Inside Sam Bankman-Fried’s $35 Million Crypto Fraud House in the Bahamas

Sam Bankman-Fried traded a luxury penthouse in the Bahamas for a different top-floor setting: a criminal courtroom in downtown Manhattan.

He remains about 1,100 miles from the tropical paradise until late last year and faces up to life in prison if convicted of financial crimes tied to the collapse of the once-$32 billion cryptocurrency exchange FTX.

Bankman-Fried, 31, spends her time on the 26th floor of 500 Pearl Street, one of two federal courthouses in the Southern District of New York. He sits feet away from the 12 judges who will decide his fate.

Bankman-Fried, who faces seven federal fraud charges, has pleaded not guilty.

Much of Bankman-Fried’s journey revolved around the $35 million Bahamian property she shared with nine people, including high school friends, an ex-girlfriend, college roommates and top executives at FTX and sister hedge fund Alameda Research.

Many of his former bunkmates are now on the prosecution’s star witness list. Gary Wang, a little-known co-founder of FTX and Alameda and a roommate at the Massachusetts Institute of Technology, took the stand last week and will appear again on Tuesday. Adam Yedidia, a senior FTX developer and roommate at MIT, testified last Wednesday and Thursday. Then there’s Caroline Ellison, who directed Alameda and was Bankman-Fried’s girlfriend. He is expected to appear on Tuesday.

The group was a group of 20 people who fled Hong Kong to flee the pandemic in the Caribbean, and was even closer during the Covid outbreak. They freely mingled happily with work, and Some Their statements They shared time together On New Providence Island A series of sex studies.

In the first week of Bankman-Fried’s criminal trial, prosecutors focused on how Bankman-Fried paid for the tens of thousands of dollars worth of the apartment.

Prosecutors for the U.S. Attorney’s Office entered into evidence a series of photographs of a penthouse condo in the building known as the “Orchid” where Bankman-Fried and her co-workers lived. 11,500 sq ft apartment Overlooking the marina and Atlantic Ocean.

Concerned that photos featuring boats in the background could be mistaken for property belonging to Bankman-Fried, the defense sought to strike some of the images. Judge Louis Kaplan denied the request.

Yedidia, the second witness called to the government’s stand, testified that the Bankman-Fried’s crypto hedge fund ultimately paid for their opulent environment.

In his testimony, Yedidia recalled a group signal thread titled “People of the House,” referring to Bankman-Fried’s $35 million penthouse. In a screenshot of the text exchange admitted into evidence by the government, Bankman-Fried said she “basically thinks Alameda’s paying for it.”

A violation charge states Bankman-Fried misappropriated billions of dollars worth of clients’ money for his personal gain. This includes buying more than $200 million in high-end real estate in the Bahamas and making more than $100 million in campaign contributions to the 2022 midterm elections.

Another estimate by Bahamian prosecutors says Bankman-Fried and former FTX executive Ryan Salem spent $256.3 million to buy and maintain 35 different properties across New Providence — real estate that Bahamian regulators wanted to recover in FTX’s U.S. bankruptcy protection proceedings.

Separately from the criminal case, FTX’s bankruptcy estate has accused Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, of “using their access and influence within FTX to directly and indirectly enrich themselves by millions of dollars.”

Attorneys representing FTX are suing Bankman-Fried’s parents in an attempt to recover the luxury properties and “millions of dollars in fraudulently diverted and misappropriated funds.” The lawsuit alleges that Bankman and Fried discussed with their son the transfer of a $10 million cash gift and a $16.4 million estate in the Bahamas.

“This is really old-fashioned fraud,” FTX’s new CEO John Ray, who previously led the Enron bankruptcy proceedings, told lawmakers on Capitol Hill earlier. “It’s taking money from customers and using it for your own purposes. Not sophisticated.”

Ray said the company had “no record whatsoever.”

Considered the crown jewel of Orchid Albany, it is a 600-acre seaside resort. There is said to be a consortium of celebrity supporters, including Tiger Woods and Justin Timberlake. Its super-rich ride in golf carts, drive from their homes to one of the many restaurants and then head to the beach or paddle courts, where they can play a mixed game of tennis and squash.

The Penthouse had en suite bathrooms, walk-in closets, Venetian plaster walls and Italian marble floors, its own private spa, outdoor pool and balcony with Jacuzzi.

In his new book, “Going Infinite: The Rise and Fall of a New Tycoon,” best-selling author Michael Lewis described the exterior:

“At night its penthouse was lit up purple, and the purple light made it look attractive, and provoked envy even from those accustomed to being envied.”

Lewis describes the interior of the luxury condominium as a “flophouse,” with one wall “hidden by rows of computer monitors, their cords snaking across the marble like marble vines.”

A CoinDesk journalist who visited the apartment in September 2022 described the scene as “a cross between a luxury dorm room and a jury-rigged trading floor,” adding that “the curved marble living room is made up of computer desks, each supporting multiple configurations of connected monitors.”

One of Bankman-Fried’s iconic bean bags, which she used to sleep in, was placed under a baby grand piano in a room that defense attorneys likened to the common area of ​​a dorm room.

Bankman-Fried’s lawyer, Mark Cohen, said in his opening statement that his client was a “A math nerd who doesn’t drink or partyLewis writes in his book that “having a glass of wine is tantamount to an “act of hedonism”.

As for the epic scenes, Lewis said Bankman-Fried and her housemates “only see them occasionally.”

Outside Albany there were six stadium-lit paddle courts. Yedidia said it was there that he and Bankman-Fried discussed his concerns about the business.

In the summer of 2022, and while fixing a bug in FTX’s code base, Yedidia discovers an $8 billion debt that Alameda owes FTX.

Advocates asked why he was concerned about the budget hole.

“Because if they spend money that belongs to FTX customers, they can’t give FTX customers a refund,” Yedidia testified.

Near the small hut at the edge of the net, Editia asked her boss if things were all right. He was worried because “like a lot of money” was at stake from FTX customers.

In June 2022, Yedidia submitted a report to Bankman-Fried on Signal that showed $8 billion in customer money in an internal database tracking money wired to an Alameda account called “fiat at. ftx.com“Missing.

Yedidia said she trusted Bankman-Fried and Ellison to “handle the situation” even if Bankman-Fried seemed “worried or nervous.”

Yedidia testified that she had not spoken to or seen Bankman-Fried since November. The day before FTX filed for bankruptcy, Yedidia resigned after a fellow developer alleged that Alameda used FTX customer deposits to pay off creditors.