In a story surely destined to become a film before the decade is out, one of the crypto industry’s most promising figureheads is currently on trial in New York for alleged fraud, after being arrested in the Bahamas last December. Samuel Benjamin Bankman-Fried, 31, is the founder and CEO of (now bankrupt) cryptocurrency exchange FTX and associated trading firm Alameda Research. This time last year, he was ranked the 41st richest American in the Forbes 400 and the 60th richest person in the world with a peak net worth of $26bn.

“Mr. Bankman-Fried became a symbol of the industry’s excesses,” write a team of

 reporters covering Bankman-Fried’s case in Manhattan. “At the height of its power and influence…, Mr. Bankman-Fried was widely hailed as a leader capable of bringing obscure crypto technology into the mainstream of global finance. He jetted back and forth from FTX’s base in the Bahamas to meetings in Los Angeles and Washington, where he rubbed shoulders with celebrities and politicians, and had his photograph plastered on billboards and magazine covers.” Since 2020 he donated heavily to US political parties, putting his money behind Democratic candidates, and promising to invest $1bn in the 2024 US presidential election.

. Today, he’s more likely to be asking his political friends for help.

Bankman-Fried was born on on the campus of Stanford University to professors at Stanford Law School. In 2014 he graduated MIT with a bachelor's degree in physics and a minor in mathematics. He founded cryptocurrency exchange and crypto hedge fund FTX in 2019. By July of 2021 it was the third-largest crypto exchange by volume, with over a million users.

When the crypto market took a downturn in May 2022, Alameda’s clients began asking for their money back. But Alameda was billions of dollars short of meeting its obligations. Alameda then used FTX customers’ moneyto cover the shortfall without telling them, the prosecution alleges.The company’s unravelling continued to gather speed after Binance CEO Changpeng Zhao tweeted in November 2022 that his firm would sell its holdings of FTX’s token, FTT, citing alleged mishandling of customer funds. The Securities and Exchange Commission and Commodity Futures Trading Commission then announced it was investigating FTX and Bankman-Fried's other holdings.

, Bankman-Fried had transferred at least $4 billion – including customer funds – from FTX to Alameda Research earlier in the year without disclosing the move to anyone in the company. As reported by the Wall Street Journal, FTX had leant its customers money to Alameda to meet debts. Bankman-Fried resigned and the FTX declared bankruptcy, with John J. Ray III brought in to replace the outgoing CEO. 

 that Aalmeda had lent $1bn toBankman-Fried personally. All in all, it’s a tangled web of finances and (probable) dodgy dealings.

Bankman-Fried was arrested by the Royal Bahamas Police Force on December 12 2022 after the Southern District of New York had charged Bankman-Fried with eight counts of "wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy. and money laundering”. Bankman-Fried was extradited to the US in December, with a $250m bond – the largest ever set in America. If convicted he faces 115 years in prison. He pleaded not guilty in January, with four additional charges stemming from making over 300 illegal political donations added in February.

accused Bankman-Fried and associates of transferring “at least” $40 million in cryptocurrency to Chinese government officials, in order to unfreeze Alameda’s accounts. In August, Bankman-Fried’s bail was revoked after the judge in the case believed there was reasonable cause to believe Bankman-Fried would attempt to tamper with witnesses. The same month, in a separate indictment, he was accused of using $100m of FTX customer funds in 2022 US election contributions.

The trial began on October 4th, with prosecutors alleging Bankman-Fried’s empire was built on lies.“It looked like Sam Bankman-Fried was on top of the world,” Thane Rehn, a lead prosecutor, told attendees at the trial inside the federal courthouse in Manhattan on Wednesday. “All of it was built on lies.” Bankman-Fried’s defence is taking the stance that he acted in good faith, full of the best intentions, and never had any intention to defraud anyone. According to the 

, the trial has become “the highest-profile reckoning for a business executive since the Theranos founder Elizabeth Holmes was convicted of fraud early last year.”

As well as countless email chains, prosecutors called on the testimony of Caroline Ellison, former CEO of Alameda Research. Ellison alleges that Bankman-Fried told her to illegally appropriate FTX customers’ money and lie about it. “This was kind of something I’d been dreading for so long … and I just, I felt a sense of relief that I didn’t have to lie anymore … that I could take responsibility,” Ellison said. She and Bankman-Fried had dated at one point, but had reportedly broken up by early 2022.

“[Bankman-Fried] said that he was a utilitarian and he believed that the ways that people try to justify rules like ‘don’t lie’ ‘don’t steal’, under utilitarianism didn’t work,” Ellison told the courtroom. She admitted to committing various crimes under Bankman-Fried’s bidding and said he repeatedly warned FTX employees about “not putting stuff in writing that could get us in trouble”, she said. The trial continues. The outcome if, of course, guesswork at this point. But what ever happens, the downfall of Sam Bankman-Fried surely marks the setting of the sun on the wild days of crypto.

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