Is there no end to his arrogance? FTX boss Sam Bankman-Fried inflated crypto dubbed ‘Samcoins’
Disgraced crypto boss Sam Bankman-Fried has been accused by insiders of artificially inflating the price of new digital currencies dubbed ‘Samcoins’.
The 30-year-old FTX boss reportedly wooed the developers of new coins and encouraged them to make their trading debut on his exchange platform, reports the New York Times.
Sister company Alameda Research would then buy up the freshly-listed currency to raise its value while Bankman-Fried used his influence in the crypto world to drum up interest and attract further investors.
The strategy allowed Alameda – which was run by Bankman-Fried’s ex-girlfriend Caroline Ellison, 28 – to look much healthier than it was prior to its implosion in November.
Disgraced crypto boss Sam Bankman-Fried, pictured, is accused of using the ‘pump and dump’ strategy to attract interest in new cryptocurrencies which insiders have come to label ‘Samcoins’
Some of the crypto coins Alameda Research bought up included ‘Maps’, logo left, and ‘Serum’, right, – both of which have now been dubbed ‘Samcoins’ by insiders
It has been likened to the classic ‘pump and dump’ technique, prevalent in the stock market, whereby fraudsters buy up near-worthless shares aggressively.
At the same time they spread false or misleading information to other investors to ‘pump up’ its price before selling on the stocks for profit.
The strategy is illegal in the US.
Bankman-Fried, who is famed for his scruffy appearance and often photographed in shorts and a t-shirt, is facing eight fraud charges in relation to his handling of FTX and Alameda.
He is accused of defrauding investors and diverting billions of dollars in FTX customer money to his hedge fund which he then used as a piggy bank to fund his lavish lifestyle, personal investments and political donations.
If convicted, he could be jailed for up to 115 years.
Bankman-Fried, pictured in a court sketching at his bail hearing, used ‘Samcoins’ to make both his businesses appear more profitable before they came crashing down in November
Critics questioned how Ellison, 28, landed the role as Alameda CEO given her limited experience
Since the scandal unfolded, questions have been raised as to how the two businesses were able to keep going for so long and attract so many investors.
Now insiders say his promotion of so-called ‘Samcoins’ were a crucial part of Bankman-Fried’s aggressive trading practices.
The tactic successfully pushed up the price of coins called ‘Serum’ and ‘Maps’ along with FTT, a currency he created himself.
Alameda and FTX would then use these investments as collateral for loans, according to court records and crypto insiders.
Bankman-Fried, right, and Ellison,left, lived together in a $40 million penthouse at the southern tip of New Providence, the main island in the Bahamas.
Graham Friedman, director at digital asset strategy company Republic Crypto, told the New York Times: ‘It was any project whose value propositions was reliant on FTX and their success.’
Alameda was formerly run by Bankman-Fried’s ex-girlfriend Caroline Ellison, 28.
She was installed as CEO of the multibillion dollar hedge fund in October 2021 despite her limited professional trading experience.
The couple lived in a $40 million penthouse at the southern tip of New Providence, the main island in the Bahamas.
Last month DailyMail.com uncovered the first photo of Sam Bankman-Fried and Caroline Ellison from March 2021 in Hong Kong celebrating FTX boss’ 29th birthday
Ellison has yet to address the scandal and has not tweeted since November 9.
Meanwhile Bankman-Fried has repeatedly denied accusations that he tried to manipulate cryptocurrency markets, insisting he only ever wanted to make money to do good.
He has previously claimed his efforts to bolster the price of FTT can be compared to share buyback schemes at public companies.
He continues to loudly defend himself on Twitter and blogging site Substack, often against his lawyers’ advice, insisting he could have made FTX solvent again had he been given the chance.
Last month he was pictured being escorted out of court in New York after being freed on $250 bail by lawyer Jimmy Harkins, a former private investigator who has worked for Ghislaine Maxwell.
Bankman-Fried’s former friend Scaramucci, right, recently lamented his dealings with the FTX boss, claiming he had thought of him as the ‘Mark Zuckerberg of crypto’
His bail has been called the largest pre-trial amount in US history and 25 times the $10million posted by Bernie Madoff, the late Ponzi schemer.
Earlier this week his former business partner and friend Anthony Scaramucci launched a scathing attack on the FTX boss.
Speaking at a panel at the World Economic Forum in Davos, Scaramucci revealed how he had been taken in by Bankman-Fried, who he believed was like Facebook founder Mark Zuckerberg.
He said: ‘I had a close relationship with [Bankman-Fried], I considered him a friend.
‘I felt close to him, I felt close to his family so I have to tell you that the betrayal and fraud—it’s bad on a lot of different levels. It certainly hurt me reputationally.’
He added: ‘If anybody here has read Dante Alighieri’s Inferno, you know what the ninth circle of Hell is reserved for.
‘It’s for the betrayal of a friend who lives with the devil—the ninth circle of hell on the frozen lake.
‘When you have a friend that betrays you like that it really sucks.’
Their first business dealing was in October 2021 and by September 2022, Bankman-Fried’s FTX Ventures had bought a 30 percent stake in Scaramucci’s SkyBridge Capital, worth around $45 million.
The deal was done just two months before FTX filed for bankruptcy.
At the time Scaramucci called his business partner a ‘visionary’.
But on Wednesday he told the panel: ‘There was a gentleman walking around – 24, 25 years old, he had a hoodie and a t-shirt on and his name was Mark Zuckerberg.
‘People looked at him and said ‘what the hell?’ and he turned out and he went from zero to a trillion dollars.
‘I thought Sam was the Mark Zuckerberg of crypto, I did not think he was the Bernie Madoff of crypto okay and I got it wrong.’
