Filed under:By Elizabeth Lopatto, a reporter who writes about tech, money, and human behavior. She joined The Verge in 2014 as science editor. Previously, she was a reporter at Bloomberg. Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, is on trial for eight counts of wire fraud and conspiracy to commit wire fraud.Bankman-Fried founded FTX because he was frustrated with other exchanges used by his crypto trading firm Alameda Research, according to a profile from FTX investors Sequoia Capital. But FTX was a fraud “from the start,” the Securities and Exchange Commission alleges.Bankman-Fried is accused of misappropriating and embezzling FTX customer deposits, according to the superseding indictment. He represented himself as the Good Boy of Crypto, “spending millions of dollars to promote FTX and its sister company FTX.US as safe places to invest in cryptocurrency,” the indictment says. Meanwhile, “FTX’s finances contained a multi-billion-dollar deficiency caused by his own misappropriation of customer funds from the exchange.”The customer money was used by Bankman-Fried to, variously, make billions of dollars of investments, buy $200 million of real estate, and repay Alameda’s lenders, according to the indictment.The entire scheme came to light after CoinDesk published a blockbuster article about Alameda’s balance sheet. It showed that FTX and Alameda were very closely linked and that a lot of the balance sheet consisted of the FTT token, which was issued by FTX. That article led to Binance CEO Changpeng “CZ” Zhao — a former investor in FTX — saying he would sell his holdings of FTT.A series of events resulted, which ended in FTX’s bankruptcy and Bankman-Fried’s resignation from the company. Ellison was charged by the SEC with manipulating the price of FTT, which inflated Alameda’s balance sheet. That misled people about FTX’s risk exposure from Alameda.Besides the financial shenanigans, there is also the salacious aspect of the case. Bankman-Fried’s ex-girlfriend and childhood friend are testifying against him. The court has ruled questions about recreational drug use and political donations are fair game. TODAY, 12:21 AM UTCElizabeth LopattoMichael Lewis, interviewed on his time with Sam Bankman-Fried, says:I do think that if he had the internet, he could survive jail forever. Without having a constant stream of information to react to— I think he may go mad. If you gave Sam Bankman-Fried a choice (this is quite serious) of living in a $39 million penthouse in the Bahamas without the internet, or the Metropolitan Detention Center in Brooklyn with the internet, there’s no question in my mind he’d take the jail.[CBS News]Sep 28Elizabeth LopattoThe trial of Sam Bankman-Fried is likely to be more consequential than just whether the man himself is found guilty. Depending on what evidence is introduced during the trial, it could be rough for the entire crypto industry.“How much damage can this trial do to the already beaten-down reputation of the industry at this point?” asks Yesha Yadav, a law professor at Vanderbilt University. “This trial is going to be an excruciating moment for the industry because no one knows what kind of evidence might come out.”Sep 19Elizabeth LopattoThe lawyers who represent what’s left of FTX filed suit against Sam Bankman-Fried’s parents, saying they “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.” The point of the suit is to get that money back so it can be paid out to the people FTX owes.Before all this, Barbara Fried and Joseph Bankman were already well-known and respected Stanford Law School professors. Last week, Bloomberg dropped a fascinating profile of the two of them.Nov 15, 2022Elizabeth LopattoCryptocurrency has a lot of heels. Sam “SBF” Bankman-Fried was a face — until last week.Before last week, Bankman-Fried ran FTX, crypto’s third-largest exchange by volume. The No. 1 largest exchange was (and is) Binance, run by Changpeng “CZ” Zhao. In recent months, Binance has lived with a cloud over its head — it’s being investigated by multiple federal agencies over its BNB token, insider trading, and money laundering.  / Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily.The Verge is a vox media network© 2023 Vox Media, LLC. All Rights Reserved