A top Silicon Valley investor firm once boldly predicted that Sam Bankman-Fried could become the world’s “first trillionaire.”
And yet the young business guru apparently despised wealth. He promised to give away his money and was known to wear only baggy shorts and old T-shirts, even when sharing a debate stage with Tony Blair and Bill Clinton.
But now the heady talk of trillions and saving the planet has imploded in one of the biggest financial frauds of all time. And the sloppily dressed cryptocurrency entrepreneur has a new uniform – one for prison.
The 31-year-old “SBF,” as he is known, is an extraordinary fall from grace for one of the tech world’s golden boys, whose business empire shrank from £21bn to virtually nothing in a matter of days and faces a backlog of up to 110 years .
After a month-long trial, a Manhattan jury took just over four hours to find him guilty on all seven counts of stealing from customers of his now-bankrupt cryptocurrency exchange FTX.
Sam Bankman-Fried faces up to 110 years behind bars after running a £21bn business empire
Bankman-Fried could well be followed into prison by three of his colleagues – including his on-off girlfriend Caroline Ellison (pictured above).
In the picture, Bankman-Fried stands while the verdict is read
Prosecutors refuted his claims that he was just a clueless “altruist” who naively trusted his colleagues too much – he was disorganized, incompetent and even irresponsible, he had insisted, but not a fraud.
“The crypto industry may be new, the players like Sam Bankman-Fried may be new, but this type of fraud is as old as time and we have no patience for it,” senior prosecutor Damian Williams told the court after the verdict was handed down on Thursday evening.
The court heard that SBF stole up to $10 billion (£8.2 billion) from users of FTX, an online exchange where customers deposited cryptocurrencies such as Bitcoin, and risked them for lavish real estate, political donations Investing and paying huge sums of money has been spent.
When asked what he knew about cryptocurrencies, the one-time darling of the financial technology world replied: “Basically nothing.” He said he knew they existed but had “absolutely no idea how they work.”
Bankman-Fried could well be followed to prison by three of his colleagues – including his sometime girlfriend Caroline Ellison – who have pleaded guilty and have yet to be sentenced.
But there are others, many of whom believe they will also have to answer for the scandal, albeit not criminally. The judge let the FTX investors off the hook, saying they were not relevant to the case against SBF.
However, there were also celebrities – from Clinton and Blair to pop star Katy Perry and supermodel Gisele Bundchen – who fawned over SBF and happily lent their star power to his fraudulent company, even though there is no evidence that they knew the company was criminal acted.
The glow of fame was a crucial part of the operation. Despite his supposed cluelessness, SBF understood the power of celebrity endorsement. He needed stars on board to drum up excitement for cryptocurrencies, an industry built on secrecy and struggling to break free from its association with drug traffickers and money launderers.
Bill Clinton and Tony Blair flattered SBF and happily lent their star power to his fraudulent enterprise
FTX had agreed to a deal to pay superstar singer Taylor Swift between £20m and £25m a year just to plug the company
He lavished staggering sums on stars – paying American football icon Tom Brady £45m and his then wife, Brazilian supermodel Gisele Bundchen, a further £16m for just 20 hours of their time promoting FTX.
He also spent £8 million to have actor Larry David, star of comedy series Curb Your Enthusiasm, appear in a 60-second commercial shown on US television during the Super Bowl.
According to SBF biographer Michael Lewis, FTX had agreed to a deal to pay superstar singer Taylor Swift between £20 million and £25 million a year just to plug the company, but Bankman-Fried eventually backed out.
The A-listers who attended the FTX dinner party
Lewis described how SBF met many of his future top friends for the first time at a February 2022 dinner party held at Hollywood agent and investor Michael Kives’ Beverly Hills mansion.
The guest list—Hillary Clinton, Leonardo Di Caprio, Katy Perry, Amazon CEO Jeff Bezos, actors Orlando Bloom and Kate Hudson, and at least four members of the Kardashian family—was so impressive (and unlikely) that SBF staff thought it could be a ruse.
Many of the celebrities would have already heard that the wild-haired Silicon Valley whiz kid, a childhood math genius, was being hailed as the future of finance, a man who could bring respectability to the seedy world of cryptocurrencies and make them even richer.
Instead, his colleagues were convinced that the dinner could be a kidnapping attempt by criminals who knew that SBF was a billionaire with no bodyguards.
After flying with him from the Bahamas, where SBF lived in a £25 million apartment, a senior FTX executive, accompanied by a small “rescue team”, duly waited in a car outside the party to “storm” the house “ and to evacuate him if necessary.
Eventually he was led to the back lawn, dressed in his usual cargo shorts and t-shirt of course, and discovered that the 50-person guest list was billed the same way. “I think it’s real,” he texted his team outside.
The socially awkward SBF came out of his shell enough to chat with Clinton and Perry, who – during a karaoke session that evening – sang a song with lyrics changed to mention FTX. The next day, Perry jokingly gushed on Instagram that she was quitting the music industry to become an FTX intern.
The charm offensive seemed to be paying off. Two months later, when FTX held a four-day conference at a luxury resort in the Bahamas in April, some of those he met at the party – or other celebrities associated with them – coughed up the $3,000 to attend the event per ticket cost .
Held at the luxury hotel Grand Hyatt Baha Mar, attendees at Crypto Bahamas were able to enjoy everything from sunrise yoga sessions on the beach and late-night parties to high-profile seminars on the future of crypto, world affairs and philanthropy.
Everyone seemed to want to pose for a selfie with SBF, who took part in many of the debates.
Those who agreed to sit down and have a solemn chat with the scammer must now cringe in embarrassment.
Blair and Clinton, former world leaders who have both made fortunes since leaving office, joined him on the FTX stage for a discussion titled “The World Today.”
The conversation was technically “unofficial,” but a few details emerged: SBF joked that he felt “a little overdressed,” while Clinton more presciently warned about the “temptation to abuse new technologies like cryptocurrencies.”
Gisele Bundchen, who had been rather absurdly hired as FTX’s head of “environmental and social initiatives,” sat down with Bankman-Fried for a conversation titled “Effective Altruism: Education, Empowerment, and the Environment.”
(SBF claimed to be followers of “effective altruism,” a philanthropic movement that grew out of Oxford University and encourages people to make as much money as possible so they can then donate it to good causes.)
Bundchen’s then-husband, sports star Tom Brady, who, like her, had signed a “long-term” partnership with FTX and was one of its “ambassadors,” gave a talk with SBF on the topic of “Winning.”
As expected, those involved had little to say when FTX collapsed and SBF was arrested just a few months later. Although they clearly had no idea about the scam, no one came out of the incident well.
A spokesman for the former prime minister said only: “Tony Blair organized an event for FTX, organized by his speakers’ organization, and that’s all.”
Others were even less forthcoming, while some are unable to comment even if they wanted to because they are already embroiled in legal action. Tom Brady, Gisele Bundchen and Larry David are among those being sued for promoting FTX.
The FTX exchange was based in the penthouse in the Bahamas, which was up for sale in November 2022 after the company filed for bankruptcy
The view from the FTX Bahamas Penthouse
The property features Venetian plaster walls with matching Italian marble accents, an LED lighting system and a private garage
The US Democratic Party is also embarrassed by its ties to SBF, as it took millions of dollars of his money and later allowed him to help draft cryptocurrency legislation.
The great and the good have often been eager to woo SBF – ignoring the experts who have long warned that the cryptocurrency industry is a tangle of scoundrels and scammers – either for his money’s sake or simply to make it seem like they are ahead of the times. And they weren’t much more eager than Vogue queen Anna Wintour, who, as author Michael Lewis revealed, had a humiliating encounter with SBF during a Zoom video chat.
Gisele Bundchen established contact between the two. If the notoriously haughty magazine editor knew that SBF was actually playing a video game while pretending to listen to her tweet about her annual, high-profile Met Gala benefit ball in New York – which he was supposed to not only attend, but also fund – it would seem that she didn’t let on.
SBF flew from the Bahamas to Los Angeles on a private jet in February 2022, carrying only his laptop and a change of underwear for a series of business meetings and parties.
One morning while staying at the Beverly Hilton Hotel in LA, British-born Wintour appeared on his screen.
“Sam didn’t really know who Anna Wintour was,” Lewis writes. “Natalie [his assistant] and others had informed him, but he had not paid attention.”
“He knew Anna Wintour was publishing a magazine. Perhaps he only vaguely knew that Meryl Streep had played her in The Devil Wears Prada and that she had ruled the treacherous world of women’s fashion ever since. . . before Sam was born.’
However, SBF was disdainful of the fashion world. As Wintour began to speak, “he clicked a button and she disappeared from his screen.” Instead, he began playing his favorite video game, Storybook Brawl, in which fantasy creatures fight for dominance.
He could still hear her through his headphones and answered “yes” to everything she said. “If she wasn’t paying attention to his eyes, she had no reason to think he wasn’t paying attention,” Lewis said.
SBF ended the conversation, leaving Wintour with the distinct impression that he would not only be her special guest on the red carpet, but “maybe even pay for the whole thing.”
In the weeks that followed, his staff asked Louis Vuitton to design a high-fashion version of his ubiquitous T-shirt and cargo shorts, and also paid Tom Ford to design a “more conventional outfit, complete with £53,000 worth of cufflinks.” “.
When SBF’s assistant told the notoriously formidable Wintour office at the last minute that he wouldn’t be leaving, they were reportedly furious and shouted: “Sam will never set foot in the fashion world again.”
That certainly didn’t bother SBF at the time, but as he heads to prison and a new circle of acquaintances, the dethroned “King of Crypto” may be longing for the days when the world’s glamorous elite craved his approval as well as his money .