BY BRADEN CARTWRIGHT
Daily Post Staff Writer
An entrepreneur who built one of the world’s top cryptocurrency companies and then saw it all come crashing down almost overnight was raised by two Stanford professors who specialize in law and taxes.
Sam Bankman-Fried, 30, a graduate of Crystal Springs Uplands School in Hillsborough, has gone from the cover of Forbes to bankruptcy in the past week.
His company, FTX, had a net worth of $32 billion and the backing of sports starts like Stephen Curry and Tom Brady.
But today, FTX is $8 billion in debt and sending shockwaves across the financial sector.
Bankman-Fried, who is one of the largest donors to the Democratic Party, is under investigation by the Securities and Exchange Commission.
The collapse of FTX started after Binance CEO Changpeng Zhao announced on Twitter that he was selling his major stake in the company on Nov. 9 in a move to disrupt his rival.
FTX, and the cryptocurrency created by Bankman-Fried, plummeted in value after the announcement. FTX didn’t have enough money available to pay people who were trying to take their money out.
FTX declared bankruptcy on Friday, and Bankman-Fried stepped down as CEO. He has been interviewed by police in Bahamas, where he lives and works in a penthouse with other FTX executives, the Wall Street Journal reported.
Bankman-Fried had a second company, Alameda Research, that used the FTX cryptocurrency to trade stocks. That company has also fallen apart.
“I f***ed up, and should have done better,” he said on Twitter last night.
Bankman-Fried, also known as “SBF,” was born at Stanford and raised on campus by his parents as a utilitarian.
Utilitarianism is a philosophy that says the morally right action is the action that produces the most good, though different utilitarians have different takes on it. The philosophy has been criticized for not emphasizing justice, as utilitarians weight the benefit of the majority over individual rights.
Bankman-Fried’s mother is Barbara Fried, a law professor at Stanford since 1987. Her resume says she teaches courses in federal income taxation, legal theory, tax policy, distributive justice and moral psychology.
Like her son, Fried is involved in Democratic Party politics. She is a major donor to a political action committee called Mind the Gap that supported Democratic candidates in 2018 and 2020, according to Open Secrets, a nonprofit that tracks political donations.
The father, Joseph Bankman has been a professor at Stanford Law School since 1988. He has written dozens of books and papers on topics like tax shelters, progressive taxation and wealth taxes.
“He has gained wide attention for his work on how government might control the use of tax shelters and has testified before Congress and other legislative bodies on tax compliance problems posed by the cash economy,” his biography says.
He also has a focus on using technology to simplify filing taxes, and he helped the State of California create a tax preparation program for low-income taxpayers.
Neither Fried nor Bankman returned requests for interviews.
A profile by the Menlo Park-based venture capital firm Sequoia Capital in September talked about Bankman-Fried’s upbringing on Stanford’s campus.
“His parents raised him and his siblings utilitarian — in the same way one might be brought up Unitarian — amid dinner-table debates about the greatest good for the greatest number,” the profile said.
Bankman-Fried would weigh arguments on issues like abortion through a utilitarian lens, the profile said.
Bankman-Fried graduated in 2010 from Crystal Springs Uplands School, a small and elite private school.
Bankman-Fried got good grades, especially in math, and he kept to himself, the profile said. He spent most of his free time playing computer games such as Starcraft and League of Legends.
Bankman-Fried went to college at MIT, then he worked in New York and Berkeley. He moved to Hong Kong and founded FTX in April 2019, Yahoo Finance reported.
Bankman-Fried was the second largest donor to President Biden’s 2020 campaign. He donated $5.2 million, second only to Michael Bloomberg’s $56 million donation.
For this year’s midterms, Bankman-Fried gave $27 million to a Democratic political action committee called Protect Our Future, according to Open Secrets.
And for 2024, Bankman-Fried said he would spend more than $1 billion, particularly if Donald Trump were to run.
“I would hate to say hard ceiling, because who knows what’s going to happen between now and then, but ($1 billion) at least sort of as a soft ceiling,” he told the “What’s Your Problem” podcast in May.
Bankman-Fried said he wasn’t particularly interested in cryptocurrency; he just wanted to make as much money as possible then give it away.
He said in an interview that he thinks about which causes and charities save the most lives per dollar, and then he gives money to them.
Bankman-Fried, a vegan, said he wants to focus his millions on global warming, Covid, tropical diseases and animal welfare.
Before the collapse of FTX, Bankman-Fried was written about as a prodigy, with glowing profiles in Forbes and the New York Times. He was known for wearing shorts and a t-shirt, and his company would “swoop in” to save troubled cryptocurrency firms with financial backing, Forbes reported.
At age 30, Bankman-Fried was number 41 on the Forbes list of richest people in the world with an estimated net worth of $24 billion, about half of which was tied up in FTX and its cryptocurrency.
Despite being just two years old, FTX had made a name for itself, boosted by an aggressive sports marketing strategy.
The Miami Heat play in the FTX Arena, and on Monday the Golden State Warriors gave out bobbleheads sponsored by FTX. Celebrities including Bill Clinton, Katy Perry and Shaquille O’Neal promoted the company.
Bankman-Fried lives in Nassau, where FTX is based. Not all of FTX’s trading features were available in the United States so the company didn’t have to follow as many regulations.
Seems like FTX was a ponzi scheme in which instead of using the stolen money for lavish living, it was used to feed the voracious appetite of the Democratic party for other peoples money.
Squidsie, this is about FTX not about politics. Don’t derail for your own purposes.
Second biggest Democratic contributor pledging at least a BILLION DOLLARS to the Democrats to defeat Trump isn’t about politics? You must be a typical Democrat in DENIAL, eh?
I realize that the political element is uncomfortable for you, but you should be grateful that most of the media is ignoring it. If a Republican was donating tens of millions in embezzled money to Republican politicians, it would be shrieked in the headlines.
Time for SBF, mom and pop go to the pokey. Liberal fools (I know – that’s redundant.)
This is all about politics. SBF generated hundreds of millions for the Democrats and the Democrats in the Biden administration failed to regulate his company. That allowed him to rip-off investors and give the Democrats even more money.
Robin, it is about politics, you idiot. Lib-lob democrats have a crap load of these crap holes. Self righteously ,jelly spined , America hating, do gooders who just are trying to make themselves rich, while steamrolling the working man
No friends when he was a kid… so sad. He dresses comfortably so he’ll be okay.
“Bankman-Fried said he wasn’t particularly interested in cryptocurrency; he just wanted to make as much money as possible then give it away” said no one, Ever.
This news came out the day after the midterm election, so does a $5.2M Biden donation buy you a Get out of Jail Card at the federal level? I’ll bet it does.
So now we know that the breeding-ground for faux-humanitarian’s Ivan bd found on the elite campuses of US colleges.
All the more reason for America to deemphasize the elite colleges and focus our efforts on improving tier 2 and below universities.
He’s a vegan. That explains his silly notions about stealing money so he can give it back to support his “woke” causes! Vegans develop a superiority complex and act as if carnivores are primitive knuckle-draggers. Hope they’re able to extradite him so he can be locked up here.
TYPO CORRECTED: So now we know that the breeding-ground for faux-humanitarian’s Ivan can be found on the elite campuses of US colleges.
All the more reason for America to deemphasize the elite colleges and focus our efforts on improving tier 2 and below universities.
thanks for info
His parents bought $121 million worth of real estate in the Bahamas, where he is hiding now. His mother a woke warrior for woke causes.
His parents have 1 deed (16 million) that they are trying to give back to FTX prior to the bankruptcy filing (reported that way) but the other millions were bought by FTX and associates related. He is “hiding” in the Bahamas, the same place that FTX had a HQ and where he has resided since mid 2021. Mid 2021 to now is 17 months… My guess is you got all your information from Tucker?