WaPo | Sam Bankman-Fried, the 30-year-old wunderkind of cryptocurrency, spent tens of millions of dollars over the past year trying to reshape how Washington and the world think about finance.
The crypto exchange he founded, FTX, had become an industry-dominating business in just three years, valued at $32 billion as recently as January. He amassed political clout in an even bigger hurry, emerging from obscurity to become the second-biggest Democratic donor in the midterm elections.
By Friday, the money and the clout had disappeared: Bankman-Fried resigned from FTX, which then filed for bankruptcy. And Bankman-Fried was left facing harrowing questions about his role in the most catastrophic collapse the notoriously volatile crypto industry has so far seen.
When Bankman-Fried was just 28, he built a platform that offered investors easy access to buying, selling and stashing bitcoin and other cryptocurrencies. The offshore exchange allowed investors to place risky bets not allowed in the United States, though it was easy enough for American users to find workarounds; a U.S. affiliate offered limited services. With a massive marketing push — including a flashy Super Bowl ad and naming rights to the Miami Heat arena — he sought to make crypto trading a mainstream pastime.
Meanwhile, he was using his newfound political clout to sell Washington on a regulatory regime that promised to work to his advantage. The contrasts were glaring and never easily reconciled: As crypto’s self-appointed ambassador to Washington, Bankman-Fried was pressing for federal regulation even as he dodged U.S. oversight from his corporate headquarters in the Bahamas.
The executive acknowledged that FTX’s aggressive lobbying made him an outlier in crypto. “Outside of us, there weren’t many people engaging,” Bankman-Fried said in an interview last month with The Washington Post. “I think that means we have to do a better job as an industry more generally engaging.”
In March, he appeared at the House Democratic retreat in Philadelphia with his arm around House Financial Services Committee Chair Maxine Waters (D-Calif.). In April, he turned up in the office of Caroline Pham, a Republican member of the Commodity Futures Trading Commission, less than a week after she assumed the post, along with Mark Wetjen, the former acting chair of the agency and now Bankman-Fried’s top Washington adviser. Hill staffers say they regularly spotted him around the Capitol, shuttling between meetings flanked by Wetjen and Eliora Katz, who joined FTX this summer from the staff of the Senate Banking Committee’s top Republican, Patrick J. Toomey (Pa.)
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