From crypto hero to hated liar

Ten billion wiped out – over 94 percent of his wealth. In 24 hours. A record. Never before has a Forbes billionaire lost more of his wealth in a single day than Sam Bankman-Fried after his exchange, FTX, collapsed on November 9, 2022. It is facing bankruptcy. A drama that could drag the entire crypto sector down with it. Some are already talking about the “Lehman Brothers” moment in the industry.

Sam Bankman-Fried’s story is one of unprecedented rise and fall. With a fortune of over $11 billion, the FTX founder will become the second richest crypto entrepreneur in the world in five years, right behind Binance CEO Changpeng Zhao. According to Forbes, only Mark Zuckerberg got richer faster than the 30-year-old today.

At the beginning of his journey, he doesn’t even own a bitcoin. Then he makes millions as a crypto trader – by exploiting a loophole, a significant bitcoin price difference between Japan and the US, the “kimchi premium”. He ends up making $25 million in profit on one trade. With the money and generous funding from funds, he founded FTX in 2019. After only three years, it is one of the most valuable and largest US crypto exchanges, with a gigantic war chest.

You can read all current events relating to the Causa FTX in the always up-to-date news ticker on the subject.

Vegans with a gambler heart who do without luxury

Sam Bankman-Fried was born on the Stanford campus in 1992 to two elite law professors. After graduating from a private high school in the Bay Area, he studied physics at MIT for four years. However, he spends most of his time playing video games such as “Starcraft” and “League of Legends”. He loves the rush of making quick decisions under time pressure: “When playing chess or other games, he always insisted on playing with a timer,” says a fellow student about him in an interview. This tendency is now his undoing.

Despite his billion-dollar fortune, Sam Bankman-Fried consciously renounces luxury. A vegan by choice, he wears simple clothes and drives a Toyota Corolla around the streets of the Bahamas, where he has lived since 2021. At night he sleeps in the office, on a beanbag. Less than five hours a night. The employees can wake him up at any time when they are looking for advice.

From Hero to Fallen

Some already saw him as the JP Morgan of the crypto era. Others are the same: the savior of the crypto industry, their Robin Hood. According to his own statements, he has set up a rescue fund of over two billion US dollars. In June 2022, Sam Bankman-Fried lent over $250 million to now-bankrupt crypto broker Voyager Digital, then bought struggling crypto lender BlockFi at a bargain price (25 million instead of $4 billion), previously holding shares in broker Robinhood.

The image of the conscientious crypto hero is now collapsing. A completely different character emerges: a pathological liar and gambler. Just five months ago, in an interview with Forbes, he warned: “Some crypto exchanges are already secretly insolvent.” Back then he must have known: his own balance sheet is highly risky, if not illegal; and that eventually everything will collapse.

A tweet that is now doing the rounds: Sam Bankman-Fried is playing a game of “League of Legends” on the Steam PC platform after the crash. Like back then, at university. Only this time his time seems to have finally run out.