FTX Trading Ltd. (defunct)

Sam Bankman-Fried founded FTX in 2019 after co-founding Alameda Research, a crypto trading firm. SBF presented himself as an "effective altruist" who planned to donate most of his wealth to charity. He lived in a Bahamas compound with nine colleagues, slept on a beanbag under his desk, played video games during investor calls, and wore cargo shorts to meetings with heads of state. Institutional investors found this disarmingly authentic. They gave him billions. Sequoia Capital published a 14,000-word profile calling him "a potential future trillionaire."

By 2021, FTX had grown into the third largest cryptocurrency exchange in the world. SBF appeared on the covers of Fortune and Forbes. He donated $40 million to U.S. political campaigns — the second largest Democratic donor after George Soros. He lobbied Congress on crypto regulation, positioning himself as the responsible face of an industry known for scams.

On November 2, 2022, CoinDesk published a leaked balance sheet showing that Alameda Research held most of its assets in FTT — FTX's own token. Binance CEO Changpeng Zhao announced he would sell his FTT holdings. A bank run began. Within 72 hours, FTX faced $6 billion in withdrawal requests it could not meet. The exchange halted withdrawals. SBF resigned. FTX filed for bankruptcy on November 11, 2022. Bankruptcy investigators discovered that approximately $8 billion in customer funds had been transferred from FTX to Alameda Research and used for investments, political donations, and real estate purchases.

Sam Bankman-Fried was convicted of fraud and conspiracy on all seven counts against him in November 2023. At sentencing in March 2024, Judge Lewis Kaplan handed down 25 years in federal prison and ordered the forfeiture of $11 billion. Kaplan warned that Bankman-Fried "will be in a position to do something very bad in the future, and it's not a trivial risk." SBF had maintained throughout that he had not intended to steal — that the collapse was a risk management failure rather than fraud. The judge, prosecutors, and jury did not agree.

In June 2026, a federal appeals court upheld Bankman-Fried's fraud conviction and 25-year sentence, ruling that the case against him was "conservatively stated, robust." Every viable legal avenue to overturn the conviction was now closed. Meanwhile, the FTX bankruptcy estate had recovered far more than expected: over $6.5 billion had been distributed to creditors by mid-2025, with additional payments ongoing. Caroline Ellison, who had cooperated with prosecutors as the CEO of Alameda Research and SBF's former romantic partner, received a two-year sentence and was released in January 2026 after serving 14 months. The effective altruist who had promised to give away his wealth had stolen it instead, and was now serving the longest sentence ever imposed for a crypto-related crime.