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The Who's Who of the FTX Inner Circle

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www.coindesk.com 22 November 2022 15:15, UTC
  
Reading time: ~19 m

The downfall of FTX was swift and brutal. In a manner of eight days earlier this month, the crypto exchange – developed as a skunk-work project inside Sam Bankman-Fried’s quant-driven trading shop, Alameda Research – went from being one of the most used and valuable crypto companies ever to a pile of failed bets and worthless tokens.

How exactly the firm collapsed is still a matter of investigation. Three U.S. federal agencies – the Department of Justice, Securities and Exchange Commission and Commodity and Futures Trading Commission – are probing the remains while insiders begin to speak out about a company that rose and fell like a house of cards.

FTX’s new chief executive, John Ray III, has said Bankman-Fried’s crypto trading empire is the biggest “failure of corporate controls” he’s seen – a notable statement considering Ray helped unravel the Enron scandal and to get its investors paid. Upwards of one million FTX customers have lost funds, according to bankruptcy filings.

While not conclusively proven, it seems that FTX client money was being gambled by Alameda traders. That could have been standard operating procedure for years between the two closely linked firms, or part of a poorly planned scheme to patch holes in the hedge fund’s balance sheet that emerged in the market downturn earlier this year.

And that’s just it: As the story continues to develop, the world is none the wiser about the motivations behind crypto’s most significant collapse since Mt. Gox. Is Sam Bankman-Fried, the disheveled, media-hungry founder, a sociopath, as some are beginning to say? Or a product of a worldview called effective altruism, which might encourage people to lie, cheat or steal their way to a fortune – so long as it’s for a good cause?

There were red flags along the way. Brian Armstrong, surveying the wreckage, has said he was always curious about Bankman-Fried’s burn rate, considering the relative size of FTX and Armstrong’s own crypto exchange, Coinbase. Then there’s the warning signs in FTX’s accounting – including signs of tax avoidance and misappropriation (to say nothing of Prager Metis, FTX’s sketchy auditing firm with an office in Decentraland).

See also: What Investors and Accountants Missed in FTX's Audits

What about the fact that FTX’s C-Suite was composed of mostly inexperienced friends of Bankman-Fried? CoinDesk, which kick-started the FTX fall with a terse story about Alameda’s illiquid assets, has since reported that FTX was primarily controlled by an inner-circle of close associates. Not much is known about the group – made worse as members take steps to delete their social media accounts.

By and large, SBF’s inner circle were all adherents of effective altruism. They lived closely together, in Bahamian property owned by FTX and Bankman-Fried, and formed romantic relationships. Some may have been clued in about a so-called backdoor between FTX and Alameda, which allowed client funds to be transferred without leaving a trace.

CoinDesk has gathered what information is available about these individuals, which includes childhood friends of Bankman-Fried and recent hires. Not everyone listed will be implicated in what looks like fraud, but as high-level operators they should do what they can to make sure the full story is told.

Who is Caroline Ellison?

  • Former CEO of Alameda Research
  • Child of MIT economists
  • Colleague of Sam Bankman-Fried from Jane Street days

Nishad Singh joined Alameda Research in the early days, when the five-person trading firm was based in a Berkeley, California, apartment. He went from finding and exploiting arbitrage opportunities in crypto markets to being appointed director of engineering at FTX.

Singh is thought to be a close confidant of Bankman-Fried, having shared multiple apartments with the FTX founder over the years, including most recently a 10-person luxury penthouse in Nassau, the Bahamas.

He is rumored to be just one of three people who controlled the keys to the exchange’s matching engine, and may have been informed of a plan to backstop losses at Alameda with FTX customer funds.

Singh did not return a request for comment for this article. Although his LinkedIn profile is down and his Twitter account locked, the University of California, Berkeley graduate talked about why he left his dream job at Facebook to join Alameda Research in a FTX podcast.

"I spent maybe about a month doing weekends and nights at Alameda,” he said, discussing a period of time when his “day job” was as a software engineer working on applied machine learning at Facebook. “At some point, it became obvious that was kind of stupid … so I took some time off and really gave my 100% working at Alameda," Singh said.

Singh visited Alameda in the first month of its existence, where he witnessed Bankman-Fried execute a sequence of trades that he described as "super profitable, easy to understand and there were lots available." Feeling inspired, he took a job.

In the podcast, Singh said he was also attracted to the company's cultural commitment to effective altruism, a movement that "aims to find the best ways to help others," which he discovered in college. He is a board member of FTX Future Fund, a part of the FTX Foundation, a philanthropic collective funded principally by Bankman-Fried and other senior FTX executives.

"It was pretty clear that everybody working [at Alameda] was highly motivated, was sort of effective altruism-aligned, which mattered a lot to me and was really [a] bright spot. I could learn a lot from them," Singh said in the podcast.

After spending one and a half years as a core Alameda engineer, Singh took a role as the head of engineering at the then-newly launched FTX derivative exchange in 2019, where he was allowed to code with “minimal supervision.” He has provided code to a number of Bankman-Fried-related projects, including the decentralized exchange Serum on Solana.

“Nishad was one of my brother’s best friends in high school. He’s shown the fastest and most sustained professional growth I’ve ever witnessed,” Bankman-Fried wrote in a company blog. Singh also reportedly built most of FTX’s “technological infrastructure” and managed the development team.

Although pitched as a community-run and- organized exchange, people familiar with the matter told CoinDesk the true power over Serum rested with FTX Group, which then held the program’s access keys. A similar relationship may be in place at FTX’s core properties.

Singh is reportedly now "under supervision" by Bahamian authorities along with Bankman-Fried and Wang.

Who is Sam Trabucco?

  • Former co-CEO of Alameda Research
  • One of the firm's first hires, who oversaw the development of ever-riskier trading strategies
  • Retired in early 2022

Gary Wang is not like his co-founder Sam Bankman-Fried, who loves fame and putting himself at the center of public attention (even when people are begging him to stop tweeting). In fact, there’s little public information about Wang, who has been described as a shady but critical player in the rise and fall of FTX.

Wang met Bankman-Fried at a math camp in high school. Later, they became college roommates at the Massachusetts Institute of Technology, where Wang got degrees in mathematics and computer science and Bankman-Fried received a bachelor's in physics.

Before co-founding Alameda Research (and later FTX), Wang worked at Google. He claims to have built a system to aggregate prices across public flight data, according to an introduction on the Future Fund's website. When Bankman-Fried left the Jane Street Hedge Fund to start Alameda in 2017, Wang left the tech giant.

The startup has its beginnings in a three-bedroom Berkeley apartment – the downstairs served as its office. The firm shifted to Hong Kong, in part to take advantage of arbitrage opportunities in Asian bitcoin markets – including the price discrepancy between BTC in Japan and BTC everywhere else.

It’s there that Wang and Bankman-Fried funneled funds from Alameda to build its bespoke derivatives exchange. Bankman-Fried told Insider that he is not a good coder: "I don't code. I'm trash. I have not written any of FTX's code base. That's all a lot of other really impressive people at FTX. That's not me at all."

Nishad Singh, the head of engineering at FTX, said Wang was a "really good mentor" who offered suggestions and advice to push things out on short timescales.

In the aftermath of FTX’s collapse, and the subsequent $400 million hack, questions are circulating around who could possibly have abused client funds. Wang is a prominent suspect, as one of the few people with "root access" to the exchange’s code base, according to The Block.

Wang is also one of the board members of FTX Future Fund – the charity guided by “effective altruism” that aims to "use reason and evidence to do the most good possible for the most people."

Wang, one of the 10 roommates in Bankman-Fried’ luxury penthouse in the Bahamas, is reportedly among the four people cited by Caroline Ellison who knew about the decision to send customer funds to Alameda, according to people who spoke to the Wall Street Journal.

A few Wang photos are circulating on the internet, though little else is known about the mysterious co-founder who preferred to stay in the shadows as SBF chased the limelight. In a now infamous picture on FTX’s website, CTO Wang is seen with his back facing the camera as he focuses on the monitors in front of him.

At the age of 28, Wang topped Forbes' 2022 list of the world's billionaires under 30 with a net worth of $5.9 billion in April. SBF sent his congratulations to Wang in public, tweeting that "I couldn't be prouder" when the list came out.

Who is William MacAskill?

  • A chief architect of effective altruism
  • Mentor of Sam Bankman-Fried
  • Philosophy professor at Oxford

William MacAskill (williammacaskill.com)

As the world picks through the wreckage of the collapsed crypto exchange FTX and its sister trading firm Alameda Research, scrutiny has fallen largely on founder Sam Bankman-Fried and his close circle of allies. But one hugely important figure in the immense financial catastrophe was never a part of Bankman-Fried’s corporate leadership circle: the 35-year-old Scottish philosopher William MacAskill.

Instead, MacAskill is the thinker perhaps most associated with the moral philosophy known as “effective altruism,” which was profoundly influential on Bankman-Fried, Alameda CEO Caroline Ellison and others in their intimate circle. MacAskill is currently an associate professor in philosophy and a research fellow at the Global Priorities Institute at England’s University of Oxford. He is the author of several books, including a 2016 introduction to effective altruism called “Doing Good Better” and a recent follow up called “What We Owe the Future.”

Those books, and MacAskill’s broader body of work, may be due for a reassessment after the FTX debacle. Some have argued that MacAskill’s ethical views helped nudge Bankman-Fried to take the risks that ultimately led to the implosion of the Alameda/FTX empire. And according to people, including one of Bankman-Fried’s most prominent financial backers, MacAskill wasn’t just a philosophical influencer: He played a direct role in guiding Bankman-Fried along the path that led to the creation, and ultimately implosion, of Alameda Research and the FTX exchange.

After Bankman-Fried established the philanthropic Future Fund, MacAskill became an adviser, helping distribute funds for maximum impact. After the collapse of Alameda and FTX, MacAskill announced that he had resigned, saying the role had been unpaid. Staff of the Future Fund have also resigned, announcing that many grants already promised to organizations will now go unfulfilled because of the blowup.

While many moral systems maintain that human suffering could be best alleviated by spreading both wealth and power more democratically, effective altruism essentially argues the opposite: that the very smartest and hardest-working individuals should pursue wealth and influence, then leverage it to the greater good. Many if not most members of Bankman-Fried’s inner circle professed effective altruist beliefs. According to a recent profile of MacAskill in the New Yorker, effective altruists worldwide now control roughly $30 billion in philanthropic funds.

According to a fawning profile of Bankman-Fried published by Sequoia Capital, MacAskill had a direct and sizable influence on the founder’s worldview from very early on. (Sequoia has long been one of the most respected venture capital funds in Silicon Valley, and invested a reported $210 million in FTX. It has since written the investment down to zero – and deleted the profile of Bankman-Fried from its website.)

MacAskill, according to the Sequoia profile, was introduced to SBF through MIT’s Epsilon Theta, the “coed fraternity of supergeeks” through which many future members of the FTX leadership circle first connected. That led to a coffee meeting in which MacAskill pitched effective altruism to Bankman-Fried, years before SBF founded the crypto exchange.

During that initial meeting, MacAskill reportedly urged Bankman-Fried to adopt an “earn to give” approach to life. That mindset could be easily mistaken for a moral license to bend the rules, especially by someone who, like Sam Bankman-Fried, “would never read a book.”

But MacAskill’s influence was not merely to give Bankman-Fried an all-too-wobbly ethical framework. Also according to the Sequoia profile, it was MacAskill who suggested Bankman-Fried pursue an internship at the trading firm Jane Street, rather than more directly public-spirited options Bankman-Fried was considering, such as becoming a journalist or entering politics directly. Jane Street became a stepping stone that led directly to the creation, and ultimately downfall, of Alameda Research and FTX.

The global effective altruism community even reportedly played a direct role in the “kimchi premium” trade that is believed to have generated the capital for the creation of FTX. Again according to the Sequoia profile, a Japanese effective altruist helped Bankman-Fried set up the Japanese banking needed to arbitrage the premium on the price of bitcoin in South Korea.

See also: Why Bitcoin Needs Philosophy | Opinion

Bankman-Fried’s behavior, which increasingly appears to have included not just mismanagement but substantial fraud, has triggered a wave of vexed soul-searching in the effective altruism community. But critics of MacAskill’s ideas have for years insisted they founder on basic questions, such as: Who determines the right people to (altruistically) pursue wealth and influence? The answer would seem to be a hyper-capitalist tautology: The people who make the most money are inherently the most deserving, because they’re the smartest and therefore also know the best ways to improve the world.

An implicit version of this type of “altruism” was arguably baked into the “change the world” narratives that for a time fueled excitement around tech companies like Facebook (now Meta). That isn't a surprise: This philosophical frame is an ideal way to make boatloads of money doing things like selling user data without having to feel bad about it, as long as you give a lot of the money away. In practice, that’s not so different from the charitable efforts of old-school robber barons like John D. Rockefeller.

To his credit, MacAskill wrote in the aftermath of the collapse that “if those involved deceived others and engaged in fraud … they entirely abandoned the principles of the effective altruism community.” He also seems to have taken his principles more seriously than many of his adherents. According to the New Yorker profile, in his youth MacAskill cut his own expenses to the bone so he could donate money to help people in need, to the point of relying on homemade bread for his dinners.

But that more onerous side of the effective altruism seems fairly flexible for some, including Bankman-Fried: a luxury penthouse in the Bahamas shared with 10 friends is, after all, still a luxury penthouse in the Bahamas.

Who is Ramnik Arora?

  • FTX’s product lead
  • Sometimes called SBF’s “key lieutenant”
  • A former Facebook engineer

Ramnik Arora was one of FTX’s most high-profile hires in a period of rapid expansion before the crypto exchange’s quick unraveling in November. The head of product, sometimes called Sam Bankman-Fried’s “key lieutenant,” was “plucked out of obscurity from Meta Platforms in 2020, according to tech news site The Information.

In addition to overseeing the rollout of new products at the exchange, Arora was key to FTX’s investor relations. He reportedly served as a conduit to the venture capital giant Sequoia Capital, which invested in FTX’s Series B funding round and advocated for Bankman-Fried. The firm was valued at $32 billion, before it unraveled.

The Information, citing internal sources, also said Arora played a large role on the opposite side of investor relations at FTX, and helped close a number of venture deals Bankman-Fried and his exchange made into crypto startups. He was a general partner at FTX Ventures, where he helped close rounds with Aptos, LayerZero and Coral.

In a now-notable scene from Bankman-Fried’s fundraising salad days, Arora said he had caught the CEO playing a video game while giving a “well-received presentation.”

“The entire partner meeting, he was playing League of Legends at the same time,” Arora told The New York Times in April.

Arora has a master’s degree in mathematics and computer science from the Indian Institute of Technology, New York University and Stanford. Before joining Facebook (since renamed Meta), he held various roles at IV Capital and Goldman Sachs.

He founded his own venture fund called Toy Ventures, initially seeded with his own and his friends' capital, he said in an interview with Encode Club, a Web3 education channel. He said this business was built up gradually in an “ad hoc” fashion.

In that same interview, Arora said he thought of FTX as an exchange built for “crypto natives” and that part of his mandate was making it a friendly on-ramp for retail investors. This included “obfuscating” the things that make crypto hard, by improving its UX (user experience) and interface.

“Any friction in the process will have a huge drop-off,” he said, adding that he often listened to Crypto Twitter to get a sense of the products in which people would be interested, such as future non-fungible token (NFT) integrations. Compared with his time at Facebook, Arora said the speed of FTX’s product development was its “superpower,” he said.

“We can move on a dime,” Arora said, adding later that its “blockers” were “regulatory,” like figuring out the frameworks and licenses he would need to apply for to launch new services.

Arora is known for his intense work ethic, which may explain his close relationship with Bankman-Fried, who was known to have slept only five hours a day – often on a bean bag chair near his office desk. In the Encore interview, Arora talks about working 20-hour days and said he has decided with his wife that work should take precedence in their lives for the time being.

“It is not a balanced work-life balance,” he said.

Who is Dan Friedberg?

  • FTX’s chief compliance officer
  • A lawyer implicated in an online poker-cheating scandal

Daniel S. Friedberg was the chief compliance officer at FTX, the person who oversaw the then-second-largest cryptocurrency exchange’s compliance initiatives before it imploded. He joined the firm in March 2020.

Friedberg has also been tied to an online poker scandal in 2008, where Ultimate Bet’s founder Russ Hamilton was accused of installing a “God mode” on his gambling platform that only certain players had access to – resulting in an estimated $50 million in misappropriated funds.

In a surreptitiously recorded file, Friedberg reportedly advised Hamilton to claim he was a victim of the Ultimate Bets "God mode" scam, and push blame on an unnamed consultant to the company who exploited the site’s servers. The audio recordings were published in 2013 under uncertain circumstances and have not been independently verified by CoinDesk.

“I did take this money and I’m not trying to make it right, Dan, so we gotta get that out of the way right away, real quick,” Hamilton allegedly said in the audio recording. Hamilton also founded the World Champion online poker platform.

Veteran short seller Marc Cohodes, one of the few to publicly question the rapid rise of FTX before its fall in a September interview with trading-focused webcast Hedgeye, had noted the potential conflicts of hiring someone connected to a cheating scandal to oversee compliance at the $32 billion FTX exchange.

See also: Sam Bankman-Fried Switches Legal Counsel

In August, the Federal Deposit Insurance Corporation (FDIC) sent a letter to Friedberg and then-FTX US CEO Brett Harrison to “cease and desist” using marketing language that could have been erroneously interpreted as saying that exchange users accounts were ensured by the federal banking regulator.

Before joining FTX, Friedberg was a partner at Fenwick & West LLP, where he led the law firm’s cryptocurrency division, according to a now-deprecated LinkedIn page. He received a JD and MBA degree from the University of Wisconsin-Madison.

Who is Ryan Salame?

  • Co-CEO of FTX’s Bahamian subsidiary, FTX Digital Markets
  • A key player in FTX’s global licensing strategy
  • A restauranteur for Lenox hospitality

At press time, Ryan Salame is one of the few upper-level FTX executives who has not made attempts to delete his internet history. His Twitter and Linkedin accounts are still accessible, for instance, though they have yet to be updated to reflect he has left the firm.

Salame, a 2015 graduate from the University of Massachusetts–Amherst, was co-CEO of FTX Digital Markets, the Bahamas-based holding company for much of the crypto exchange’s global footprint. He also held a CPA license in Massachusetts that expired in 2018. He earned a master’s degree in finance from Georgetown University.

According to people speaking to the Wall Street Journal, Salame allegedly vomited after learning of the depths of deception at FTX, including how the firm’s inner circle misused and lost client funds. He told the WSJ he is not part of that inner circle.

Salame joined FTX in 2019 from the stablecoin issuer Circle Internet Financial, and before that served as a senior tax accountant at Ernst & Young (EY). On his LinkedIn page he claims to have assisted Bankman-Fried incorporate the recently built exchange as FTX Trading Ltd.

Before being appointed co-CEO of FDM, Salame had spent two years as Alameda Research’s head of OTC [over-the-counter] for the Asia-Pacific region, while based in Hong Kong.

Salame also apparently has ownership in a number of restaurants through a partnership with Lenox Eats. Among those is “a food truck with a flexible ‘pop up’ style menu” called Lunch Pail, which was expected to open in 2022.

Just as Bankman-Fried has become known for his political donations, Salame was also a mega-donor. He had donated $20,367,000 to Republican candidates in 2022, according to OpenSecrets. That makes him the 15th largest donor overall for this past U.S. election cycle.

Who Is Constance Wang?

  • The chief operating officer of FTX
  • A former compliance staffer at Credit Suisse
  • Appointed co-CEO of FTX Digital Markets

In the days since FTX exploded, Constance Wang has come under fire for her seeming lack of experience. Indeed, the National University of Singapore graduate – class of 2015 – has a fairly short resume: a Singapore-based Credit Suisse analyst turned business development lead at Huobi who caught the express train to wealth by joining FTX in 2019.

“Constance Wang, the COO of FTX, is an ex-Credit Suisse analyst with [two] years of experience in risk management. It was her first job out of university,” venture capitalist Ana Mostarac tweeted.

As chief operating officer, Wang said she was “primarily responsible for global user growth, partnerships, [public relations and] marketing, institutional clients servicing, and global expansion operations,” as written on her LinkedIn.

In January, 2022, Wang was appointed co-chief executive officer of FTX Digital Markets, the Bahamian licensing structure that held much of FTX’s businesses.

According to CoinDesk, Wang had lived in Sam Bankman-Fried’s 10-person crash pad in the Bahamas. She has since resigned from the company.

Who is Jen Chan?

  • The FTX chief financial officer
  • A hire from Bankman-Fried’s Hong Kong days
  • The full owner of an FTX subsidiary

Jen Chan was the chief financial officer of FTX – and perhaps the only direct report to Sam Bankman-Fried who had any direct work experience in the area of the business she oversaw.

Between 2003 and 2006, Chan was an assistant manager at KPMG, the auditing firm. She then had a multi-year stint at Blackstone, serving at a director level for its investing and accounting business.

Immediately before joining FTX, Chan was head of investment management company Alter Domus’ Hong Kong office, and had also spent time as an accountant in a division of Deutsche Bank called RREEF.

A native of Hong Kong, she attended the city-state’s prestigious Hong Kong University of Science and Technology. She joined Bankman-Fried’s empire in October 2018 as director of Cottonwood Grove Limited, a Hong Kong-based subsidiary of Alameda Research, which was then registered in the British Virgin Islands.

According to the Financial Times, Chan owned 100% of Salameda Ltd, a Hong Kong-based entity of FTX that looked like “a group outrider with links to Alameda entities by service agreements.”


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