The political connections of FTX and its CEO Sam Bankman Fried. How deep does the rabbit hole go?

The eventful past week, with how the FTX fiasco transpired will become a pivotal moment in Crypto that most of us will never forget. Whoever survives it, can proudly say "I survived FTX week". It is the Enron / Madoff combined moment of the crypto industry. This article will part of a largest series detailing and explaining how the events unfolded.

Sam Bankman-Fried, the CEO of FTX Cryptocurrency Exchange, or SBF as people in the industry call him is a well connected Ivy-Leaguer who studied at MIT. He has been one of the major donors of Democratic Party Super PACs. In the 2022 midterms he donated more that $40 million for Democratic Party candidates, coming second only to multi-billionaire philanthropist George Soros for total value of dollars donated to the Democrats.

Sam was well connected not only with active lawmakers but also heads of states. During the FTX Bahamas event in April 2022 he had both Tony Blair (UK Prime Minister 1997-2007) and Bill Clinton (42nd President of the United States) flown to Nassau and join him on a panel discussion about how the World looks today and what the future holds. For a 30 years old MIT graduate running a 3 years old crypto exchange he was extremely well connected to elite circles.

The World Economic Forum (WEF) of Klaus Schwab had FTX listed as one of its partners giving it a perfect ESG score. After the downfall they rushed to scrub any mentions of FTX from the WEF website.

Now things will get a bit more interesting. Brace yourselves as the rabbit hole will go deeper!

Sam's parents are both law professors at Stanford. His father, Joseph Bankman is Professor of Law and Business noted as one of the leading scholars in tax law. By profession he is both a lawyer and clinical psychologist. In 2016, Joseph Bankman helped Democratic Senator Elizabeth Warren to draft a tax bill. Incidentally, Warren is one of the most anti-crypto voices in the US Senate seeking draconian and far reaching regulations for the industry, one of the most anti-crypto members of US Congress, to draft a tax bill.

His mother, Barbara Fried, another law professor is also a co-founder of Mind the Gap (MTG) a secretive Silicon Valley PAC that supports Democratic candidates. Through MTG she had directed donors to support the Center for Voting Information (CVI) and other get-out-to-vote organizations.

The second crucial person in the equation is Caroline Ellison.
Who is she some may ask and why she is important?

Caroline, is a 28 years old Stanford Maths grad. She is the CEO of Alameda Research. No, counterintuitively to what the name suggests it's not a research company but a quantitative trading firm. Alameda Research was founded by Sam. Like FTX it was headquartered offshore, this time not in Bahamas but Hong Kong. Alameda operated as a sister company to FTX to which the exchange in breach of its terms of service lent its customers' funds. Caroline, started as a trader and was moved to the role of CEO in 2021 when SBF decided to step down and focus more on FTX. She was also rumoured to be romantically involved with Sam in the past and was part of his inner circle.

Caroline Ellison's dad is Glenn Ellison, Department Head of Economics at MIT. Here things get spicy. SBF studied at MIT. You know who else is an Economics professor at NYT? Gary Gensler, the chair of US Government Securities and Exchange Commission (SEC). The one guy responsible for Crypto regulations. Basically in a sense Caroline's dad is the boss of Gensler at MIT.

Then, we have Ryne Miller. He is the General Counsel at FTX US as per his LinkedIn profile. He is an attorney and former Legal Counsel at the Commodity Futures Trading Commission (CFTC) during 2012 - 2013 when Gary Gensler served as chairman of CFTC. Gensler was meeting with SBF/FTX regularly during the past year (Miller was hired by FTX in 2021) in order to prepare market regulations for crypto.

Last, their network is so far reaching and influential that FTX appointed John J. Ray III as its new CEO as SBF's replacement. The veteran Wall Street bankruptcy lawyer will lead now the company's chapter 11 process. John Ray previously oversaw the bankruptcy of Enron and has a reputation for boosting creditor recoveries.

In the end, maybe everything is just a coincidence or maybe not. You decide.

PS: Stay Tuned for Parts 2, 3, 4, etc of the my series about the FTX Saga