Sam Bankman-Fried and the Multibillion-Dollar Drama Over FTXs Ruins
3 minute readPublished: Friday, October 3, 2025 at 4:30 pm
BNN News Summary: The Rise and Fall of Sam Bankman-Fried and FTX
Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, is serving a 25-year prison sentence for orchestrating one of the largest financial crimes in history. His conviction stems from the collapse of FTX in late 2022, a dramatic downfall that erased billions of dollars in customer funds.
Before the collapse, SBF was a celebrated figure in the crypto world, appearing on magazine covers and attracting celebrity endorsements. FTX, founded in 2019, quickly became a major player, fueled by the surging popularity of cryptocurrencies. However, the empire crumbled after revelations that SBF's trading firm, Alameda Research, had borrowed heavily from FTX to cover speculative investments. Investors rushed to withdraw funds, and the exchange was unable to meet the demand.
The aftermath saw SBF arrested and found guilty of fraud and money laundering. The bankruptcy proceedings, overseen by John J. Ray III, a turnaround specialist, have been marked by controversy. The law firm Sullivan & Cromwell, which had a long-standing relationship with FTX, was appointed to manage the bankruptcy, a move that has drawn criticism due to potential conflicts of interest. The firm has billed nearly a quarter of a billion dollars in fees.
SBF and his parents, who are part of his legal team, are appealing his conviction, arguing that the true villain is Sullivan & Cromwell. They claim the firm played a role in his downfall and profited handsomely from the bankruptcy. SBF maintains his innocence, asserting that customer funds were available and that the collapse was due to a "bank run."
The bankruptcy process has been lengthy and complex, with creditors struggling to recover their assets. While most creditors are expected to be paid back in full for the value of their accounts in November 2022, plus interest, the costs of the bankruptcy are expected to exceed $1 billion.
BNN's Perspective: The FTX saga serves as a stark reminder of the risks associated with the unregulated cryptocurrency market. While the industry has matured since the collapse, the case highlights the importance of transparency, accountability, and robust regulatory oversight to protect investors and maintain the integrity of the financial system.
Keywords: Sam Bankman-Fried, FTX, cryptocurrency, fraud, bankruptcy, Alameda Research, Sullivan & Cromwell, John J. Ray III, crypto, investors, collapse, conviction, legal fees, creditors, regulation.