Home The Cointelegraph Top 100 2023 Sam Bankman-Fried and Caroline Ellison

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Sam Bankman-Fried and Caroline Ellison

Former CEOs of FTX and Alameda Research

The fastest $10 billion rug pull

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“I think I got a little cocky — I mean, more than a little bit.” — Sam Bankman-Fried

“I am truly sorry for what I did. I knew that it was wrong.” — Caroline Ellison

Biography: 

Sam Bankman-Fried, commonly known as SBF, is an American entrepreneur, investor and former billionaire who co-founded cryptocurrency exchange FTX, hedge fund Alameda Research and hundreds of other companies under FTX Group. In less than four years, SBF built a crypto empire alongside Caroline Ellison, his eventual “rumored girlfriend” and head of Alameda Research.

SBF’s ascent is truly remarkable — after completing a physics degree at Massachusetts Institute of Technology in 2014, he spent three years as a trader at Jane Street Capital where he mentored Boston native and recent Stanford graduate Caroline Ellison, whom he pitched to join his new venture Alameda Research in 2017. She would join the firm the following year as a trader before being promoted to co-CEO alongside Sam Trabucco in October 2021. By August 2022, Ellison was the sole CEO of Alameda.

At his peak, SBF was worth over $26 billion and was one of the most recognizable faces in crypto. He carried significant clout in business and politics and was a leading donor for both Democratic and Republican parties during the 2022 midterm election cycle. Ellison kept a lower profile during FTX’s ascent but played a key role in Alameda’s growth — and its eventual demise. She would also play a major role in implicating SBF and the entire FTX executive team following the collapse of the exchange. 

Bankman-Fried and Ellison’s 2022:

2022 was a year of stark contrasts for SBF and Ellison. At the start of the year, investors valued FTX and FTX US at a combined $40 billion as Alameda was seemingly flush with capital, leading high-profile venture capital raises. But the bear market spares no one. In the case of SBF and Ellison, it exposed a multiyear fraud that came to a head in November when it was reported that Alameda owed FTX $10 billion. It eventually came to light that FTX had lent Alameda the funds using customer deposits.

When Binance CEO Changpeng Zhao got a whiff of Alameda’s books — and the massive holdings of FTX Token therein — he unloaded his exchange’s position in FTT. The very public sell-off triggered a run on FTX, which eventually snowballed into a liquidity crisis that led to the combined bankruptcies of FTX, FTX US, Alameda and the rest of SBF’s empire.

The aftermath of FTX’s collapse triggered the demise of crypto lenders BlockFi and Genesis, among others. Authorities zeroed in on SBF and Ellison for allegedly conspiring to steal billions of dollars from FTX customers. In December, Ellison pleaded guilty to wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. In doing so, she avoided a 110-year prison sentence.

SBF, on the other hand, had a brief stint in a Bahamian prison in December before being extradited to the United States. He would later post a $250-million bail that was collateralized by his parents’ home in Palo Alto, California. He will remain under house arrest at his parents’ house until his trial. He faces eight criminal charges, including conspiracy to commit wire fraud and money laundering, which could land him up to 115 years in prison.

Bankman-Fried’s and Ellison’s 2023:

Bankman-Fried kicked off 2023 by entering a not-guilty plea for all accounts, setting the stage for a four-week trial in October. If convicted, he could spend the rest of his life in prison. The prosecution’s case against SBF is based on allegations that he used FTX customer deposits to fund investments through Alameda Research. SBF maintains that he “wasn’t trying to commingle funds.” Ellison is out of jail after posting a $250,000 bond and surrendering her travel documents. She will still be required to pay restitution determined by the U.S. Southern District of New York. If she fully cooperates with the U.S. Attorney’s office, the only charges she will face are criminal tax violations. 

One of the biggest stories of 2022, the legal drama surrounding SBF will, unfortunately, continue to make headlines in 2023. In the meantime, FTX’s creditors — which include airlines, charities, technology firms and millions of customers — will await the outcome of the bankruptcy proceedings.