Sam Bankman-Fried

FTX operated as a regulated cryptocurrency exchange. Customers deposited money believing it was held in segregated accounts. It wasn't. Sam Bankman-Fried had secretly wired a line of credit — written into the exchange's code by co-founder Gary Wang — that allowed his hedge fund, Alameda Research, to borrow from FTX customer accounts without limit and without disclosure. Alameda spent the money on risky trades, real estate, and political donations. When FTX customers attempted to withdraw their funds in November 2022 after a market panic, the exchange was insolvent. FTX filed for bankruptcy on November 11, 2022. Approximately $9 billion was owed to customers. SBF was arrested in the Bahamas twelve days later, extradited to the United States, and indicted on seven counts. At trial, his former girlfriend and Alameda CEO Caroline Ellison testified that SBF had directed her to use customer funds to repay Alameda's lenders. Wang testified that he had written the code creating the backdoor. On November 2, 2023, the jury convicted SBF on all seven counts — wire fraud (×2), conspiracy to commit wire fraud (×2), conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering. On March 28, 2024, Judge Lewis Kaplan sentenced him to 25 years in federal prison. Forfeiture: $11 billion. The judge found SBF had perjured himself three times during trial testimony and demonstrated "exceptional flexibility with the truth."

• ▸Alameda Research maintained a secret, effectively unlimited line of credit from FTX customer accounts — written into FTX's code by co-founder Gary Wang.
• ▸$8B+ in customer deposits transferred to Alameda for trading losses, real estate, and political donations. Customers had no knowledge or consent.
• ▸FTX bankruptcy filed November 11, 2022. ~$9B owed to creditors at collapse.
• ▸Jury verdict: guilty on all 7 counts (November 2, 2023).
• ▸Sentence: 25 years federal prison; $11B forfeiture (March 28, 2024).
• ▸Judge Kaplan: SBF "perjured himself three times," showed "exceptional flexibility with the truth," and put on a "performance" on the stand.
• ▸Co-conspirators who pled guilty and testified: Caroline Ellison (Alameda CEO), Gary Wang (FTX co-founder), Nishad Singh (head of engineering), Ryan Salame (co-president, Bahamas operations).

Sam Bankman-Fried was among President Biden's largest individual donors in the 2020 presidential cycle. By 2022, he had become the largest single individual donor to the Democratic Party — publicly disclosing at least $40M, with the DOJ alleging the real total exceeded $100M. The money came from FTX customer deposits. In parallel, SBF ran a straw donor scheme: he funneled donations through FTX executives to avoid campaign finance disclosure rules. Nishad Singh, FTX's head of engineering, was the Democratic conduit — he made millions in donations from accounts funded by FTX. Ryan Salame, the co-president of FTX's Bahamian operations, was the Republican conduit, making millions in donations to Republican PACs using funds routed through the same system. The stated goal, according to prosecutors and cooperating witnesses: purchasing political access and regulatory protection for FTX at a critical period when Congress was debating crypto oversight legislation. Salame pled guilty to campaign finance charges and was sentenced to 7.5 years in federal prison specifically for the illegal donations. The DOJ told Congress it should hand back the donations; prosecutors in multiple jurisdictions sought to claw back campaign finance transfers made with stolen funds.

• ▸Publicly disclosed donations: ~$40M in 2022 cycle (SBF direct). DOJ alleged actual total exceeded $100M.
• ▸SBF was the largest individual donor to the Democratic Party in the 2022 midterm cycle.
• ▸Straw donor scheme: Nishad Singh (Democratic conduit) and Ryan Salame (Republican conduit) made donations in their names using FTX-sourced funds.
• ▸Purpose per DOJ and cooperating witnesses: purchase political access and regulatory protection during congressional crypto debate.
• ▸Ryan Salame pled guilty; sentenced to 7.5 years for illegal campaign donations.
• ▸DOJ directed Congress to return donations made with stolen customer funds.
• ▸SBF was convicted on a count of conspiracy to commit campaign finance fraud as part of the broader conviction.

"Effective altruism" is a utilitarian philosophical movement that argues accumulating vast wealth is morally justified if the wealth is then donated to high-impact causes. Sam Bankman-Fried became the movement's defining billionaire practitioner — the proof that "earn to give" worked in practice. He cultivated the persona meticulously: the rumpled cargo shorts, the dorm-room sleeping bag in the office, the cover stories in Forbes ("Sam Bankman-Fried Had a Savior Complex — And Maybe You Should Too"), Time, and the New York Times. The positioning gave him extraordinary access: Senate testimony, meetings with Biden administration officials, endorsements from EA-adjacent public intellectuals, and a presumption of ethical seriousness that other crypto executives did not receive. The FTX Future Fund — the philanthropic vehicle SBF's team launched in early 2022 — committed approximately $160M to 110 nonprofits by September 2022, primarily focused on pandemic prevention, AI safety, and EA infrastructure. The money was customer deposits. When FTX collapsed in November 2022, the Future Fund shut down and grantees scrambled. In private texts with a Vox journalist, disclosed during trial, SBF described his public commitment to altruism as "a dumb game we woke westerners play where we say all the right shibboleths and then we all end up better off." He described himself as a "weird hyper-politicized game theory nerd" who wore the branding strategically. The EA movement, built on the premise that billionaire philanthropy is morally justified by its outcomes, had provided the cover for one of the largest financial frauds in American history.

• ▸SBF cultivated an "effective altruist" persona from 2017 onward — Forbes, Time, NYT profiles; Senate testimony; Biden administration access.
• ▸FTX Future Fund committed ~$160M to 110 nonprofits by September 2022. Focus: pandemic prevention, AI safety, EA infrastructure.
• ▸Those commitments were backed by FTX customer deposits — money that did not belong to SBF.
• ▸When FTX collapsed (November 2022), the Future Fund shut down; most grants were cancelled or clawed back.
• ▸Private texts to Vox journalist (disclosed at trial): SBF called his EA commitment "a dumb game we woke westerners play." Said he wore the branding strategically.
• ▸The EA persona generated unprecedented regulatory and journalistic trust — shielding FTX from scrutiny other crypto exchanges faced.
• ▸Post-collapse, the EA community faced a structural reckoning: "earn to give" as a philosophical premise had been exploited as active fraud cover.

FTX was incorporated in the Bahamas in 2021. Sam Bankman-Fried's stated reason: the regulatory environment was favorable. He publicly discussed paying off the Bahamas' $9 billion national debt to cement the relationship. At the same time, FTX deployed lobbyists and political donations in Washington, and SBF personally testified before Congress, advocating for a crypto regulatory framework that would place crypto exchanges under the CFTC rather than the stricter SEC. The proposed framework — if enacted — would have given FTX a US operating license without requiring the financial disclosures that would have revealed the Alameda black hole at the center of the exchange. In private messages to Vox journalist Kelsey Piper, disclosed when she published them during the FTX collapse: SBF described his public advocacy for crypto regulation as "just PR." He said regulators "make everything worse" and "don't protect customers at all." The CFTC, having received his testimony, filed fraud and material misrepresentation charges against SBF, FTX, and Alameda in December 2022. The SEC filed parallel charges. The investors SBF defrauded included both FTX customers and equity investors who had been given falsified financial representations about FTX's condition and Alameda's exposure.

• ▸FTX incorporated in Bahamas (2021). Stated reason: favorable regulatory environment. SBF discussed paying off Bahamas' $9B national debt.
• ▸SBF testified personally before Congress advocating for crypto framework under CFTC (lighter-touch) rather than SEC.
• ▸The proposed CFTC framework would have given FTX a US license without requiring financial disclosures that would have exposed the Alameda line of credit.
• ▸Private Vox texts: SBF called his regulatory advocacy "just PR." Said regulators "make everything worse" and "don't protect customers at all."
• ▸CFTC filed fraud and material misrepresentation charges against SBF, FTX, and Alameda (December 2022).
• ▸SEC filed parallel charges: FTX equity investors were defrauded with falsified representations about the exchange's financial condition.
• ▸The SEC had met with SBF as recently as weeks before collapse — he was considered a credible industry voice on regulation.

When FTX collapsed, approximately $9 billion was owed to customers — both retail depositors who had entrusted the exchange with savings of tens of thousands of dollars, and institutional counterparties who had deposited millions. Many had believed their assets were held in segregated accounts, protected from exchange operations. They were not. The four FTX insiders who cooperated with the government all pled guilty. Caroline Ellison, Alameda's CEO and SBF's ex-girlfriend, was sentenced to 24 months in September 2024 after providing the prosecution's most damaging testimony — including that SBF had personally directed her to use customer funds to repay Alameda's loans. Gary Wang, who built the backdoor into FTX's systems, cooperated fully. Nishad Singh, head of engineering and Democratic straw donor conduit, pled guilty. Ryan Salame, the Republican straw donor conduit and FTX's Bahamian co-president, was sentenced to 7.5 years specifically for illegal campaign donations. SBF's request for a new trial was denied. He appealed his conviction and sentence in April 2024; the appeal was pending at the time of writing. FTX's bankruptcy estate has made significant asset recoveries — reports suggest creditors may eventually receive substantial repayment. This does not change the nature of what was done to them.

• ▸~$9B owed to FTX customers at collapse: retail depositors (tens of thousands) and institutional customers (millions).
• ▸Caroline Ellison (Alameda CEO): pled guilty, sentenced 24 months (September 2024), forfeits $11B.
• ▸Gary Wang (FTX co-founder): pled guilty, cooperated, wrote the code that created the hidden Alameda credit line.
• ▸Nishad Singh (head of engineering): pled guilty, testified, was the Democratic straw donor conduit.
• ▸Ryan Salame (FTX co-president): pled guilty, sentenced 7.5 years — specifically for illegal campaign finance contributions.
• ▸SBF's motion for a new trial denied. Appeal filed April 2024.
• ▸FTX bankruptcy estate: significant asset recovery ongoing; creditors projected to receive substantial repayment, though the fraud timeline and its harms are not retroactively erased.