Sam Bankman-Fried Net Worth: The Rise and Fall of FTX Founder

Sam Bankman Fried Biography

Early Life and Education of Sam Bankman-Fried

Sam Bankman-Fried was born in Stanford California in 1992. Both of his parents, Barbara Fried and Joseph Bankman were professors at Stanford Law School while his aunt Linda Fried was a dean of Columbia University Mailman School of Public Health.

Coming from a family of scholars and professors, Sam Bankman completed his schooling at Crystal Springs Uplands School in California. And, he graduated from Massachusetts Institute of Technology with a degree in Physics and a minor in Mathematics.

Career: The Journey To Becoming the Founder of FTX

Sam began his career as an intern at Jane Street Capital before graduating and went there again to work full time after his graduation. After working a few years, Sam moved to Berkeley, California and worked as a director of development at the CEA (Centre for Effective Altruism).

Combined with Tara Hedley, Sam Bankman-Fried co-founded trading company Alameda Research after receiving funds from billionaire computer programmers in 2017. Sam owned around 90% of the company and organized arbitrage trade to take advantage of the price difference of Bitcoin in 2018.

Having several years of experience with trading company Alameda Research and considerable knowledge of cryptocurrencies, Sam started FTX crypto derivatives exchange in 2019. He built the exchange into one of the largest platforms to trade cryptocurrencies and was included in the list of “Forbes 30 Under 30” in 2021.

The Downfall and Bankruptcy of FTX: Here’s What Happened

It all started when former Binance CEO Changpeng Zhao announced on X that he was going to sell his FTT holdings with some other strong statements on November 7, 2022. He justified his move saying that it came from learning of the Terra Luna crash. When he said that they don’t support people who lobby against other industry players, renouncing FTT holdings, it made a huge impact on FTX and Sam Bankman Fried.

The post was actually a result of a reputed crypto publication, CoinDesk’s article. It stated that the bulk of Alameda holdings were in the form of FTT. The FTT token sale by Binance made a dent on its price, impacting its low trading volume. Zhao didn’t stop there and continued to announce publicly that he was going to complete due diligence and cautioned all exchanges to stop using tokens as collateral.

Couple of days after Zhao’s first tweet, the Securities and Exchanges Commission and Commodity Futures Trading Commission started investigating FTX and Sam’s holdings. As a result, the price of FTT went from over $22 to less than $2 in a week’s time. The Domino’s effect continued to spread, which further led to the bankruptcy of FTX and Alameda Research, combined with other related entities on November 11, 2022.

By the time the downfall of FTX became clear, Sam Bankman-Fried tried to raise funds to rescue FTX. The next day, billions of dollars went missing from FTX customer funds. FTX announced that it was investigating unauthorized transactions which caused a large amount of funds to move out of FTX crypto wallets.

Arrest and Indictment of Sam Bankman-Fried

Sam Bankman-Fried was arrested on December 12, 2022 in his apartment in the Bahamas. He was accused of multiple conspiracies and fraud charges and was called “one of the biggest financial frauds” in American history. Even though the co-founder of FTX, Gary Wang and CEO of Alameda Research, Caroline Ellison pleaded guilty, Sam continued to confirm that he didn’t willingly commit any fraud. 

Sam was released on December 22, 2022 on a record of $250 million bond. After multiple trials and examination of facts, A New York Jury found Sam Bankman-Fried guilty and was convicted of seven types of fraud and stealing around $10 billion from his customers. Based on the convictions, sentencing of Sam Bankman-Fried will start from March 28, 2024 and he could spend several decades in prison.

Forbes listed Sam Bankman-Fried in its “Hall of Shame” article, published in November 2023. It listed 10 popular figures, calling them the most dubious people to make the Forbes 30 Under 30 list. 

Sam Bankman Fried Net Worth

At the peak of his career, Sam Bankman-Fried had a net worth of over $26.5 billion. Even before the collapse of FTX, his net worth fell to $16 billion in 2022. Being the co-founder and CEO of FTX crypto exchange, most of his wealth came from the exchange’s native token FTT holdings.

After the exchange collapsed and Sam was accused of fraud, his wealth was $100,000 in a bank account, as per a New York Times column. However, the net worth of Sam Bankman-Fried is currently $0, as of February 2024, according to Forbes.

Sam Bankman-Fried Personal Life

Sam Bankman Fried was born and brought up in a Jewish family. Caroline Ellison, who served as a CEO of Alameda Research, was in a romantic relationship with Sam until April 2022. When things went south for FTX and Sam, Caroline testified against him in court in October 2023 and even revealed some of his tactics to portray a false image of himself.

No matter the news articles by the media, Sam Bankman -Fried’s parents stood by him in tough times. Sam Bankman Fried’s younger brother Gabriel Bankman also had to face charges along with his parents by the new owners of FTX.

While his parents agreed that they received assets and gifts, they denied wrongdoings of Sam. His mother Barbara wrote in a letter to The New Yorker saying that Sam was innocent and the prosecution is a relentless pursuit of total destruction.