A 17-mile journey separates Albany’s exclusive condominium complex from Fox Hill Prison, almost at either end of New Providence, the most populous island in the Bahamas. There is a world of distance between the two places. The young fallen king of cryptocurrencies, Sam Bankman-Fried, has gone from the luxury mansion where he lived a life of excess, drugs and polyamory with other friends and FTX executives – at the expense of the money of betrayed clients and investors – to a prison under appalling conditions.
The Bahamas’ only prison suffers from “overcrowding, poor nutrition, inadequate sanitation and inadequate medical care” with “rat, worm and insect infested cells,” according to the State Department’s latest report on the country. The judge denied Bankman-Fried bail and he must await extradition to the United States, where prosecutors will charge him with eight felonies that carry a maximum of 115 years in prison.
Fox Hill Prison in Nassau (Bahamas) MARIA ALEJANDRA CARDONA (Portal)
His parents, law professors at Stanford, came to the hearing and gave him a goodbye hug. Bankman-Fried is also saying goodbye to a life of excess funded by the $8,000 million allegedly siphoned off by cryptocurrency exchange FTX clients. Bankman-Fried and other executives spent hundreds of millions buying luxury properties in the Bahamas for themselves and their employees. The company’s founder lived in a large villa with other twenty-somethings, friends and at the same time executives of the group. His parents enjoyed another home on the island, also paid for by the company, which bought dozens of homes for their employees.
They didn’t deprive themselves of anything. The Financial Times reported that after the company relocated its headquarters from Hong Kong to the Bahamas last year, it found Amazon’s delivery was not making it there. They have hired a private air transport service to get the shipments to Miami and from there to the island.
normal life
Bankman-Fried, 30, hasn’t just misled investors, lenders and customers. He also sold a false image of a strict person (driving a Toyota Corolla and dressed in a t-shirt and shorts) and an altruist who just wanted to make money to use for good causes. Speaking of his $30 million luxury mansion, he described it as “a condo” for four people that had been converted into one for ten people. “It’s beautiful even though we’re overcrowded,” he said in an interview with CNBC just over three months ago, while still boasting about the legacy he would leave to the world with his generosity. Meals, massages and expenses at local locations were paid for by the company. The boundaries between work and private life are blurring.
He met the other nine roommates at the Massachusetts Institute of Technology (where he studied physics) or at the investment firm Jane Street, where he started his career and learned quantitative investing techniques. The group living in the mansion included FTX’s other two founders, Gary Wang (head of technology) and Nishad Singh (head of technology), and Caroline Ellison, the manager of Alameda Research, Bankman’s private crypto firm – Fried, who played a key role in the scam.
Ellison, 28, was the Bankman-Fried’s most stable couple, but according to Coin Desk, the same magazine that broke the news that led to the group’s collapse, “are or were the ten a pair of romantic relationships with each other.” They practiced polyamory , a consensual form of polygamy in which couples seek multiple romantic or sexual relationships, or lived more like a polycule (a word composed of polyamory and a Molecule)., a network of interconnected romantic relationships. The Wall Street Journal has also reported that romantic relationships were common among members of FTX’s upper echelons.
Caroline Ellison herself wrote a message on the social network Tumblr, in which she referred to her experience: “When I started my first foray into the police force [amor]I felt it was a radical break with my past. But to be honest, I’ve come to the conclusion that the only acceptable style of police officer is best characterized as “Imperial Chinese Harem”… none of that non-hierarchical nonsense. Everyone should have their affiliates ranked, people should know where they rank and there should be power struggles over rankings,” he said.
Bankmann-Fried He was upset in a recent interview when asked about after the first information about it was published: “In my humble opinion, we as a society have already spent enough time this week trying to find out if anyone living in Albany is practicing polyamory,” he replied. The FTX founder claims he was no longer romantically linked to Ellison. Specialist publications say she has been spotted in New York and speculate that she is negotiating with the authorities to cooperate in the investigation into Bankman-Fried.
medication
Stimulants, antidepressants and other medications were also part of the Albany mansion’s regular diet. “Nothing beats regular use of amphetamines to understand how stupid the normal, untreated human experience is.” Ellison tweeted last year. “Stimulants when you wake up, sleeping pills when you need them, when you sleep,” tweeted Bankman-Fried in 2019, who assured in a 2020 interview for a podcast that “probably half or more people should be taking medication of some kind because it just makes you sick.” They make life so much better.”
He particularly praised nootropics, or brain-boosting drugs, that can be “life-changing.” In a recent interview in a New York Times forum, he affirmed that he had never seen illegal drug use in the office or at parties at his mansion. He then specified that they were more like dinners, that there were no wild parties, and that they hardly ever drank alcohol. “When we had parties, we played board games,” he said.
Bankman-Fried says he took medication that was prescribed to help him focus. The first thing he asked for at the parole hearing was his medication, which he had been stripped of while in prison. When he said he had to take his shirt off to put it on, the judge told him to come out. The FTX founder uses Ensam patches, a powerful antidepressant.
The Mountain of Deception had great packaging. Prior to the group’s collapse, Bankman-Fried had spent $135 million sponsoring NBA team Miami Heat. She also signed celebrities such as supermodel Gisele Bundchen, her ex-husband Tom Brady, the best American football player in history, and basketball star Stephen Curry. He ran an ad at the Superbowl. He also donated millions of dollars to the Democratic and Republican parties, which prosecutors say are illegal because they were funded by the platform’s customers.
Bankman-Fried’s fortune – on paper – reached more than $25 billion when FTX was worth more than Deutsche Bank. He received hundreds of millions of dollars in “loans” from the company, again with funds from clients. Now he says he has about $100,000 left in the bank. He also owes the company millions of dollars in debt.
a successful start
Bankman-Fried was a brilliant student. Born in 1992 on the Stanford University campus, where his parents practiced, he showed his aptitude for mathematics as a teenager. He had a rough time in high school and then came to MIT, where he fitted into a fraternity that was more gambling than drinking, and met Wang, by then a cryptocurrency expert. She did an internship at investment firm Jane Street Capital and joined after graduation. He was good at it. There he met Caroline Ellison.
By this time he had become interested in altruism, claiming that getting rich and donating one’s wealth was more effective than working for a center to help others. After three years, he left Jane Capital and founded his own cryptocurrency-focused investment firm, Alameda Research, based in Delaware but based in Berkeley, California, with Wang, a technology expert who had by then started working at Google.
The idea was simple and worked well: it was about arbitrage, exploiting price differences between markets. Bitcoin has traded much higher in South Korea and Japan than in the United States. If it could overcome the regulatory obstacles and liquidity problems of an underdeveloped market like crypto assets, it could buy cryptocurrencies in the United States and sell them up to 30% more expensive in Asia. easy money.
Alameda was successful. The next step seemed obvious: to be the one to create a cryptocurrency trading platform itself, to facilitate a liquid and relatively organized market that would make cryptocurrencies accessible to investors large and small. He took the plunge in 2019. He founded the Hong Kong market, which had more favorable regulation. It was actually a good idea, the market worked pretty well, it was well designed, and it was a commercial success, although it already had flaws in its risk control systems and internal operations (withdrawals were authorized using emoticons in internal chats).
However, it was a scam from the start as the guarantees and conditions imposed on all other customers were not required by Alameda, the Bankman-Fried firm itself, which kept them secret from investors and depositors. In addition, FTX clients’ funds were diverted to Alameda, which borrowed them with no real guarantees. The funds from FTX, led by Bankman-Fried, and Alameda, led by Ellison, were mixed.
As the market continued to strengthen and Alameda continued to make money on its investments, Bankman-Fried was able to fool everyone. He took a forward flight with the cryptocurrency crisis until the cake was discovered: he had diverted 8,000 million customers into his own fund. The cryptocurrency hero was a villain according to the charges against him. If convicted, he faces a long time behind bars.
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