President Donald Trump said in January that he had no plans to pardon Bankman-Fried. He cleared Binance founder Changpeng Zhao and Silk Road creator Ross Ulbricht, as well as other white-collar offenders.
Bankman-Fried ran two companies at once. FTX was a crypto exchange, which holds customers’ money like a broker does and is not supposed to touch it. Alameda Research was a trading company he also owned, and he moved billions of dollars in FTX customer deposits to Alameda, which spent the money on trades, venture capital investments, political donations, and real estate in the Bahamas, while FTX’s software gave Alameda an exemption from the rules that would have required it to cover its losses like any other trader.
The facade was busted after CoinDesk obtained Alameda’s balance sheet in November 2022 and found that most of what the company considered assets were $TTF — an FTX token had created itself and could be issued at will.
The guarantee backing Alameda was actually something its sister company invented. More cracks came after Binance, a leading exchange, announced days later that it would sell its $TTF assets, leading to a rapid collapse $TTF price.
Customers rushed to withdraw their deposits and FTX could not return the money because it was no longer there. The exchange filed for bankruptcy on November 11, 2022, a little over a week after the story broke.