As a courtroom drama,with its mixture of big money,high-powered politics,and personal vanity,it will probably outstrip even the trial of Ghislaine Maxwell in 2021. Less than a year ago,Bankman-Fried was celebrated as one of the world’s smartest young entrepreneurs. His cryptocurrency trading empire,FTX,was valued at $US32 billion ($47.1b),and its founder at $US26 billion ($38.2 billion). It was growing at lightning speed,investing in related tech start-ups,and with its championing of “effective altruism” leading a very millennial version of social active capitalism.
The fall,however,was spectacular. In a few short weeks last year,FTX ran out of money and collapsed with debts that are estimated at more than $US3 billion ($4.4 billion),but which could easily turn out to be a lot higher once the mess is finally cleared up.
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Bankman-Fried,of course,remains innocent until proven otherwise. It is perfectly possible for a company to go bust without any form of fraud taking place. Simple incompetence,naive over-confidence,or just a run of bad luck will do the job just as effectively as deliberate dishonesty.
His lawyers will no doubt make a case of some sort that nothing criminal happened. And yet,even if that turns out to be technically correct,there is nothing “innocent” about Bankman-Fried or about the industry that elevated him to cult hero.
He was emblematic of a venture capital cult that grew wildly out of control during a decade of easy money,and which created vastly overvalued companies based on little more than some fast-talking chutzpah.