it wasn’t long ago that sam bankmanfried was a king of the crypto world just six months ago ceos celebs and world leaders like bill clinton and tony blair flocked to him gathering at a davoslike conference he hosted in the bahamas where he lives as one of the most outspoken evangelists for the power of the blockchain fast forward to sunday and bankmanfried’s crypto empire came crashing down the victim of an oldfashioned bank run that quickly exposed the weaknesses of the new finance system he had championed almost overnight bankmanfried’s cryptocurrency exchange ftx had gone from being valued at 32 billion to worthless leaving scores of investors scrambling to get their deposits back and triggering probes in the us by the securities and exchange commission the commodities futures trading commission and the department of justice according to reports on thursday the 30yearold bankmanfried took to twitter to level with his clients “i fucked up and should have done better” he wrote it took less than five years for bankmanfried to build a personal fortune that was estimated at its highest point to be more than 26 billion making him among the richest people in the world his schlubby boyish appearance illfitting tshirts gym shorts and a mop of curly hair made him look more like a college student ripping bong hits in the basement of a frat house than a finance guru but fit nicely with the antiestablishment ethos that appealed to crypto enthusiasts the son of law professors at stanford university bankmanfried was a wunderkind from an early age he studied physics and mathematics at the massachusetts institute for technology after a stint as an etf trader for jane street capital a highly respected wall street firm that is known for attracting genius quantitative traders bankmanfried became interested in the concept of effective altruism a philosophy that focuses on using reason and evidence to find solutions that benefit the most people possible in 2017 he launched alameda research a quantitative trading firm focused on digital currencies over the next year he began building his fortune through arbitrage trading of bitcoin btcusd between exchanges in the us and japan where prices were often slightly higher in 2019 bankmanfried launched the crypto exchange ftx the timing was fortuitous as the covid19 pandemic spread across the globe the following year interest in cryptocurrencies among people exploded ftx took off and brought in the bigname celebrity endorsers and partners like professional athletes tom brady and steph curry bankmanfried soon found himself feted by some of the biggest institutions in finance attracting investment from the biggest names on wall street and beyond like softbank 9984 group sequoia capital blackrock blk  tiger global management thoma bravo he even raised money from billionaire hedge fund legends paul tudor jones and israel englander soon ftx was among the biggest players in the industry despite his ballooning wealth bankmanfried maintained the appearance and lifestyle of a teenage gamer he moved to the bahamas where he reportedly lived in a penthouse apartment with 10 roommates on zoom calls he would often play video games while talking his favorite game being league of legends profiles of him often noted that he kept a bean bag just feet from his desk to sleep on what set bankmanfried apart from other crypto tycoons was his professed interest in working with regulators to create a more robust framework around the nascent industry and treat it more like a traditional finance network to that end bankmanfried appeared before congress to try to explain to skeptical us lawmakers how the crypto industry worked he also said he welcomed regulation not always a popular position in the crypto world “ftx believes government agencies could play an even more prominent role in the digitalasset ecosystem and bring greater investor protections by closing some regulatory gaps” he said before a senate panel in february “ftx believes that such efforts would combine the best aspects of traditional finance and digitalasset innovations” in recent months bankmanfried even put his great wealth to play in politics becoming a major campaign donor for the democratic party in 2020 he was one of president joe biden’s largest single donors and spent nearly 40 million on political campaigns this year for the midterm elections according to campaign filings as cryptocurrencies have experienced significant declines in prices this year triggering the collapse of several operations bankmanfried arose as a savior buying up several failing partners as positioning himself as a kind of robin hood for the industry for as fast a rise to the top of the world that bankmanfried enjoyed the fall was just as rapid on sunday changpeng zhao the ceo of ftx’s competitor binance and an archrival of bankmanfried’s announced on twitter that his firm the world’s biggest cryptocurrency exchange was liquidating its sizable holdings of ftt the coin issued by ftx “due to recent revelations that have come to light” bankmanfried accused zhao of spreading false rumors but the damage was done binance’s move triggered a massive selloff with customers seeking to redeem some 5 billion in deposits ftx didn’t have it and redemptions froze up on tuesday bankmanfried announced that ftx had reached a tentative agreement to be acquired by binance due to a “significant liquidity crunch” the turmoil set off broad declines among several of the most popular cryptocurrencies and even spilled into the world of traditional finance sending markets tumbling the next day the chaos increased with reports that ftx and bankmanfried were under investigation by several us agencies by the end of the day binance said it was walking away from the deal because due diligence had revealed that “the issues are beyond our control or ability to help” binance’s deal seemed like the only thing preventing ftx from potentially collapsing “at some point i might have more to say about a particular sparring partner” bankmanfried tweeted on thursday “for now all i’ll say is well played you won” also on thursday the wall street journal reported that bankmanfried had been using some customer deposits to fund risky bets by his alameda research firm setting ftx up for collapse with the binance lifeline gone and with few options available bankmanfried told investors he needed 8 billion or more to plug the hole in ftx’s books according to reports on twitter bankmanfried said he would focus all his efforts on making sure depositors got their money back he also tried to explain ftx’s collapse saying “a poor internal labeling of bankrelated accounts meant that i was substantially off on my sense of users’ margin i thought it was way lower” said bankmanfried “my 1 priority–by far–is doing right by users” he wrote “right now we’re spending the week doing everything we can to raise liquidity i can’t make any promises about that”