Before the world began to grasp the truth about Sam Bankman-Fried—before the panic, the investigations and, at last, the brutal collapse—an inkling of doom began to spread through his convoluted crypto empire. 

All across FTX, the exchange that had transformed his mere initials into a symbol of a new kind of wealth and power, one question came up again and again: Where is SBF?

Bankman-Fried, current and former employees say, seemed to have disappeared. Then, without explanation, a department nearly missed October payroll. Something was wrong.

Just how wrong is only now becoming blazingly clear. On Friday, after one of the most harrowing weeks in the young, freewheeling world of cryptocurrencies, his digital-asset empire—130-plus entities in all—spiraled into bankruptcy.

The scandal has shocked the crypto players who giddily celebrated Bankman-Fried as the J.P. Morgan of their times and left them grasping for parallels.

Is this crypto’s Lehman Brothers, a tale of unbridled risk? Or is it something darker: an Enron-style fiasco that could now expose rot and wrongdoing? Federal authorities are investigating just that.

As the Chapter 11 filings landed Friday morning, questions were piling up, including the big one: Will some 1 million FTX customers ever get their money back? Some traders sensed trouble long before and ran for the exits before everyone else. Big names in Silicon Valley who embraced Bankman-Fried seem certain to suffer humiliating losses.

By now many of the broad outlines are widely known. Bankman-Fried’s sinkhole of debt, blurred business interests and investigations into whether he misused customer funds. The unsteady assurance and the desperate race to raise money. The rivalry with Changpeng Zhao and Binance, which threw FTX a lifeline only to take it back a day later.

But interviews with more than a dozen employees, former workers and people with direct knowledge of FTX and its sister companies paint a picture even more dire than previously realized. Bankman-Fried, 30, with his perpetual bedhead, tube socks and pledge to give away his fortune had venture capital royalty, politicians and media personalities all fooled. 

And he might have fooled himself along the way, too. 

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Roughly two months before his unraveling, Bankman-Fried was having trouble with a question that for most people would be simple: Where do you live?

“I, uh, so, sorry, I—I’m hesitating because I mostly sleep on a bag,” he said, in apparent reference to his beanbag chair. Bankman-Fried was on a Zoom call, responding to questions from a group of reporters about the boundaries between FTX and Alameda Research, the crypto-trading firm that functioned as his family office.

“I live, I don’t know. Technically I live alone, but don’t sleep there. I mostly sleep on couches and beanbags,” he said. He was widely known to share a home in the Bahamas with roommates, including Alameda leadership.

Left unsaid back then: there were few boundaries between the two companies. Bankman-Fried at times dated Alameda CEO Caroline Ellison, 27, crypto news site CoinDesk reported this week, citing people familiar with the matter.

An FTX spokesperson could not be reached for comment.

The ties between FTX and Alameda are at the heart of Bankman-Fried’s downfall. The US Securities and Exchange Commission is investigating how closely intertwined his businesses were and whether FTX mishandled customer funds.

The two companies played different roles: FTX was for trading, allowing customers to deposit funds and buy more than 300 tokens, using big loans to make larger, higher-risk bets. 

Hey @GiseleOfficial @StephenCurry30 @Trevorlawrencee @mlb @kevinolearytv @LCSOfficial @MiamiHEAT @riotgames @TSM @stoolpresidente, you in? @ftx_official #FTXyouin
— Tom Brady (@TomBrady) September 8, 2021

It was also Bankman-Fried’s brand. FTX’s logo was plastered on a Miami arena and patched on the uniforms of MLB umpires. It had star power: Gisele Bundchen and NFL quarterback Tom Brady held equity stakes and appeared in its Super Bowl ad, where they encouraged a cast of characters to join the fold of digital assets with a two-word question. 

“You in?”

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