FTX, WTF? Sam Bankman-Fried's crypto crimes

Kevin T. Dugan, Matt Stieb, THE MONEY GAME (NYMag.com, Intelligencer, 11/16/22); Sheldon S., Ashley Wells, CC Liu (eds.), Wisdom Quarterly

Awkward, on the spectrum, math genius Sam (Tom Williams/CQ-Roll Call, Inc/Getty Images)

.

8 more disturbing revelations about Sam Bankman-Fried

The first stage of any collapse is confusion, maybe even schadenfreude (German for "delight in another's misery").

A polycule of 10 live in sex partners for Sam

It was no different during the wild week when [the new oversexed Bernie Madoff] Sam Bankman-Fried (SBF), the supposed crypto wunderkind and founder of FTX, tried and failed to sell his imploding empire only to find himself totally broke, his companies bankrupt, and his sexual polycule (FTX circle all "dated" each other in the Bahamas crypto mansion) perhaps no longer in the mood. (Read about all that sex story here).

OMG! I could have lived like Sam did!!!

The stage after that, though, is fear — and that is precisely where we are now. The sum of Bankman-Fried may have added up to less than his parts, but that doesn’t change the fact that he was deeply interconnected with the worlds of politics and finance beyond the relatively small world of digital currencies.

Since his bankruptcy filing, the crypto empire Bankman-Fried presided over has been subject to even more embarrassing and damning revelations, and he is the target of multiple investigations.

It is still too early to say that he’s headed for prison: If the prior big financial crisis taught us anything, it’s not to be shocked when nobody gets arrested for obvious crimes — but that is certainly a strong possibility. Here’s what we’ve learned about SBF since Friday.

• LISTEN: Follow Cover Story: Seed Money a podcast about the secret life of a billionaire

FTX software had a very illegal-sounding back door for moving huge sums of money

Who can judge but a magistrate, so it’s not up to us to decide what’s against the law. But we’ve got eyes.

Over the weekend, it was revealed — first by Reuters — that a back door was written into the code at the FTX crypto exchange that allowed Bankman-Fried to move customer deposits from that platform to his (supposed completely separate) hedge fund, Alameda Research.

In essence, this was a way to keep quiet the alarm bells that would have started to ring if anyone else had been aware that he was moving this money. All told, Reuters reported that $1 billion was missing. More