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Can FTX Be Revived—Without Sam Bankman-Fried?

Sam Bankman-Fried just ain’t all that, says Pat Rabbitte. “He’s not that remarkable … I just don’t see it.” Rabbitte was a customer of FTX, the crypto exchange founded by Bankman-Fried that filed for bankruptcy in November. Bankman-Fried is set to go on trial in New York on October 3, charged with conspiracy and fraud relating to the collapse of the exchange. Like hundreds of thousands of others, Rabbitte’s money is tied up in the bankruptcy proceedings. What happens to those creditors is far worthier of attention, Rabbitte says, than what happens to Bankman-Fried. “He is not that interesting.”

In this opinion, Rabbitte is in the minority. Before FTX collapsed, Bankman-Fried (or SBF, to some) was very much a main character. The 31-year-old, who styled himself as the respectable face of crypto, steered the exchange to a $32 billion valuation in only three years. He courted regulators, politicians, and venture capitalists. He fraternized with sports stars and supermodels. He seduced reporters at the largest English-speaking publications. He’s the “next Warren Buffet,” they crooned, the “Michael Jordan of crypto.” Decked in his trademark costume—a T-shirt, shorts, and dad sneakers—he projected a humility unlikely of the world’s youngest billionaire.

When FTX crumbled and the gory allegations followed, Bankman-Fried’s reputation cratered too. But fascination with his character was amplified. The question shifted from “How did he achieve so much?” to “How did he deceive so many?” The salacious details of the sexual encounters between Bankman-Fried and his inner circle will feed into the circus of his trial, rekindling the debate about his genius, morality, and legacy. Rabbitte will follow along, but not obsessively. His focus, along with a group of other FTX victims, will be elsewhere.

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In May, a group including Rabbitte began to gather on the messaging platform Telegram to discuss an idea that, to many ears, might sound impossible: restarting FTX, without SBF. They had all lost money to the exchange. At the end of the bankruptcy, they can expect to recover a portion of that money, though probably not all of it and not for years to come. Firing up the exchange, they think, could provide a route to a faster and fuller recovery.

To a large extent, FTX was SBF. It was the sum of his entrepreneurship, marketing, lobbying, and risk-taking. Now the brand is in tatters. The group of creditors, who call themselves the FTX 2.0 Coalition, believe the exchange has a future without him. “The business was essentially good,” Rabbitte insists.

Bankman-Fried was raised on the campus of Stanford University, where both his parents taught. They were law professors, but mathematics was his forte. After graduating from the Massachusetts Institute of Technology (MIT) with a physics degree, he took a job as a quant trader—someone who programs software to trade for them—at Jane Street Capital, one of the biggest firms on Wall Street. He was reportedly drawn by its associations with effective altruism (EA), an intellectual movement that advocates for earning as much money as possible in order to give it away. The idea struck a chord.


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