Who is SBF?

Happy Sunday. We’ve reached a point in the bear market at which all we can think about is the movie this is going to inspire. A 30-year-old vegan former billionaire who sleeps in a beanbag, drives a Toyota Corolla, plays League of Legends on investor calls, and *takes breath* could really use a haircut gained the trust of millions of people—and subsequently tanked an entire multi-billion-dollar industry. You can’t make this stuff up.

Today: A deep-dive into Sam Bankman-Fried (SBF), the man who duped all of crypto.

—Angelina

Who Is Sam Bankman-Fried?

Just a few weeks ago, SBF was crypto’s poster child. Hailed as the next J.P. Morgan, SBF’s standing as the philanthropic CEO of one of the world’s most renowned crypto exchanges couldn’t have been better.

But his downfall was swift—and the culmination of years of going left when the rest of the world went right…for better or worse. So how did SBF get here? Time to understand the person behind the headlines.

Let’s start at the beginning. The son of two Stanford law professors, SBF was born in 1992 on the campus of Stanford University. Despite that, he was never a big fan of school—severely under-challenged, young Bankman-Fried would cry about being bored, his mother told Yahoo Finance.

In 2010, he decided between going to MIT or CalTech by flipping a coin (MIT won). At college, SBF lived in a nerd’s interpretation of a fraternity called Epsilon Theta. There, SBF made close friends who would later help him run his crypto empire from a shared luxury penthouse in the Bahamas.

After college, SBF set out on a career path that would culminate in far more than just a padded LinkedIn profile:

• After graduating with a degree in physics (which SBF described as “f***ing useless”), he went on to work at Jane Street Capital, a proprietary trading firm specializing in international ETFs.

• But working on Wall Street didn’t do it for SBF. So when he discovered crypto in 2017, SBF founded Alameda Research and went all-in on arbitrage trading (buying Bitcoin cheap in the U.S. and selling it in Japan).

FTX was founded two years later and quickly established itself as a major player—FTX had over 1 million users and was once the third largest crypto exchange by volume.

And SBF was every part the ambitious young leader. The secrets to his success (before his empire came crashing down in approximately one week)?

• Multitasking and crazy hours. SBF prides himself on sleeping just four hours a night (on a beanbag in his office), playing video games during VC calls, and doing six things at once.

• A strong personal brand. SBF’s persona was a focal point of his business. From investors to regulators, everyone loved the narrative of a floppy-haired prodigy making crypto a better place. Even SBF’s open endorsement of "stimulants" couldn’t tarnish his image.

• And radical honesty. Unlike many of his contemporaries, SBF was transparent about his ambition in crypto: to make as much money as possible. But his reasoning went beyond “usurp Elon Musk as the world's richest person.”

SBF is a firm believer in a practice known as effective altruism (EA), something he’s ascribed to in various ways, shapes, and forms for most of his life. So what is EA?

• The EA movement urges people to use their time and resources in a way that brings about the most good to the most people. Efficiency, cost effectiveness, and relative impact are determined by thorough research and analysis.

• For SBF, the pathway to a positive impact at a mass scale was “earning to give.” An example of that thinking: You can make a bigger difference getting rich on Wall Street and donating millions to malaria relief than actually working on the ground distributing malaria vaccines.

SBF thought of himself as the Robin Hood of crypto, planning on eventually donating 50% of his entire wealth. As a part of his charitable vision he also launched the Future Fund, FTX’s philanthropic arm that planned on investing $1 billion in projects that would benefit humanity.

The irony? SBF’s global impact wound up being net negative (having cost more than 100,000 creditors their money). And we can’t help but wonder what went wrong with his utility calculations—fraudulent misappropriation of funds isn’t exactly philanthropic.

Big picture

The fact that SBF could attain so much power within the crypto industry shows how dangerous herd mentality can be—when everyone thinks everyone else is doing the background check? That’s how you end up idolizing (and funding) someone who can so quickly fall victim to hubris, adrenaline, and megalomania.

Moving forward: Exploring the stories behind crypto’s most powerful leaders can give us insights into how they operate—not just as CEOs, but as people. Armed with that knowledge, we’ll hopefully be able to spot the next SBF before something of this magnitude happens again.

And that’s what you need on your crypto radar this week. Do you think SBF will serve jail time? Reply to share your thoughts and catch you again on Tuesday.