Save 50%—more than $175—on a subscription to The InformationAct Now

Sam Bankman-Fried. Photo by Bloomberg.

Sam Bankman-Fried’s Late-Night Move and How the FTX House Crumbled

Photo: Sam Bankman-Fried. Photo by Bloomberg.

Late last night, Sam Bankman-Fried sent a message he never thought he would send. He reached out to rival Changpeng Zhao, known as CZ, CEO of crypto trading platform Binance and asked him if he would buy—and save—FTX, a person close to the deal told me. By early in the morning Pacific time, he had his answer. He would be selling his startup, which had helped transform the world of crypto investing and been valued at an astonishing $32 billion by the world’s leading private investors, for nothing. The more than $1.5 billion in financing he had raised was going “Poof!”

When journalists have suspicions about a business, they like to call it a “house of cards.” It’s a vivid analogy that basically means “We can’t tell you what is wrong with the business, but something is.” It honestly irks me when people throw the expression around without doing the work to explain what’s happening, but it is also important to follow one’s instincts. And for a while now, a lot of people have had a funny feeling about crypto and specifically about FTX, one of the world’s most popular places to buy and sell cryptocurrencies. Specifically, the thing that didn’t smell right was FTX’s relationship with crypto trading fund Alameda Research, which Bankman-Fried also controlled. 

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
Creator Economy startups e-commerce
Live Shopping Startup Firework Lays Off 10% of Staff
Photo via live shopping startup Firework
Firework, a startup building technology to enable livestream shopping, has laid off 10% of its staff just months after SoftBank led its $150 million Series B round at a $750 million valuation, according to an email sent to employees on Tuesday, which was viewed by The Information. The layoffs come as more tech companies introduce live shopping, to mixed success. YouTube has been hosting...
Latest Briefs
TikTok’s CEO Pushes Back at Concerns About Data Security
Salesforce Co-CEO Bret Taylor to Step Down in January
Zuckerberg Says Social Media Remains His Focus
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Art by Clark Miller
The Big Read
‘I’m Licking My Chops. I Know It’s Going Down’: The Pissed-Off Crypto Traders Who Predicted—and Profited From—the FTX Implosion
Ishan Bhaidani had been patient for over a month, waiting for blood in the water. Now was his moment.
Data Point google
Where Google Has Grown
Alphabet has doubled the headcount in its Google Cloud unit since early 2019, according to data obtained by The Information, outstripping Alphabet’s overall hiring growth.
Art by Clark Miller.
Gift Hunting culture
The Information’s Top Tech-Adjacent Gifts for 2022
After the roller-coaster ride of the past month, everyone needs a little retail therapy. So, in honor of Black Friday and the upcoming holiday season, we’ve put together our annual gift guide, asking The Information’s staffers to share their favorite tech and tech-adjacent purchases of the last year.
Charlie Bell. Photo via Microsoft
Exclusive microsoft amazon
A Former Amazonian Hits Bumps in Push to Make Microsoft More Secure
When Microsoft last year recruited Charlie Bell, a top product engineering executive at Amazon Web Services, it was a major coup for the software giant.
From left to right: Mysten's founders, Sam Bankman-Fried, Aptos's founders.
startups crypto
Aptos, Mysten Valuations Look Sky-High With FTX Out of the Picture
Before it spiraled into bankruptcy, FTX spent hundreds of millions of dollars splashing out on investments in crypto startups.
Photo by Getty. Art by Mike Sullivan.
Opinion culture
Employees Aren’t the Only Ones Suffering From Burnout
We’re living in a split-screen world when it comes to burnout and the employee experience. On one side are all the investments CEOs and human resources executives have been making in recent years—and especially since the pandemic began—to support employee well-being and mental health.