A timeline of Sam Bankman-Fried’s spectacular fall from grace: How FTX founder oversaw ‘one of the biggest financial frauds in US history’ – and blamed girlfriend Caroline Ellison for the collapse

• The fall of Sam Bankman-Fried’s crypto exchange was made all the more dramatic as he attempted to shift the blame on to his former lover 

The rise-and-fall of crypto exchange FTX as well as its founder Sam Bankman-Fried became one of the most dramatic sagas in the US financial history. 

On Thursday, Bankman-Fried hit rock bottom when a New York jury convicted him of fraud for stealing at least $10 billion from customers and investors. In the lead-up to his acrimonious trial, Bankman-Fried regularly attempted to shift the blame on to his one-time girlfriend, Caroline Ellison. 

After the month long trial, jurors rejected Bankman-Fried’s claim during testimony in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world’s second-largest crypto exchange, collapsed into bankruptcy a year ago.

The government relied heavily on the testimony of three former members of Bankman-Fried’s inner circle, his top executives including his former girlfriend, Caroline Ellison, to explain how Bankman-Fried used Alameda Research to siphon billions of dollars from customer accounts at FTX. 

Ellison, 28, testified that Bankman-Fried directed her while she was chief executive of Alameda Research to commit fraud. 

Bankman-Fried is likely to face far less than the maximum 110 years at a sentencing set for March 28. Ellison has pleaded guilty to he role in the collapse and will be hoping for a reduced sentence thanks to her co-operation with prosecutors. 

FTX founder Sam Bankman-Fried, with Alameda Research chief executive Caroline Ellison, and FTX co-founder Gary Wang, to their right, at Bankman-Fried’s birthday in Hong Kong

Caroline Ellison leaves Federal Court after testifing against Sam Bankman Fried last month

Here is a history of FTX since its foundation in 2019:

2019:

May – Former Wall Street trader Sam Bankman-Fried and ex-Google employee Gary Wang founded FTX, the owner and operator of FTX.COM cryptocurrency exchange.

2020:

August – FTX acquired mobile portfolio tracking application, Blockfolio for $150 million.

2021:

July – A $900 million funding round valued FTX at $18 billion.

September – FTX signed a sponsorship deal with Mercedes’ Formula 1 team.

October – FTX raised capital at a valuation of $25 billion from investors including Singapore’s Temasek and Tiger Global.

2022:

Jan. 27 – FTX’s U.S. arm said it was valued at $8 billion after raising $400 million in its first funding round from investors including SoftBank and Temasek.

Jan. 31 – FTX raised $400 million from investors including SoftBank at a valuation of $32 billion.

Feb. 13 – FTX takes center stage with a series of ads that are broadcast during the Super Bowl in what becomes known as the ‘crypto bowl’ as other exchanges also buy ads.

April 26 – April 29 – Bankman-Fried is joined by celebrities including Tom Brady, Katy Perry, Tony Blair and Bill Clinton and the Crypto Bahamas conference.

The talk between Bankman-Fried, Clinton and Blair was held ‘off the record’, but some details trickled out.

As the two world leaders donned suits beside a typically-scruffy Bankman-Fried, Blair was said to have joked: ‘I’m feeling a little overdressed.’

Clinton declared crypto ‘obviously serious’ and warned of the ‘temptation to abuse’ such nascent technologies, adding: ‘You want to do right by it in the regulatory space.’

In the audience, guests lounged on beanbags laid out over a faux beach at the edge of the stage.

That night, a VIP ‘Island Party’ was followed by a closing party which ran until at least 2am.

Steve Aoki, one of the world’s highest-earning DJs, performed a raucous set with former One Direction star Liam Payne.

The pair went shirtless as they hyped up the crowd. Aoki captioned an Insta post about the bash: ‘Threw it down in Bahamas for the crypto heads!’

The former world leaders were part of a talk on the FTX Stage titled ‘The World Today’

June 4 – FTX signed a reportedly $135 million sponsorship deal for naming rights of the Miami Heat’s home court.

July 1 – FTX signed a deal with an option to buy embattled crypto lender BlockFi for up to $240 million.

July 22 – FTX offered a partial bailout of bankrupt crypto lender Voyager Digital. Voyager called it a ‘low-ball bid’.

July 29 – FTX said it won full approval to operate its exchange and clearing house in Dubai.

Aug. 19 – A U.S. bank regulator ordered crypto exchange FTX to halt ‘false and misleading’ claims it had made about whether funds at the company are insured by the government.

Sept. 9 – FTX’s venture capital fund said it would buy a 30% stake in SkyBridge Capital.

Nov. 2 – Crypto news website CoinDesk reported a leaked balance sheet that showed Alameda Research, Bankman-Fried’s crypto trading firm, was heavily dependent on FTX’s native token, FTT.

Nov. 6 – Binance CEO Changpeng Zhao said his firm would liquidate its holdings of FTT due to unspecified ‘recent revelations’.

Nov. 7 – Bankman-Fried said ‘FTX is fine. Assets are fine’.

Bundchen looked glamorous on stage with Sam Bankman-Fried at the Crypto Bahamas event. The FTX chief looked awkward as he opted for his usual outfit of scruffy shorts and t-shirt

The FTX exchange was based out of the Bahamas penthouse, which went up for sale in November 2022 after the company filed for bankruptcy

Nov. 8 – FTT collapses by 72% as clients swamp the exchange with withdrawal requests. Binance offers a potential bailout in a non-binding deal.

Nov. 9 – Binance backs out of the rescue plan, saying: ‘As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.’

Nov. 11 – Bankman-Fried resigns as CEO and FTX files for Chapter 11 bankruptcy.

Despite the immense legal jeopardy he faced, Bankman-Fried remained active on Twitter, writing Friday morning: ‘I’m really sorry, again, that we ended up here.’

‘Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them. Ultimately hopefully it can be better for customers,’ he added.

‘I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week,’ he wrote, vowing to compose a longer statement detailing the ‘play by play’ of his company’s collapse.

Nov. 13 – Police in the Bahamas announce a team from its Financial Crimes Investigation Branch are investigating whether any criminal misconduct occurred.

Nov. 15 – Bankman-Fried continues to plead with investors for money to cover the firm’s losses and tweets that he’s ‘meeting in-person with regulators and working with the teams to do what we can for customers’

Nov. 16 – Larry David and other FTX celebrity promoters, including NFL quarterback Tom Brady, are sued over claims they engaged in deceptive practices. The celebrities have said the suit should be dismissed, arguing they did not cause FTX investors’ losses. 

Dec. 12 – Bankman-Fried is arrested in the Bahamas, where he lives and where FTX is based. The U.S. Attorney’s office in Manhattan later confirms that a federal grand jury has indicted him for fraud and conspiracy charges.

Dec. 21 –  Bankman-Fried leaves the Bahamas after agreeing to be extradited to the United States. While he is in the air, prosecutors reveal that Wang and Alameda chief executive Caroline Ellison have pleaded guilty and agreed to cooperate with prosecutors.

Dec. 22 – Bankman-Fried makes an initial appearance in Manhattan federal court and is released to home detention at his parents’ home in Palo Alto, California, on $250 million bond.

 2023:

Jan. 3-12 – Bankman-Fried pleads not guilty and U.S. District Judge Lewis Kaplan schedules his trial for October. In a post-arrest blog post, Bankman-Fried denies stealing funds and blames FTX’s collapse on a broader downturn in crypto markets.

Feb. 28 – Nishad Singh, the former director of engineering at FTX, adds to the pressure on Bankman-Fried by becoming the third former member of his inner circle to plead guilty to fraud charges and agreeing to cooperate with prosecutors.

Aug. 11 – Kaplan revokes Bankman-Fried’s bail after finding probable cause to believe he tampered with witnesses at least twice, including by sharing Ellison’s private writings with a New York Times reporter. Bankman-Fried is remanded to Brooklyn’s Metropolitan Detention Center pending trial.

Oct. 3 – Trial begins in Manhattan federal court.

Caroline Ellison, pictured at Manhattan Federal Court in Manhattan, New York City on October 10, said she committed fraud and that Bankman-Fried ‘directed’ her to do it

October. 10 – Ellison takes the stand and blamed the man she was entwined with romantically for several years since 2018 for creating justifications so that she could do things that she now admits were wrong and illegal.

Testifying over the course of two days, she recalled that Bankman-Fried said he wanted to do the greatest good for the most people and that rules like ‘don’t lie’ or ‘don’t steal’ must sometimes be set aside, effectively that the ends justified the means.

Ellison told the court that Bankman-Fried’s influence ‘more willing to do things like lie and steal over time.’

Ellison spent much of the last two days walking the jury through how she, at Bankman-Fried’s direction, repeatedly had to tap into the customer deposits at FTX to solve problems at the hedge fund or at the exchange. 

FTX deposits would be withdrawn to pay for new investments or political donations, or to hide steep losses on Alameda’s balance sheet, she testified. All of this was done at the direction of Bankman-Fried. 

Oct. 28 – Bankman-Fried testifies in his own defense, saying a ‘lot of people got hurt’ when FTX collapsed but insisting he did not defraud anyone or steal billions of dollars from customers.

Sam Bankman-Fried stands as the jury foreperson reads the verdict after in his fraud trial on Thursday

Nov. 3. – Bankman-Fried is convicted of all seven charges he faced.

The soon-to-be inmate’s lawyer, Mark Cohen, later read a statement outside court to say they ‘respect the jury’s decision. But we are very disappointed with the result.’

‘Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,’ Cohen said.

U.S. Attorney Damian Williams, who sat in the front row of the spectator section during the verdict, stood before cameras outside the courthouse and said Bankman-Fried ‘perpetrated one of the biggest financial frauds in American history, a multibillion dollar scheme designed to make him the king of crypto.’

‘But here’s the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption is as old as time and we have no patience for it,’ he said.

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