Sequence of Events Leading to FTX Founder Sam Bankman-Fried’s Conviction
The recent fraud conviction of FTX founder, Sam Bankman-Fried, represents the conclusion of a yearlong legal ordeal following the dramatic downfall of the cryptocurrency exchange he established. Below, we outline the significant milestones leading up to this verdict:
In this year, Sam Bankman-Fried, an alumnus of the Massachusetts Institute of Technology, departs from his position as a quantitative trader at Jane Street Capital to inaugurate Alameda Research, a trading firm specializing in cryptocurrency.
Bankman-Fried, along with former Google employee Gary Wang, founds FTX as a fresh platform for trading crypto tokens and derivatives.
FTX secures $420 million in venture funding, elevating the company’s valuation to $25 billion. Bankman-Fried makes his debut on Forbes’ list of billionaires, estimating his net worth at $22.5 billion. By year-end, the magazine would revise his wealth to $26 billion.
The NFL Super Bowl features an abundance of cryptocurrency advertisements, underscoring the peak of enthusiasm for this flourishing asset class. FTX’s “Don’t Miss Out” ad showcases actor Larry David, illustrating his skepticism about the platform, akin to an early human questioning the importance of the wheel.
Bankman-Fried emerges as the cryptocurrency sector’s designated “white knight” amidst a sharp decline in Bitcoin and other digital asset prices. Alameda extends a $200 million credit facility to crypto lender Voyager Digital, while FTX provides a $250 million loan to lender BlockFi.
NOV. 2, 2022
Crypto news outlet CoinDesk releases a leaked Alameda Research balance sheet, revealing that a substantial portion of its $14.6 billion in assets is held in FTX’s proprietary token, FTT. This revelation prompts a drop of approximately $400 million in FTT’s market capitalization, leading rival exchange Binance to announce its intention to divest its FTT holdings.
NOV. 8, 2022
In the wake of $6 billion in customer withdrawals from FTX within three days, Binance CEO Changpeng Zhao announces a nonbinding agreement to acquire FTX’s non-U.S. unit. However, Binance subsequently abandons the deal the following day.
NOV. 11, 2022
FTX files for bankruptcy protection in the U.S., with Bankman-Fried resigning as the CEO.
NOV. 16, 2022
Prominent FTX endorsers, including David and NFL quarterback Tom Brady, face a lawsuit alleging deceptive practices. The celebrities contend that they are not responsible for the losses suffered by FTX investors.
DEC. 12, 2022
Bankman-Fried is apprehended in the Bahamas, where he resides and where FTX is headquartered. The U.S. Attorney’s office in Manhattan subsequently confirms that a federal grand jury has indicted him on fraud and conspiracy charges.
DEC. 21, 2022
Bankman-Fried consents to extradition to the United States from the Bahamas. While in transit, prosecutors reveal that both Gary Wang and Alameda CEO Caroline Ellison have pleaded guilty and agreed to cooperate with authorities.
DEC. 22, 2022
Bankman-Fried makes his initial appearance in Manhattan federal court and is released to home detention at his parents’ residence in Palo Alto, California, on $250 million bond.
JAN. 3-12, 2023
Bankman-Fried pleads not guilty, and U.S. District Judge Lewis Kaplan schedules his trial for October. In a blog post following his arrest, Bankman-Fried refutes allegations of misappropriation and attributes FTX’s collapse to a broader downturn in the crypto markets.
FEB. 28, 2023
Former FTX director of engineering, Nishad Singh, adds to the mounting pressure on Bankman-Fried by becoming the third former member of his inner circle to plead guilty to fraud charges and agreeing to cooperate with prosecutors.
AUG. 11, 2023
Kaplan revokes Bankman-Fried’s bail after finding probable cause to believe he tampered with witnesses on at least two occasions, including sharing Ellison’s private writings with a New York Times reporter. Bankman-Fried is remanded to Brooklyn’s Metropolitan Detention Center pending trial.
OCT. 3, 2023
The trial commences in Manhattan federal court.
OCT. 28, 2023
Bankman-Fried takes the stand in his own defense, acknowledging that many were affected by FTX’s collapse, yet maintaining his innocence in defrauding customers or embezzling billions.
NOV. 2, 2023
Bankman-Fried is convicted on all seven charges brought against him.