The collapse of Sam Bankman-Fried’s crypto enterprise is sudden and shocking, a sentiment prevalent among his former employees.
It might be related to a luxurious penthouse in the Bahamas where Bankman-Fried roommates with the inner circle that managed his crypto exchange FTX and the trading powerhouse Alameda Research.
Many are former colleagues at the trading business Jane Street, while others he met at his alma mater, the Massachusetts Institute of Technology. All ten individuals are or were in romantic relationships with one another. This includes Alameda CEO Caroline Ellison, whose business played a significant part in the company’s downfall – and who had dated Bankman-Fried at times.
Several current and former employees of FTX and Alameda spoke on the condition of anonymity, alleging ongoing harassment and death threats due to the exchange’s financial issues. They stated that the organisation is riddled with conflicts of interest, nepotism, and a lack of accountability.
Under the condition of anonymity, a person who knew the situation said, “The whole operation was run by a gang of kids in the Bahamas.”
FTX and Alameda’s workers allege they have been kept in the dark about recent events and that only CEO Bankman-inner Fried’s circle may have known that the exchange transferred client funds into Alameda, as reported by the Wall Street Journal.
On Wednesday, a second Bankman-Fried employee said, “It’s been radio silence from Sam.” “When we saw the CZ [CEO Changpeng Zhao] tweet saying Binance was going to buy FTX, we thought it was fake. But then Sam’s tweet just confirmed it.”
Bankman-Fried addressed staff later on Wednesday, a week after a CoinDesk story sparked the situation, per an internal communication to employees who CoinDesk received. He said, “I completely understand if you want to step away.”
Among his nine housemates are FTX co-founder Gary Wang, FTX Director of Engineering Nishad Singh, and Ellison of Alameda, Bankman-Fried’s trading business reportedly receiving $10 billion of FTX customer funds. The remaining six are employees of FTX.
Gary, Nishad, and Sam manage the exchange’s code, matching engine, and finances, according to a source with knowledge of the situation. Who would notice if they switched them around or entered their own numbers?
A third individual acquainted with the company’s operations stated, “They’ll do anything for each other.”
Both Bankman-Fried and Ellison did not reply to a direct request for comment. Wang and Singh were unavailable for comment. A representative of FTX was also requested to relay CoinDesk’s request for comment from Bankman-Fried, Ellison, Wang, and Singh.
Joseph Bankman, a professor of law at Stanford, is also involved with the firm. In an August episode of the FTX Podcast, he discussed his involvement in charity and regulation-related projects.
Wang, Singh, and Ellison are all board members of Bankman-FTX Fried’s Foundation, the company’s charitable arm. Several roommates, notably Bankman-Fried and Ellison, are active members of effective altruism, a movement that seeks to discover the most effective methods to benefit others, presumably through philanthropy.
FTX and Alameda’s offices in the Bahamas are adjacent to a coworking complex that houses Solana developers and other cryptocurrency incubators.
“All of the stakeholders would have a hard look at FTX governance.” tweeted Bankman-Fried on Thursday. “I will not be around if I’m not wanted.”
17) All of the stakeholders would have a hard look at FTX governance. I will not be around if I’m not wanted.
All of the stakeholders–investors, regulators, users–would have a large part to play in how it would be run.
— SBF (@SBF_FTX) November 10, 2022
While some FTX employees have expressed satisfaction with Bankman-Fried’s increased frequency of communication as of late, others are not as pleased. The second anonymous employee told CoinDesk, “Some employees kept their life savings on FTX. We trusted that everything was fine”