Until this week, the 30-year-old American was considered a digital asset darling who amassed billions in personal wealth by running one of the world’s largest crypto platforms. But as traders rushed to pull funds out of FTX, Bankman-Fried balked and told investors he was confident the business would be saved, according to a source familiar with the situation. By Friday, FTX had filed for bankruptcy. He apologized, repeatedly. “Nobody was saying anything was wrong with SBF,” said Marius Ciubotariu, co-founder of Hubble Protocol, a decentralized lending platform. The company’s collapse surprised markets because Bankman-Fried was seen as a founder with business savvy and a knack for making deals, he said. Known in financial circles by his initials, SBF, Bankman-Fried had become a prominent and unconventional figure in the industry. He wore his signature wild hair, T-shirts and shorts to panel appearances with politicians such as former US President Bill Clinton and former British Prime Minister Tony Blair, as well as supermodel Gisele Bundchen. Bankman-Fried also quickly became one of the largest Democratic donors in the United States, contributing $5.2 million to President Joe Biden’s 2020 campaign. The crypto wunderkind began his career at Jane Street Capital, a choice he said was influenced by his desire to make money to pursue his interest in effective altruism, a movement that encourages people to prioritize giving to charities . He amassed a fortune, estimated at $26.5 billion by Forbes a year ago, by exploiting the price differences in bitcoin in Asia and the United States. Bankman-Fried eventually launched crypto trading firm Alameda Research in 2017 and founded FTX a year later. Its value in January was $32 billion. FTX’s collapse sent bitcoin to a two-year low this week, amid concern that the company’s woes will spread to other crypto firms. Workers were blindsided by its collapse, with some sending apologetic notes to customers expressing shock at what had happened, according to a person familiar with the matter. FTX appointed John J. Ray III, a restructuring expert, as CEO on Friday. He oversaw the winding-up of Enron, the energy trading giant that collapsed in scandal and bankruptcy in 2001. “A lot of people have compared it to Lehman – I would compare it to Enron,” former Treasury Secretary Larry Summers said in an interview on Bloomberg TV. For all its recent celebrity endorsements, fame and big-name endorsements, Bankman-Fried wasn’t sure about FTX’s prospects in its early days. “I thought we were going to fail,” Bankman-Fried told a conference in June weeks before FTX and Alameda extended lifelines to two struggling crypto platforms. “I thought we would fail because no one would ever use it.” Reporting by Hannah Lang in Washington. additional reporting by Anirban Sen in New York. Editing by Lananh Nguyen and Stephen Coates Our Standards: The Thomson Reuters Trust Principles.
