr. Bankman-Fried is in detention](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas after agreeing to be extradited to face trial in the US. The 30-year-old is in an especially precarious legal position due to the criminal and civil allegations leveled against the former top executives.

The US Government has accused him of perpetrating a massive fraud lasting for years that led to FTX filing for bankruptcy last month.

Two of his closest advisors are now helping federal prosecutors with their investigation. The friendship between Mr. Bankman-Fried and Mr. Wang and Ms. Ellison extended beyond that of close colleagues. He lived with them in a lavish condominium on Paradise Island, the Bahamas, where FTX was headquartered.

Prosecutors and regulators have filed charges against Mr. Bankman-Fried, alleging that he misappropriated billions of dollars from his customers to fund his activities. These include purchasing real estate in the Bahamas, trading cryptocurrencies at Alameda, funding political campaigns, and investing in other cryptocurrency companies. They say he bilked crypto trading company clients, financiers, and lenders.


Sam Bankman-Fried's Crypto Execs Admit Fraud

Sam Bankman-Fried, the detained founder of the bankrupt crypto exchange FTX, reportedly signed documents on 20 December that will see SBF handed over to Federal Bureau of Investigation (FBI) agents and taken to the United States, where he will face criminal charges.

Bankman-Fried was [reported](https://cointelegraph.com/news/sbf-signs-extradition-papers-set-to-return-to-face-charges-in-the-us) to have agreed to be [extradited](/news/article/former-ftx-ceo-sbf-arrested) to the US just hours after his lawyer told a judge in the Bahamas that he was not ready to consent.

## SBF is to be taken to the US to face criminal charges

According to Bahamas Acting Commissioner of Corrections Doan Cleare, Bankman-Fried signed his surrender documents on Tuesday. Today, SBF will sign separate papers finalising his waiver of rights to fight extradition at the Magistrate's Court in Nassau.
[Bankman-Fried](/news/article/sam-bankman-fried-lost-billions) is expected to be accompanied by FBI agents on a private flight back to the US, where he faces eight counts in an accusation by the US Attorney for the Southern District of New York. 

According to the [New York Times](https://www.nytimes.com/2022/12/20/technology/sam-bankman-fried-bail.html), Bankman-Fried's legal team is negotiating with federal prosecutors to allow him to be released on bail if he is extradited to the US.

According to sources, the agreement, which requires the approval of the federal judge overseeing the SBF case, could include highly restrictive conditions such as home custody and electronic monitoring.

## Allegations on SBF 

The Department of Justice has accused SBF of campaign finance violations, commodities and securities fraud, conspiracy to commit wire and money laundering, and wire fraud.

If found guilty of all charges, he could face up to 115 years in prison.

[The Commodity Futures Trading Commission and SEC (Securities and Exchange Commission) have filed additional charges](/news/article/ftx-boss-denied-bail-in-bahamas) against the founder of FTX for allegedly breaking commodity laws and defrauding investors.

After three years of rapid growth, FTX and numerous related companies filed for bankruptcy last month. The exchange was worth US$32 billion at its peak.

Authorities in the Bahamas and the US continue to investigate the involvement of SBF in FTX's collapse last month. The exchange was headquartered in the Bahamas.



SBF Agrees to Return to US to Face Fraud Charges

According to recent reports, authorities were alerted of the FTX's fraud before it made headlines. [Co-CEO Ryan Salame alerted Bahamian authorities](https://cointelegraph.com/news/ftx-bahamas-co-ceo-ryan-salame-blew-the-whistle-on-ftx-and-sam-bankman-fried) a few days before FTX filed for [bankruptcy](/news/article/ftx-bankrupt-who-to-blame) in November.

He alleged that founder Sam Bankman-Fried might have defrauded investors by [transferring money](https://cointelegraph.com/news/alameda-had-unfair-trading-advantage-special-access-to-ftx-funds-cftc-filing) to his sister company, Alameda Research.

## Ryan Salame takes on FTX and Sam Bankman-Fried

Contrary to the vast majority of market rumours, one of the company's top executives, not Changpeng Zhao (CZ) of Binance, was the one who brought down SBF and FTX. The declaration made on Wednesday is the first time an insider's turn against Bankman-Fried has been acknowledged publicly.

According to Bahamian court documents filed on 14 December, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the SCB (Securities Commission of the Bahamas) on 9 November that the company was sending client funds to its sister trading company Alameda Research.

Salame claimed that the transfer was neither authorised nor approved by clients and that the money was intended to compensate for Alameda's financial losses. Furthermore, he disclosed to the SCB that only three people had the authority to transfer client assets to Alameda: the engineer Nishad Singh, the former CEO Sam Bankman-Fried, and Zixiao “Gary” Wang, the other co-founder of the company.

Salame claimed that he informed Bankman-Fried and Alameda executives that it was against "normal corporate governance" for client funds to have been mixed with Alameda's.

Following that, Christina Rolle, executive director of the SCB, requested an [investigation](/news/article/ftx-exchange-under-investigation) from the commissioner of the Royal Bahamas Police Force because the information “may have held misappropriation, theft, fraud, or some other crime".

The following day, 10 November, the [SCB froze FDM's assets](https://cointelegraph.com/news/bahamas-securities-regulator-freezes-ftx-assets) and suspended its registration in the country. A provisional liquidator was appointed by the Bahamian Supreme Court to try to save the company's assets.
According to the filings, Salame is believed to be in Washington, DC, and has not spoken publicly since the exchange's downfall.

His most recent public tweet was on 7 November, when he responded "lol" to Binance co-founder Yi He after He explained why the exchange [sold its FTX Token FTT holdings](/news/article/ftx-vs-binance-liquidate-funds).

## The collapse of FTX has had an absurd impact on the industry

Mixing SBF's companies' funds was a significant issue in the FTX scandal. In recent weeks, another former executive from FTX's affiliated companies is thought to have been assisting authorities.

On 4 December, images purportedly showing Alameda CEO Caroline Ellison in a coffee shop near the US Attorney's Office fueled rumours. Following the company crash, the cryptocurrency community believes she may have made a deal with authorities. 

Bankman-Fried is, to date, the only person charged in connection with FTX and Alameda so far. He is [accused](/news/article/ftx-boss-denied-bail-in-bahamas) of money laundering, political campaign finance violations, and wire and securities fraud.

Bankman-Fried, Wang, Singh, and Ellison are said to have run a "wirefraud" group chat on Signal, the encrypted messaging app, to send sensitive information about FTX and Alameda's operations. Bankman-Fried denied any knowledge of or participation in the group.


red image of ftx logo on mobile phone. Ryan Salame sitting in foreground. 

Co-CEO Ryan Salame Exposes FTX Truth

A [judge in the Bahamas has refused bail for Sam Bankman-Fried](https://www.bbc.com/news/technology-63967010.amp), the founder and former boss of the bankrupt crypto exchange FTX. According to the most recent sources, he will be detained by Bahamian authorities following his [arrest](/news/article/former-ftx-ceo-sbf-arrested) on 12 December, 2022.

Joyann Ferguson-Pratt, the judge in the case, has scheduled an extradition hearing for 8 February, 2023. The hearing was arranged in response to the decision to deny the former FTX boss bail.

## Ex-FTX boss in court

During the hearing, the attorney for the former FTX boss asked the judge whether SBF might be released on a $250,000 bond. The lawyer argued that his release is required since he requires daily medication.

Prosecutors in the Bahamas resisted the proposal, claiming it violated a treaty with the United States. The attorneys also stated that defendants should be imprisoned while extradition procedures were underway under the treaty provisions.

Bankman-Fried notified the judge that he would not forgo his right to contest the extradition. He then hinted that he could desire to stay in the Bahamas on purpose.

Bankman-Friend, wearing a blue suit without a tie, dropped his head and hugged his parents when the judge ruled that his danger of flight was "very severe". The judge ordered him to be detained in the Bahamas until 8 February.

## Allegations on FTX boss

After the Royal Bahamas Police was informed of a secret indictment by US prosecutors, they arrested SBF on Monday. The arrest was sparked by an unsealed indictment which included eight charges against SBF. These included conspiracy and wire fraud, for allegedly abusing billions of dollars in client payments before his cryptocurrency empire's stunning collapse last month.

Furthermore, the [SEC](/news/article/sec-crypto-enforcement-warning), CFTC, and the US Department of Justice filed complaints against Bankman-Fried on Tuesday for suspected securities and commodities fraud. Bahamas government officials are conducting civil and criminal investigations against him and FTX.

The day's events concluded a remarkable fall from grace for SBF, who created a fortune worth more than $20 billion as he rode a cryptocurrency boom to grow FTX into one of the world's largest exchanges.


red image of bankman fried in front of image of man in handcuffs. 

Former FTX Boss Denied Bail in the Bahamas

The founder and disgraced CEO of the failed crypto exchange FTX, Sam Bankman-Fried, was arrested on Monday after the US Government filed a criminal indictment.

These charges follow weeks of speculation that the FTX CEO misused customer funds.

## FTX CEO arrested

Sam Bankman-Fried, popularly known as SBF, was arrested by the Royal Bahamas Police Force. The police said that the arrest was initiated following receipt of formal notification from the US Government that it filed criminal charges and is likely to request that SBF be extradited.

In a statement, the Bahamas Police confirmed that Bankman-Fried was taken into custody without a hitch at his Albany apartment complex at 6pm.

SBF's arrest resulted from financial offences alleged in the US which would also be offenses in the Bahamas, the statement said.

A sealed indictment filed by the Southern District of New York was the basis for the arrest. US Attorney Damian Williams confirmed this in a [tweet](https://twitter.com/SDNYnews/status/1602451395910803457). 

Last month, the exchange filed for bankruptcy in the US after it imploded [almost overnight](/news/article/sam-bankman-fried-lost-billions), leaving customers unable to access their funds. According to court filings, FTX owed its largest creditors around $3.1 billion.

The dramatic fall from grace has been the talk of the market. The exchange's CEO was expected to testify about the [company's collapse](https://www.nytimes.com/2022/12/09/technology/ftx-text-messages.html) in Congress on Tuesday.

## Bankman-Fried future looks clouded

According to the [New York Times](https://www.nytimes.com/2022/12/12/business/ftx-sam-bankman-fried-bahamas.html), the charges filed against Bankman-Fried include wire fraud, wire fraud conspiracy, securities fraud, security fraud conspiracy, and money laundering.

However, it's still unclear whether customers will be able to recover some, if not all, of their funds. A 2 November report on ties between FTX and Alameda, a trading company also controlled by the FTX CEO, exposed that Alameda's balance sheet was overexposed to FTT currency (FTX's token).

According to the extradition treaty between the US and the Bahamas, defendants may be returned to the US provided their offenses carry a minimum one-year sentence in both countries.

The 30-year-old has recently disregarded legal counsel and increased his public appearances, providing his version of his company's abrupt failure and typically portraying himself as an inept CEO.

"I didn't knowingly commit fraud," he said during a BBC at the weekend. SBF told the interviewer he didn't want any of this to happen and added that he was "not nearly as competent" as he believed himself to be.



red image of crime scene with pictures of Sam Bankman-Fried and a sign that says "bahamas"

Former FTX CEO Sam Bankman-Fried Arrested

A [report](https://www.wsj.com/amp/articles/ftx-hires-forensic-team-to-probe-money-trail-11670446435?mod=lead_feature_below_a_pos1) from the Wall Street Journal (7 December) claims that FTX has formed a team of financial experts to trace billions of dollars in “missing” customer funds from the company.

The new management at FTX is looking to get to the bottom of the entire crisis, and they’re not aiming for a slow process. The team has outsourced the matter to a group of financial forensic experts to find out how and where the funds could have gone missing.

To be specific, [AlixPartners](https://www.alixpartners.com/), a firm that specialises in financial matters, has been trusted with this mountain of a task. This advisory committee will be led by Matt Jacques, formerly with the US Securities and Exchange Commission (SEC) as a chief accountant.

FTX will try to recover as many of the missing assets as possible with the help of this newly formed committee. Furthermore, the crypto company will need further assistance to rebuild its financial infrastructure from the ground up.

## Summary of the FTX crash

If you're even the slightest bit involved in the crypto industry, you've probably heard the name FTX pop up a few times over the last couple of months - and not in a good light. The crypto company has been under fire for letting almost $450 million of customer funds disappear.

The whole debacle and the story of "[who’s to blame](/news/article/ftx-bankrupt-who-to-blame)" is a mystery, even after months of speculation.

It's not the first time the company's CEO, Sam Bankman-Fried, has been alleged to have mismanaged customer funds. In an interview with [Vox](https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy), Bankman-Fried claimed to have passed customer funds through Alameda Research, FTX’s sister company. He did admit his lack of control over his company’s operations, as he [tweeted](https://twitter.com/sbf_ftx/status/1590709166515310593?s=46&t=Br1_HGNzUBwspKZ7pF6myA), "I'm sorry. I f--d up" after the fiasco broke.

The company filed for bankruptcy in November. It's difficult to see them making a comeback, largely due to two major factors:

•	The global negative PR that the company has been a victim of over the period of several months.

•	A low probability of recovering the lost funds.

FTX’s new management will need a miracle to even get crumbs from this entire mess.



red image of money with sam bankman-fried in the foreground

FTX Brings in Financial Experts

Elon Musk, the CEO of both Tesla and Twitter, [tweets his thoughts on Sam Bankman-Fried's reported donation to the Democratic Party](https://twitter.com/elonmusk/status/1598993109786189826). Musk believes the co-founder and former CEO of the defunct cryptocurrency exchange FTX sent far more money to the party than what was officially acknowledged.

Replying to a tweet by Will Manidis, CEO of ScienceIO, which mentioned that SBF donated $40M to the Democrats, Elon said he believes the amount contributed by the former CEO of the fallen crypto exchange FTX is far bigger than what has been publicly announced.

![elon.PNG](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/elon_2943e6d6a1.PNG)

## SBF donating to political parties - Not for the first time

It is not the first time San Bankman-Fried has donated to a political party. He has previously acknowledged giving to the Republican Party in a covert manner.

 In 2020, he was reported to have given $10 million to assist Carrick Flynn, a failed Democratic candidate for a House seat in Oregon, while also giving $5.2 million to Joe Biden's presidential campaign.

He gave Democrats $39,884,256, according to Opensecrets, before FTX collapsed and had to file for [bankruptcy](/news/article/ftx-bankrupt-who-to-blame). The exchange meltdown caused millions of dollars in losses for investors and users. A probe into FTX's handling of consumer money improperly is now underway. The fall of FTX sparked a contagion that has caused several other platforms and [companies to struggle and some to collapse](https://cryptopotato.com/how-wide-does-ftx-contagion-spread-the-affected-companies-so-far).

Then Elon Musk tweets his allegation that the publicly declared $40M donation is incorrect and the actual amount could be anything above $1B. The internet is already flooded with articles and comments alleging that Bankman-Fried donated this amount to a political party to avoid going to jail.

Meanwhile, SBF has been invited to participate in an investigational hearing set on 13 December, 2022, by Democratic House Financial Services Committee Chair Maxine Waters and Republican Ranking Member Patrick McHenry.

The crypto community, alongside investors who lost their money in the FTX fall, is angry and waiting for justice. What is the future of SBF and will the investors get their money back? These are some of the questions people are looking to get answers to. Clarity will only come after a proper investigation.


Elon Musk Tweets 'Where Did the Money Go?'

After facing the digital equivalent of a bank run, the [imploding crypto trading](https://www.seattletimes.com/business/explainer-whats-happening-at-bankrupt-crypto-exchange-ftx/) business is now in the red by billions of dollars. FTX, one of the biggest exchanges in the world, filed for bankruptcy last week. Its CEO and founder also resigned. The trading firm afterward stated that there had been "unauthorised access" and that cash had vanished.  

According to analysts, hundreds of millions in cash may have gone. Elliptic, an analytics firm, estimated on Saturday that $477 million was missing from the transaction. On social media, there was a debate about whether the exchange was hacked or whether a business insider had taken assets, which cryptocurrency analysts couldn't rule out.

Its new CEO, John Ray III, announced that it would disable the ability to trade or withdraw cash and would take actions to safeguard consumers' assets.

## FTX Bankrupt: How did it happen?

Customers abandoned the exchange due to concerns over its funds and agreed a sale to rival crypto [exchange](/news/article/ftx-uk-warning) Binance. However, the transaction fell through while Binance conducted due diligence on [FTX's](/news/article/ftx-vs-binance-liquidate-funds) balance sheet.

According to its bankruptcy petition, the crypto business estimated its assets at between $10 billion and $50 billion and identified more than 130 associated firms worldwide.

On Friday, FTX and hundreds of linked entities, including founder Sam Bankman-Fried's hedgefund Alameda Research, filed for bankruptcy in Delaware.

## FTX Bankrupt: Bankman-Fried accepts blame

Sam Bankman-Fried apologised on [Twitter Thursday morning](https://twitter.com/sbf_ftx/status/1590709166515310593?s=46&amp;t=Br1_HGNzUBwspKZ7pF6myA), saying he "f—-ed up" and should have done better. Bankman-Fried also announced the closure of Alameda Research, the trading business he co-founded with FTX.

The tweet comes as the former crypto industry star pleads for billions of dollars to avoid bankruptcy. 

This week has been a rapid fall from grace for FTX. After valuing the exchange at $32 billion earlier this year, Bankman-Fried is now searching for someone to backstop the crypto business [after rival exchange Binance withdrew from a plan](https://www.cnbc.com/2022/11/09/binance-backs-out-of-ftx-rescue-leaving-the-crypto-exchange-on-the-brink-of-collapse.html) to purchase it.

He is worth an estimated $23 billion and has been a major political donor to Democrats.



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