FTX, a failed cryptocurrency exchange, declared bankruptcy slightly over a year ago in November 2022, unraveling a series of sensational stories about the company’s operations.
The downfall uncovered CEO Sam Bankman-Fried’s covert diversion of customer funds to support Alameda Research, a related firm, leading to his conviction on seven counts of fraud and conspiracy in a Manhattan trial. He now faces a potential 110-year prison sentence.
Once celebrated and a former billionaire in the crypto industry, Bankman-Fried boasted connections across entertainment circles, mingling with luminaries like Anna Wintour, Tom Brady, Gisele Bündchen, and Larry David. He championed the concept of effective altruism, claiming he donated as much of his wealth as feasible to charitable causes.
However, revelations following FTX’s collapse painted a picture of Bankman-Fried’s opulent lifestyle alongside his FTX cohorts:
- Bankman-Fried resided in a luxurious $35 million Bahamas penthouse, “Orchid,” FTX’s headquarters, with his close associates. The 12,000-square-foot property boasted breathtaking ocean views, a private spa, and an outdoor pool. The group indulged in board games like Galaxy Trucker, Wingspan, and Chess.
- The inner circle, labeled as a gang of young adults in the Bahamas, intermingled romantically, including Bankman-Fried and Alameda Research CEO Caroline Ellison. Despite attempts to conceal their relationship, their involvement became known.
- Bankman-Fried splurged thousands of dollars daily on company lunches at Cocoplum, a nearby restaurant. Regular lunch expenses amounted to a whopping $10,000, often accommodating guests alongside FTX staff.
- FTX enlisted psychologist Dr. George Lerner, who doubled as a career coach and counselor, providing drugs like Xanax or Adderall. He overly involved himself in the dating lives of the young staff, attempting to ensure a better social experience for them in the Bahamas.
- FTX spent $1 million replacing a disputed door in its Hong Kong office due to Feng Shui beliefs, following an argument among employees.
- Before declaring bankruptcy, FTX adviser Kumanan Ramanathan safeguarded $500 million of crypto in a USB stick to thwart hackers. However, despite his efforts, about $415 million worth of crypto was still stolen.
- Employees at Alameda Research realized FTX’s bankruptcy when a company card was declined while attempting to order dinner, marking the shocking moment of the company’s financial collapse.
