Tuesday, September 26, 2023

FTX ‘Run by a Gang of Kids in the Bahamas Who Dated Each Other’: An Inside Look at the Crypto Empire

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The people who worked with FTX CEO Sam Bankman-Fried were shocked at the empire’s rapid fall and tell of his “radio silence” in the midst of chaos at the second-biggest crypto exchange.

People familiar with the operation spoke to CoinDesk on anonymity citing ongoing harassment and death threats: “The whole operation was run by a gang of kids in the Bahamas.”

The 30-year-old crypto king lives in his Bahamas luxury penthouse with his nine housemates who include the company’s co-founder and Chief Technology Officer Gary Wang, FTX Director of Engineering Nishad Singh and Caroline Ellison of Alameda. The other 6 employees are former co-workers from quantitative trading firm Jane Street and others he met at his alma mater, Massachusetts Institute of Technology.

It is speculated that they were all paired up romantically and Ellison who is Alameda’s CEO, is Bankman-Fried’s on and off again girlfriend.

Gary Wang–Chief Technology Office
Nishad Singh–Director of Engineering
College is Pretty Great-Caroline Ellison '12 – Tiger Insider
Caroline Ellison–Alameda Research CEO

Alameda Research is a trading giant at the center of the company’s collapse which the Wall Street Journal reported got $10 billion of FTX customer money. This spurred allegations of FTX’s mishandling of funds when it tapped into customer accounts to fund risky bets in its trading company Alameda.

In the Bahamas, FTX and Alameda’s offices are also located steps apart in a coworking compound that also houses other crypto incubation projects.

“Gary, Nishad and Sam control the code, the exchange’s matching engine and funds,” the first person familiar with the matter said. “If they moved them around or input their own numbers, I’m not sure who would notice.”

A third person familiar with how the company operated said: “They’ll do anything for each other.”

FTX and Alameda employees told CoinDesk that they were kept in the dark regarding the events of the past week, stating that only Bankman-Fried’s inner circle may have had knowledge about the company’s dealings.

Bankman-Fried’s father, Stanford Law professor Joseph Bankman, also plays a role at the company. He is believed to be involved in the company’s charity and regulation-related projects.

“Some employees kept their life savings on FTX,” the second anonymous employee told CoinDesk. “We trusted that everything was fine.”

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