scholarship

Samuel Bankman-Fried, the ousted CEO of FTX, the person not value $16 billion anymore

Samuel Bankman-Fried, July 2022.

Samuel Bankman-Fried, nicknamed “SBF” by his fans, is a pure product of the American elite. He was born in 1992 as the son of law professors at the renowned Stanford University and studied physics and mathematics at the Massachusetts Institute of Technology (MIT).

Within MIT, he notably joined a fraternity called Epsilon Theta. Around 30 students live here in a large house off campus, but the atmosphere is far removed from the usual image of American fraternities: there is no alcohol here, but sophisticated board games, logic competitions and video games.

It was also around this time that SBF discovered the philosophy of “effective altruism”, which would give new meaning to the life of the young student, who until then wanted to be a teacher. This school of thought, which emerged in the late 2000s, aims to rationally maximize the positive impact we can have on the world.

Also read: Article reserved for our subscribers FTX, the bankruptcy rocking cryptocurrencies

Among other things, this philosophy promotes the so-called “earning to give” approach: followers are encouraged to choose high-paying careers and then donate a large part of their wealth to charity. At the end of his studies, SBF joined Jane Street Capital in 2013 as a trader.

Neglected style and used cars

After breaking through in the traditional finance industry, he decided in 2017 to start his own company, Alameda Research, specializing in trading high-risk cryptocurrencies. He will make his first million dollars by exchanging bitcoins between Japan and the United States.

Building on its early successes, SBF continued its momentum and in 2019 founded a new company of which he became CEO: FTX, for “Future Exchange”, is a cryptocurrency exchange based on the same model as Binance and Kraken.

FTX comes at the right time. In fact, the price of cryptocurrencies is skyrocketing during the 2020 restrictions, benefiting the entire industry but especially the newcomers. In 2021, Mr. Bankman-Fried’s success seems undeniable. He moved his exchange’s headquarters to the Bahamas, where he lived in a huge penthouse with a dozen former employees of Jane Street Capital or MIT acquaintances who had become key executives at FTX and Alameda Research.

Also read: Article reserved for our subscribers FTX Bankruptcy: “Effective Altruists Today Feel Betrayed By One Of Their Own”

Among them is Caroline Ellison, CEO of Alameda and former girlfriend of Mr. Bankman-Fried. Fueled by the excitement, FTX is catapulted into the top 3 major cryptocurrency exchanges in the world and the young MIT graduate becomes a multi-billionaire in a matter of months.

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