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The Margin: Who is Sam Bankman-Fried, the FTX ex-CEO who lost billions in crypto?


Sam Bankman-Fried, or SBF as he’s known, is in the news because of the liquidity crisis his FTX crypto exchange has faced and the billions of dollars he’s suddenly lost. The company said Friday that it filed for voluntary Chapter 11 bankruptcy and that Bankman-Fried has resigned as chief executive.

As the 30-year-old entrepreneur tweeted Thursday morning: “I f—ked up, and should have done better.”

Also see: The $26 billion rise and fall of FTX crypto king Sam Bankman-Fried

But who is the man behind the headlines? Here are some details to know…

He’s a California native who came of age in a scholarly environment

SBF was born and raised in the Golden State, according to a 2021 Yahoo! News profile. He grew up in an academic setting, with parents who were law professors at Stanford University. And that background seemed to affect his thinking. His mother, Barbara Fried, told Yahoo! that when her son started reading the philosopher Derek Parfit at age 14, he took Parfit to task. “Sam was mad at Parfit for being wrong, but madder at Parfit for the cheapness of his argument,” she said.

But he wasn’t into school

His mother said when he was in seventh or eighth grade, she noticed him crying one day over his school situation. “And he said to me, ‘Mom, I’m so bored I’m gonna die,’” she recalled. SBF has also mentioned the problems he faced in class, complaining of too much structure.

He did land at a top college

SBF went to MIT from 2010 to 2014, majoring in physics and minoring in math. But he still found the experience unfulfilling. “Nothing I learned in college ended up being useful other than, like, social development…On the academic side, though, it’s all f–king useless…School is just not helpful for most jobs…Everyone knows it’s true…Some people kind of don’t really want to say it’s true, but it just is,” he told Yahoo!

Eventually, he made his way into the financial world

During his time at MIT, he interned at Jane Street Capital, a prominent firm. And after college, he worked there full-time. But by 2017, he went on his own, starting Alameda Research, a trading company. Then, he founded FTX in 2019. His wealth grew exponentially in the process, reaching $26 billion at one point, according to reports.

What was one of his big, early trading moves?

SBF found a way to take advantage of the spread between American and Japanese bitcoin prices (the Japanese was lower). As New York Magazine explained, he “cobbled together a chain of intermediaries, including obscure banks in rural Japan, to take advantage of the monthlong price discrepancy. They moved up to $25 million a day.” SBF called it “the craziest trade I’ve ever seen.”

He has a lot of celebrity connections

FTX has had celebrities take equity stakes in the company and/or serve as its global ambassadors. Among them: football legend Tom Brady and his ex-wife model Gisele Bündchen, tennis star Naomi Osaka and basketball great Stephen Curry.

He’s tried to make his mark politically

SBF contributed more than $5 million to Joe Biden and groups supporting him during his 2020 presidential campaign. He said he was motivated by Biden’s “generic stability and decision-making process.” His charitable work fits into his belief in what’s called “effective altruism” — the idea of making lots of money so that it can be given away in the service of others.

He likes his Oreos

SBF is a vegan. “It’s all for animal welfare,” he told the CoinDesk website. And he has a soft spot for Oreo cookies, which he called “one of nature’s more surprising vegan foods.”

Key Words: ‘A lot of people have compared this to Lehman. I would compare it to Enron’: Larry Summers comments on FTX bankruptcy

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