The Curious Tale of Sam Bankman-Fried

by | Dec 17, 2022

It was not a particularly unusual day in March 1992 in Stanford, California. The weather was typical for the time of the year, overcast and mild with a slight breeze. No major news event was sweeping California, or the greater world for that matter.

As I said, nothing unusual, just a day, like any other. Or was it? 30 years later, there might just be a few people who’d disagree with this analysis. There are some, who might say that March 6th 1992 was in fact the day that lost them everything.

Sam Bankman-Fried was born on the campus of Stanford University on March 6th 1992.

Sam’s mother Barbara Fried co-founded Mind the Gap, a secretive, highly funded left wing super PAC that funnels millions of dollars from silicon valley to democrat candidates. 

His father, Joe Bankman is a lawyer and a leading scholar in the discipline of tax law. Interestingly In 2016, Joseph Bankman helped Democratic Senator Elizabeth Warren to draft a tax bill. This tax bill would contain some of the most draconian and far-reaching regulations we’ve ever seen proposed for cryptocurrency. Joe Bankman is considered one of the most anti-crypto Members of US congress.

Ok, so you get the picture. Wealthy, well-connected intellectuals living the ‘American Dream’,  two kids, family chit-chats on effective altruism, utilitarianism and objective morality with holidays to the Bahamas twice a year…bla,bla,bla.

Thou shall go to Epsilon Theta! 

To get a real picture of who SBF was growing up, think textbook nerd. 

Traditional school was a struggle for Sam because of his high-intellect. In an interview, his mother said she once found him crying, and he said to her, ‘Mom, I’m so bored I’m gonna die.’

So, they found some advanced maths classes. This later progressed to maths summer camps. Then finally high school was over and in 2010 he went to MIT, co-living in the group house known as Epsilon Theta

Imagine a fraternity where you just ‘replace all the alcohol with the nerdiest stuff you can imagine, party late into the night… playing elaborate board games or chess or “Starcraft” or “League of Legends” video games.’[source]

While clearly a smart young man, he was far from the smartest at Epsilon Theta. Others remark that his real strength was in his people skills, his charisma. According to those that knew him at Epsilon,  it was obvious that “he really meant the stuff he said”. This led him to become commander at Epsilon Theta.

SBF finished at MIT with a major in physics and a minor in math. 


Sam Bankman-Freid Identifies as…

…a proponent of effective altruism, a utilitarian-flavoured philanthropic social movement.  

If you’re unsure of what exactly this means, don’t worry. It turns out Sam was a little confused about it all as well, as we’ll soon see.

Sam was introduced to E.A (Effective Altruism) when he was introduced to one of E.A’s originators, Will MacAskill, as an undergraduate at MIT.

Sam was quickly recruited into the social movement as someone that was likely to make a lot of money.

Effective Altruism is a philosophical and social movement that advocates “using evidence and reason to figure out how to benefit others as much as possible, and taking action on that basis”.  While a very noble cause, I do take slight issue with these types of philanthropic organizations. Why?

We all want to do good in the world and secure a better future for our children. But who gets to decide what a better world is and how we should go about making it?

What is ‘good’ and the ‘right thing to do‘ is full of subjectivity. So while intent may be good(again, subjective), the results are often quite the opposite. 

Ever wondered how we end up with people like Bill Gates gallivanting around the world, leaving a trail of destruction behind them? This, is how. This belief that somehow an individual or group of individuals can decide what is best for all is how.

SBF had already begun to show signs of this major flaw in altruistic philanthropy. Like his mother, SBF funnelled millions into Joe Biden’s 2020 democratic presidential campaign. 

In the 2020 presidential campaign, SBF was the second largest donor to Democrats, contributing $5.1 million. In the recent mid-term elections, he donated more than $40 million for Democratic Party candidates, second only to George Soros!

Is that effective altruism? Joe Biden hasn’t exactly been a force for good since he took office. Going one step further, it is arguable whether donating to any political party is an act of altruism.

But anyway, we get ahead of ourselves…..

Alameda Research

After a couple years working on Wall Street and a short time working for the centre for effective altruism in 2017 , SBF pivoted his attention. Alameda was born.

SBF and his colleague Tara Mac Aulay co-founded Alameda Research as they left their positions at the Centre for Effective Altruism.

Contrary to what the name of this company suggests, this has nothing to do with research….at all. 

Alameda Research is quite simply a crypto trading firm. According to their own website (which is now offline) they:

‘manage over $100 million in digital assets and trade $600 million to $1.5 billion per day across thousands of products: all major coins and altcoins, as well as their derivatives.’ [source]

As the altruistic Sam Bankman-fried said in an interview with RealVisions Ash Bennington in May 2021, “If you named your company like We Do Cryptocurrency Bitcoin Arbitrage Multinational Stuff, no one’s going to give you a bank account. […] But everyone wants a Research Institute.”

Does anyone get the feeling Sam isn’t quite as Altruistic as he makes out?

Well, co-founder Tara Mac Aulay didn’t think so……

A Mutiny in the Ranks

Just a few months after Alameda’s inception, trouble was brewing. Alameda’s co-founder Tara Mac Aulay became concerned over “risk management and business ethics”.

In a recent multi-tweet Aulay went on to say:

“I am shocked, appalled, and frankly, angry. BTC was birthed from the trauma of 2008. Sam’s actions are a perversion of everything crypto stands for. My heart goes out to all of the victims whose trust was betrayed, savings lost, and livelihoods destroyed.” [source]

She and several other employees left Alameda in April 2018. She claims to have had no contact with Sam since that time.


Further down the rabbit hole….. 🐇

Meet Caroline Ellison. Caroline graduated from Stanford University in 2016 with a bachelor’s degree in mathematics. She met Sam at Jane Street Capital, where they both worked for a time. Sam would later tell Ellison of his business plans regarding Alameda over a coffee in Berkeley. Ellison was working for Alameda from the get go as a trader. 

A trader that doesn’t bother with ‘stop losses’ , but – a trader nevertheless! 😂

Be sure to check out this interview with Miss Ellison back in May, where she is asked about her role at Alameda. 

It’s hilarious, but also terrifying that she was responsible for anything more than… well, anything. Really, the interview left me speechless.

Glen Ellison is Caroline’s father and is the department head of Economics at MIT. A work colleague and friend of Glen’s is none other than [drum roll, please] Gary Gensler. 

Gary Gensler was nominated by President Biden to serve as Chair of the U.S. Securities and Exchange Commission (S.E.C) in February 2021.

Gensler has throughout the relatively short span of Alameda & FTX’s existence been in close contact with SBF. Yet, no concerns were raised?

It likely has nothing to do with the large donations made by SBF to the Democrats, or anything to do with his and his family’s entanglement with politics and elitist technocrats over the years…..

Sam Bankman-Fried with Tony Blair and Bill Clinton at an event in the Bahamas

Seriously, how does this happen? Only a few years ago, anyone involved in crypto was a drug dealing, tax evading fraudster. Now you can open exchanges in the Bahamas, with a wash trade company set-up in Hong Kong while employing a bunch of friends who can barely manage a 5-year olds piggy bank to manage billions of dollars.

Sam Bankman-Fried was all over the place, even showing up at the World Economic Forum in Davos back in May 2022.

The Ukraine Connection

A fair amount of controversy has been flying around in regards to the connection between FTX and the Ukrainian government. Exactly what the intentions were are unknown and much of the information circulating is speculation or politically biassed propaganda. But as they say, there’s no smoke without fire.

Here is what we do know. 

In March of 2022, Ukraine launched a new crypto donations website that streamlines their multimillion-dollar effort to turn bitcoin into bullets, bandages, and other wartime material.

Aid for Ukraine, had the backing of crypto exchange FTX, staking platform Everstake and Ukraine’s Kuna exchange, and routed all donated crypto to the National Bank of Ukraine. 

FTX was converting donations into fiat for deposit at the National Bank of Ukraine, a press release said.

A few days prior to the collapse of FTX he Aid for Ukraine webpage was deleted. The site encouraged visitors to “help Ukraine with crypto” and pleaded, “don’t leave us alone with the enemy.”.

That is all we really know about the ties between the Ukraine and FTX. Is there something more? MAGA fanatics will tell you it is some deep rooted conspiracy between the democrats, SBF and the Ukraine to overthrow Russia and destabilise the west. Democrats will tell you there is nothing to see here whatsoever. Likely the truth lies somewhere in the middle.


Now…. Let’s be fair.

OK, so I get it. These kids were the geeks, they were never the centre of attention in social circles at high-school. Just listening to SBF and Caroline briefly in interviews, you get this feeling that these guys are just very disconnected from normal society. Let’s face it, these weren’t the cool kids. SBF wasn’t getting the hotties at MIT, nor was Caroline Ellison the fraternity pinup girl at Stanford. 

Now, throw a few billion dollars in their hands and effectively make these guys the centre of attention in ANY environment and what do you get?

SBF went from the annoying smart ass kid who believed he had some higher sense of morality to hanging out with rockstars, actors and ex-presidents all the while having drug-fuelled orgies in his $70 million penthouse apartment in the Bahamas (or one of the other dozen or so properties FTX bought up in the Bahamas).

Can we blame him for getting a little carried away? 

Well, actually, yes we can, but I do understand how he screwed this up. Whether or not his intention began good and went sour, I don’t really care. Right now at age 31, Sam Bankman-Fried is little more than a dirty little thief. 

Greed and power won the day. He literally went from effective altruism to ‘fuck everyone’

In an interview with VOX, SBF claimed the altruistic, moralistic persona he portrayed was just a front.

  • Kelsey Piper: so the ethics stuff – mostly a front? people will like you if you win and hate you if you lose and that’s how it all really works?
  • Sam Bankman-Fried: yeah
  • SBF: I mean, that’s not *all* of it
  • SBF: but it’s a lot
  • KP: you were really good at talking about ethics, for someone who kind of saw it all as a game with winners and losers
  • SBF: ya
  • SBF: hehe
  • SBF: I had to be
  • SBF: it’s what reputations are made of, to some extent
  • SBF: I feel bad for those who get f***** by it
  • SBF: by this dumb game we woke westerners play where we say all the right shiboleths [sic] and so everyone likes us

I don’t believe it was a front, not from the beginning at least. I think SBF began as he appeared. An awkward, slightly autistic, intelligent, socially retarded rich kid who genuinely believed he could make the world a better place. 

This pretence he is now playing, that this was all a front, is just to protect his own pride and ego. Money and power beat him. It twisted his morals to shit. He failed. But rather than admit this, he’d rather just pretend he was just a dirty rotten scoundrel from the beginning. 

Family Business

It’s unlikely SBF organized this little empire all on his own though. After all, his father is a top law professor speaking in congress and rubbing shoulders with billionaires, and his mother funnels millions of dollars into politics. 

At the very least, was Daddy not keeping an eye on his son? Joe Bankman is one of the best Law professors in the US. He knows economic law inside out. You’d think maybe he might keep a careful eye on his son’s sudden rise to fame and glory. ‘Hey son, you want me to check over the books for you’, or ‘Want a hand structuring your new multi-billion dollar crypto-exchange?’, you’d think at some point the parents would have got involved, either to help sort his mess out, or to jump on the gravy train and suck a few million out for themselves…… oh, which they did by the way.

Joseph Bankman and Barbara Fried are listed as the owners of a $16.4 million home in the Bahamas.

And yet, in an interview SBF said:

“I know it was not intended to be their long-term property. It was intended to be the company’s property. I don’t know how that was papered in.”

Credit: Albany Bahamas

Check out the structuring of SBFs little venture:

How involved were SBFs parents, specifically his father? I don’t know.

Was the SEC turning a blind eye because of the Chair of the U.S. Securities and Exchange Commission Gary Genslers friendship with the family? Again, I don’t know.

But what we do know is, the whole house of cards came crashing down.

End of the Empire

In August 2022, the Federal Deposit Insurance Corporation issued a cease-and-desist order to FTX for making “false and misleading representations” about deposits being covered by FDIC insurance. 

Following the regulatory action, FTX president Brett Harrison deleted the tweet and Bankman-Fried clarified in a subsequent tweet that FTX deposits are not insured by the FDIC.

In late October it came to light that FTX was under investigation by Texas regulators for selling unregistered securities.

On November 2nd Coindesk published an article stating that Alameda Research, held a significant amount of FTX’s exchange token, FTT. This began to raise questions about just how separate these two companies were. 

Soon after these revelations, Binance announced they would dump all their FTT holdings, which began the quick collapse of FTX.

FTX exchange users found themselves locked out and unable to withdraw funds. It is estimated that around $1 billion of investors money has vanished. But of course, mysteriously ‘some’ people did manage to withdraw their funds.

Just hours before the collapse truly set in at FTX thousands of withdrawals were enabled, but only for bahamians. 

“I gave [the Bahamian government] a one-day heads up that we were going to do it. They didn’t say, yes or no. They didn’t respond, and then we did it. 

The reason I did it was it was critical to the exchange being able to have a future,” Bankman-Fried said.

Critical for the future of the exchange to be able to operate in the Bahamas, well maybe…

Or was it a way the team and others in the local community who were somehow connected to the FTX empire syphon as much money as they could before it was all over?


SBF Arrested in the Bahamas

After a few weeks of SBF bumbling around twitter and even appearing at a New York Times organized event alongside Mark Zuckerberg, US Treasury’s Janet Yellen, Ukrainian President Zelensky(I kid you not) and Ben Affleck (I have no idea…), finally SBF was arrested in the Bahamas.

SBF has been denied bail and is up against multiple charges of fraud in what is now being duped “one of the biggest financial frauds in American History”.

He will be held in the Bahamas only jail, Fox Hill detention facility which has been rated as ‘not fit for humanity’ by reporters in the past. Though reports are stating he is being held at the medical facility in Fox Hill, not the jail cells. 

The US wants to extradite SBF and I think he’ll go willingly before too long.

The question is, what the hell just happened?

As the collapse was unfolding and even once it was confirmed the moneys all gone, the media still seemed to hail him as the golden boy of crypto. As I said earlier, he was invited to speak alongside Janet Yellan and Mark Zuckerberg just a week or so before his arrest. 

It seemed nothing would happen, and then – bam, they arrested him.

There are two reasonable explanations:

  1. US Prosecutors were laying low due to flight risk associated with someone like SBF.
  2. US Prosecutors were playing down the severity of his crimes to prevent SBF blowing his mouth off about things they’d rather he didn’t make public. 

It is probably a combination of both.

You can be sure SBF is in now way the most guilty party involved in this whole event. Guilty, sure – but has he been used and taken advantage of by forces far beyond his understanding – most definitely. 

I don’t think he’ll rot in prison, I think by the time this goes to trial and the final verdict is given, everyone will have forgotten about Alameda, FTX and SBF. I think he’ll get convicted of multiple cases of fraud, but ultimately will end up free and rich. 

You gotta love Altruism!

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