For several years, Sam Bankman-Fried cut the figure of an unstoppable tech founder. With his trademark uniform of a T-shirt and shorts, and a mop of dark curls, Bankman-Fried courted investors big and small with promises that FTX, the cryptocurrency exchange he founded, was safer than all its competitors. He vowed there was an insurance fund to protect investors. He claimed there was a safeguard preventing accounts from margin trading if they lacked sufficient liquidity.
All the while, Bankman-Fried curried favor with politicians and celebrities. He called for greater regulation of crypto currency, telling the Economic Club of New York, “America should provide oversight rather than sitting on the sideline.” Bankman-Fried, according to Insider, also said US authorities should “be able to strike a balance between fostering economic growth and providing consumer protection and protecting against systemic risk and financial crimes”. The bravado paid financial and social dividends: Bankman-Fried became a billionaire by 30 and rubbed elbows with dignitaries such as Bill Clinton. FTX was valued at $32bn.
