CRYPTO KLEPTO KLOBBERED
Sam Bankman-Fried charmed Washington. Then his crypto empire imploded.
Washington Post
Sam Bankman-Fried, the 30-year-old wunderkind of cryptocurrency, spent tens of millions of dollars over the past year trying to reshape how Washington and the world think about finance.
The crypto exchange he founded, FTX, had become an industry-dominating business in just three years, valued at $32 billion as recently as January. He amassed political clout in an even bigger hurry, emerging from obscurity to become the second-biggest Democratic donor in the midterm elections. By Friday, the money and the clout had disappeared: Bankman-Fried resigned from FTX, which then filed for bankruptcy. On Saturday, the company revealed it was investigating “unauthorized transactions” worth more than $400 million and that it had moved all funds into offline storage. And Bankman-Fried was left facing harrowing questions about his role in the most catastrophic collapse the notoriously volatile crypto industry has so far seen.
With his disheveled appearance, super-casual manner and earnest insistence that he was trying to use his money to save the world, Bankman-Fried stood apart from the stereotype of crypto brats blowing instant riches on Lamborghinis and yachts. His purported power over the crypto market drew comparisons to Wall Street financier J.P. Morgan, yet he saw himself as using his fortune for good, not greed.
How his career careened off course is a tale of ambition, hubris and ultimately recklessness — the full contours of which have yet to be publicly revealed. When Bankman-Fried was just 28, he built a platform that offered investors easy access to buying, selling and stashing bitcoin and other cryptocurrencies. The offshore exchange allowed investors to place risky bets not allowed in the United States, though it was easy enough for American users to find workarounds; a U.S. affiliate offered limited services. With a massive marketing push — including a flashy Super Bowl ad and naming rights to the arena that is the home of Miami Heat — he sought to make crypto trading a mainstream pastime.
Meanwhile, he was using his newfound political clout to sell Washington on a regulatory regime that promised to work to his advantage. The contrasts were glaring and never easily reconciled: As crypto’s self-appointed ambassador to Washington, Bankman-Fried was pressing for federal regulation even as he dodged U.S. oversight from his corporate headquarters in the Bahamas.
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