Saturday, June 3, 2023

From luxury mansion to prison full of rats, the fall of the young king of crypto

A 27-kilometer journey separates Fox Hill Prison from the Special Residential Complex in Albany, roughly at the two ends of New Providence, the most populous island in the Bahamas. There is a world of distance between the two places. The young fallen king of cryptocurrency, Sam Bankman-Fried, has moved from the luxury mansion where he lived a life of excess, drugs and polyamory with other friends and FTX executives – at the cost of defrauded customers and investors’ money – to a sinister Status quo.

The Bahamas’ only prison suffers from “overcrowding, poor nutrition, inadequate sanitation and inadequate medical care,” with “cells infested with rats, vermin and insects,” according to the latest State Department report on the country. The judge denied Bankman-Fried bail and she will have to wait until she is extradited to the United States, where prosecutors have charged her with eight crimes that carry a maximum prison term of 115 years.

Fox Hill Prison in Nassau (Bahamas).Maria Alejandra Cardona (Reuters)

His parents, law professors at Stanford, came to the hearing and said goodbye to him. Bankman-Fried also reportedly said goodbye to a life financed with $8,000 million extorted from customers of the FTX cryptocurrency exchange. Bankman-Fried and other executives used the millions to buy luxury homes in the Bahamas for themselves and their employees. The founder of the firm lived in a large mansion with other twenty-something friends and at the same time executives of the group. His parents enjoyed another home on the island, also paid for by the company, which bought dozens of homes for its employees.

He did not deprive himself of anything. financial Times published that after the company moved its headquarters from Hong Kong to the Bahamas last year, employees found that Amazon deliveries did not arrive there. He contracted a private air transport service to get the shipment to Miami and from there to the island.

common life

Bankman-Fried, 30, not only misled investors, lenders and customers. He also sold himself a false image of a fanatic (who drove a Toyota Corolla and wore T-shirts and shorts) and a philanthropist who only wanted to make money to give to good causes. When talking about his $30 million luxury mansion, he referred to it as “an apartment” for four people, which was converted into one for ten. “It’s good, even though we’re overcrowded,” he said in an interview with CNBC three months ago, when he was still boasting of the legacy he was going to leave the world with his generosity. Meals, massages and expenses were paid for by the company at venues in the area. The boundaries between work and personal life were blurring.

for the other nine rooms He met them at the Massachusetts Institute of Technology (where he studied physics) or at the investment firm Jane Street, where he began his professional career and learned the methods of quantitative investing. Among the group living in the mansion were FTX’s other two founders, Gary Wang (head of technology) and Nishad Singh (director of engineering), as well as Caroline Ellison, manager of Alameda Research, the bankman’s private crypto firm. – Freud, who played a key role in the hoax.

Ellison, 28, has been the most stable Bankman-Fried couple, but according to the exclusive publication coin desk, The same one who revealed the news that led to the collapse of the group, “The ten are, or used to be, in romantic relationships with each other.” They practiced polyandry, a consensual form of polygamy in which couples seek multiple romantic or sexual relationships, or, according to University of Washington professor Rikki Thompson, live more than one. police (a word made up of polyamory and molecule), a network of interconnected romantic relationships. wall street journal He also published that romantic relationships were common among members of the upper echelons of the FTX.

Caroline Ellison herself wrote a message on the social network Tumblr in which she mentioned her experience: “When I started my first Politics [amor]I thought of it as a radical break with my past. But to be honest, I’ve come to the conclusion that the only acceptable style Politics It is best characterized as an ‘Imperial Chinese harem’…None of this non-hierarchical nonsense. Everyone should have a ranking of their partners, people should know where they rank and there should be a power struggle over rankings.”

Bankman-Fried In a recent interview, when he was asked about this, he got angry. After the first information about it was published: “In my humble opinion, as a society we have already spent enough time this week trying to find out whether anyone living in Albany practices polyamory,” he responded to. The founder of FTX claims that he was no longer romantically involved with Ellison. Specific publications maintain that she has been seen in New York and speculate that she is in talks to cooperate with authorities in the investigation against Bankman-Fried.


Stimulants, antidepressants, and other drugs were also part of the regular regimen at the Albany mansion. “There’s nothing like regular amphetamines to appreciate just how silly the normal, non-human experience is,” Ellison tweeted last year. “Stimulants when you wake up, sleeping pills if you need sleep,” Bankman-Fried tweeted in an interview in 2019. podcast He said in 2020 that “probably half of people or more should be taking some sort of drug, because they make your life so much better.”

He particularly praised nootropics, or brain-enhancing drugs, that could be “life-changing.” In a recent interview at a forum of new York Times He claimed that he never saw illegal drugs being used in the office or at parties in his mansion. He then mentioned that they were more like diners, there were no wild parties and they rarely drank alcohol. “When we had parties we played board games,” he said.

Bankman-Fried says he was taking drugs that were prescribed for him to concentrate. At the parole hearing, at first he claimed his drug had been taken back into custody. When he said he would have to take off his shirt to wear it, the judge asked him to come out. The founder of FTX uses the Ensam patch, which is a powerful antidepressant.

Deception Mountain had a large packaging. Prior to the group’s collapse, Bankman-Fried spent $135 million sponsoring the NBA team, the Miami Heat. He also signed celebrities such as supermodel Gisele Bündchen, her ex-husband Tom Brady, the best American football player in history or basketball star Stephen Curry. He placed an ad in the Superbowl. He also made multimillion-dollar donations to the Democratic and Republican parties, which prosecutors consider illegal because they were financed with funds from the platform’s clients.

Bankman-Fried’s wealth reached more than $25 billion—on paper—when FTX was worth more than Deutsche Bank. He obtained hundreds of millions of dollars in “loans” from the company, again with funds from customers. Now he says he has about $100,000 left in the bank. He also has a debt of millions of dollars of the company.

a successful start

Bankman-Fried was a brilliant student. Born in 1992 on the campus of Stanford University, where his parents practiced, he showed his ability for mathematics as a teenager. He had a rough time in high school and then went to MIT, where he fit in with a fraternity that had more gaming than drinking and met Wang, by then an expert in cryptocurrency. He did an internship at investment firm Jane Street Capital and joined after graduation. He was good at it. There he met Caroline Ellison.

By then he had started showing an interest in philanthropy and stated that it was more effective to become rich and donate his fortune to charity, rather than working for a center to help others. After three years, he left Zen Capital and founded with Wang, a technology expert who had by then started working at Google, his own investment firm specializing in cryptocurrency, Alameda Research, Delaware. Is domiciled in, but is located in, Berkeley, California. ,

The idea was simple and it worked well: it was about arbitrage, taking advantage of the difference in prices between markets. Bitcoin was trading much higher in South Korea and Japan than in the United States. If he was able to overcome the regulatory hurdles and liquidity problems of an underdeveloped market such as crypto assets, he could buy cryptocurrencies in the United States and sell them in Asia for up to 30% more. easy money.

Almeida was successful. The next step seemed natural: to facilitate a liquid and relatively organized market by creating a cryptocurrency trading platform that would facilitate access to cryptocurrencies for investors large and small. He took a dip in 2019. He established the market in Hong Kong, which had more favorable regulation. It was a really good idea, the market worked reasonably well, it was well designed and it was a commercial success, although it already had shortcomings in its risk control systems and internal operations (internal Disbursements were authorized with emoticons in chat).

However, from the beginning it was a fraud, as the guarantees and conditions imposed on all other clients were not necessary for Bankman-Fried’s firm Almeida, something it hid from investors and depositors. Furthermore, FTX customers’ funds were diverted to Alameda, which took them along with the loan, but without the actual guarantee. FTX’s funds, led by Bankman-Fried, and Almeida, led by Ellison, were mixed.

While the market went from strength to strength and Almeida continued to earn from his investments, Bankman-Fried was able to fool everyone. With the cryptocurrency crisis, he took off further until Keck was discovered: he had diverted 8,000 million customers into his own funds. The crypto hero was a villain, according to the allegations leveled against him. If he is convicted, a long time behind bars awaits him.

morning country

Wake up with analysis of the day by Bernd Gonzalez Harbor

get it

Subscribe to continue reading

read without limits

Times of National
Times of National
Times of National To give more information about the latest happenings, news related to happenings in the country and abroad a casual understanding of the latest technology products and gadgets, celebrity news and gossip, latest movie news, sports, and cricket scores all you need Always ready to fulfill whatever else is becoming a part of our life nowadays.
Latest news
Related news


Please enter your comment!
Please enter your name here