Sam Bankman-Fried

Sam Bankman-Fried is an American entrepreneur and former chief executive of the FTX cryptocurrency exchange and the trading firm Alameda Research. Once regarded as one of the most influential figures in digital assets and a leading proponent of “effective altruism”, he later became central to one of the largest fraud cases in crypto and U.S. financial history. Following the 2022 collapse of FTX and Alameda, Bankman-Fried was convicted on multiple fraud and conspiracy charges and sentenced to 25 years in federal prison.

Overview

Born in 1992 in Stanford, California, Sam Bankman-Fried (often referred to as “SBF”) studied physics and mathematics at the Massachusetts Institute of Technology (MIT). After graduating, he worked as a quantitative trader at Jane Street Capital before launching his own crypto-focused trading firm, Alameda Research, in 2017. In 2019 he co-founded FTX, a derivatives-heavy crypto exchange that rapidly grew into a major global venue for trading spot and leveraged digital asset products.

At FTX’s peak, Bankman-Fried was portrayed as a responsible and philanthropic face of the crypto industry, with a personal fortune estimated in the tens of billions of dollars. That reputation unraveled in late 2022 when FTX filed for bankruptcy and evidence emerged that billions in customer funds had been misused to cover losses and finance Alameda’s trading operations.

Early Life, Education, and Career

Bankman-Fried was raised in a family of academics; both parents are law professors at Stanford University. He attended Crystal Springs Uplands School in California and later MIT, where he graduated with a degree in physics and a minor in mathematics. During college he was active in the effective altruism community, which emphasizes using evidence and reason to maximize positive impact through career and philanthropic choices.

After MIT, he joined Jane Street Capital in New York, trading international ETFs and gaining experience in quantitative strategies, arbitrage, and risk management. In 2017 he left traditional finance to focus on cryptocurrency markets, founding Alameda Research to exploit arbitrage opportunities, including price differences for Bitcoin and other assets across global exchanges.

Creation of Alameda Research and FTX

Alameda Research began as a proprietary trading firm, engaging in arbitrage, market making, and directional strategies across the crypto ecosystem. The firm became known for its high volumes on major exchanges and its role as a liquidity provider in emerging markets.

In 2019, Bankman-Fried and his team launched FTX, positioning it as a professional-grade crypto derivatives platform tailored to sophisticated traders. The exchange offered perpetual futures, options, tokenized stocks, leveraged tokens, and later spot markets. FTX grew quickly through aggressive product innovation, institutional relationships, sponsorships, and a prominent marketing presence, including naming rights to sports arenas and high-profile celebrity endorsements.

FTX also issued its own exchange token, FTT, which offered trading fee discounts and other benefits and became a key component of the firm’s capital structure and balance sheet.

Collapse of FTX and Alameda

In November 2022, FTX and Alameda came under intense scrutiny after reports indicated that Alameda’s balance sheet was heavily concentrated in FTT and other illiquid assets closely tied to FTX. Confidence rapidly deteriorated, leading to massive customer withdrawals from the exchange. Within days, FTX froze withdrawals and filed for Chapter 11 bankruptcy, along with dozens of affiliated entities.

Post-bankruptcy filings and testimony from the new CEO, John J. Ray III, described a “complete failure of corporate controls” and revealed that customer deposits from FTX had been diverted to Alameda to fund losses, venture investments, political donations, and real estate purchases. The shortfall between customer liabilities and available assets ran into the billions of dollars, leaving millions of users facing uncertain recoveries.

Criminal Charges, Trial, and Sentencing

Bankman-Fried was arrested in the Bahamas in December 2022 and extradited to the United States. Federal prosecutors charged him with multiple counts of wire fraud, securities fraud, commodities fraud, money laundering, and related conspiracies stemming from the alleged misuse of customer funds and misleading statements to investors, lenders, and regulators.

In late 2023, after a high-profile trial in New York, a jury found Bankman-Fried guilty on seven criminal counts of fraud and conspiracy. Evidence included testimony from close associates and former executives, internal records, and communications indicating that he directed or approved the transfer and deployment of FTX customer assets for Alameda’s operations.

On March 28, 2024, he was sentenced to 25 years in federal prison and ordered to forfeit billions of dollars. The court characterized the conduct as a major financial fraud that caused vast monetary and personal harm to customers and investors. Bankman-Fried is incarcerated at a low-security federal facility in California while pursuing appeals of his conviction and sentence.

Appeal and Ongoing Legal Proceedings

Following sentencing, Bankman-Fried’s legal team filed an appeal arguing that he did not receive a fair trial and that important defense evidence and arguments were improperly curtailed. As of late 2025, a federal appeals court has heard oral arguments but has not yet issued a ruling. Separate civil actions by regulators and private plaintiffs continue in connection with FTX’s collapse and alleged misrepresentations to investors and counterparties.

Significance for the Digital Asset Ecosystem

Sam Bankman-Fried’s trajectory from widely praised crypto founder to convicted fraudster has become a defining story of the 2020–2022 digital asset boom and bust. The failure of FTX, once seen as a flagship centralized exchange, accelerated calls for stricter regulation of trading platforms, custody practices, stablecoins, and conflicts of interest between exchanges and affiliated trading firms.

For regulators and policymakers, the case underscores the need for robust oversight, transparent financial reporting, and clear segregation of customer assets in digital asset markets. For investors and builders, it serves as a cautionary example of how rapid growth, leverage, and weak governance can magnify risks in a largely borderless and always-on financial system. Bankman-Fried’s conviction and sentencing are likely to influence enforcement priorities, compliance standards, and public perceptions of centralized crypto firms for years to come.

• FTX Former CEO & Founder
• Alameda Research Former CEO & Co-Founder