Not long after Sam was born, it became clear to his parents that he was not like other children. He cared little for toys, apart from puzzles, and seemed largely indifferent to amusement parks and birthday parties. One evening before bed, Fried recalled, Sam and Gabriel, who were still in elementary school, started asking her and Bankman questions about divorce. They knew a kid whose parents were getting one, and wanted to know how it worked, and who got what.
After graduating, Bankman-Fried enrolled at M.I.T., imagining that he might become a physicist. His plans began to evolve in his sophomore year, when he learned about the effective-altruism movement. Many effective altruists have taken inspiration from the philosopher Peter Singer, who argues that, when more than a billion people in the developing world are impoverished and suffering, spending on luxuries is morally flawed. The E.A.
The cryptocurrency boom was under way, and hundreds of digital coins were trading on exchanges around the world. Bankman-Fried became interested in the industry after noticing that the prices were often quoted differently depending on which exchange one was using. A clever trader who was proficient in algorithmic programming was well positioned to exploit the differences—say, buying a bitcoin in the U.S., selling it in Japan, and profiting on the spread.
Most of FTX’s revenue came through fees that investors paid to trade on its platform. CNBC reported that the exchange’s revenue was a billion dollars in 2021. That fall, Bankman-Fried appointed Ellison and Sam Trabucco, a fellow M.I.T. graduate, to become co-C.E.O.s of Alameda, so that he could focus on FTX. Bankman-Fried has said that he didn’t play a role in investing decisions for Alameda after that point, but, according to the C.F.T.C.
The following year, a murky FTX transaction implicated Bankman-Fried’s parents directly. During the company’s property-buying frenzy, the couple signed a deed to the sixteen-and-half-million-dollar beach house in the Bahamas where they stayed, although they hadn’t paid anything toward it. The bankruptcy suit insinuates that the arrangement was made at their son’s instigation. Bankman-Fried and his parents strongly deny this.