>>> UP NEXT, TO THE TRIAL OF SAM BANKMAN-FRIED, THE FORMER CRYPTO WONDER KID AND CEO OF THE NOW BANKRUPT CRYPTOCURRENCY EXCHANGE, FTX, IS TAKING SEVERAL CRIMINAL CHARGES OF FRAUD AND MONEY LAUNDERING.

WHEN HIS EMPIRE CAME CRASHING DOWN LAST YEAR, MILLIONS OF PEOPLE WERE LEFT EMPTY-HANDED AND INVESTORS LOST BILLIONS.

PROFILED BANK BEEN FREED AND HIS FAMILY FOR THE NEW YORKER AND JOINS US TO DISCUSS HER REPORTING.

>> THANKS SO MUCH FOR JOINING US.

>> IT IS GREAT TO BE HERE.

>> YOU SPENT TIME WITH SAM BANKMAN-FRIED, ALSO KNOWN AS SPF, HIS TRIAL IS NOW STARTING, AUDIENCE WHO MIGHT NOT KNOW ALL OF THIS, WHAT IS HE CHARGED WITH, WHAT IF YOU FACING?

>> SAM OWNED TWO COMPANIES THAT WERE VERY INTERCONNECTED, SO ONE WAS CALLED ALAMEDA RESEARCH.

IT WAS BASICALLY A HEDGE FUND VANISHING A PRIVATE POOL OF MONEY , INVESTING ALMOST EXCLUSIVELY IN CRYPTO RELATED THINGS , YOU KNOW, TOKENS, CURRENCIES, CRYPTO COMPANIES .

AND THE OTHER COMPANY WAS CALLED FTX, AND THAT WAS AN EXCHANGE WHERE PEOPLE COULD SEND ORDERS TO BUY OR SELL O.R.

BORROW CRYPTO ASSETS AND THEY WOULD TRADE ON THAT EXCHANGE.

AND CUSTOMERS WOULD COME TO FTX , THEY WOULD OPEN AN ACCOUNT THERE, THEY WOULD DEPOSIT A BUNCH OF MONEY JUST LIKE YOU WOULD AT EáTRADE OR CHARLES SCHWAB OR FIDELITY AND THEY WOULD PLAN TO USE THAT MONEY TO BUY OR SELL BIT GOING FOR ETHERIUM OR THE DOZENS OF OTHER CRYPTO TOKENS THAT WERE TRADING AT THE TIME.

AND HE IS BASICALLY ACCUSED OF TAKING THAT CUSTOMER MONEY AND USING IT FOR OTHER THINGS , MOSTLY HAVING TO DO WITH OTHER PARTS OF THE COMPANY , WITHOUT THE EXPLICIT PERMISSION OF THOSE CUSTOMERS.

AND THE GOVERNMENT IS REALLY ALLEGING THAT THIS WAS GOING ON FROM THE TIME FTX WAS LAUNCHED , WHICH WAS IN 2019.

THEY ARE SAYING THAT FROM THAT TIME, UNTIL IT WENT UNDER LAST FALL/WINTER , HE WAS MISUSING AND MISHANDLING CUSTOMER FUNDS.

>> GIVE US AN IDEA OF HOW HIGH THE HIGHS WERE FOR FTX AND FOR SAM BANKMAN-FRIED.

THIS IS A COMPANY THAT TOOK OUT SUPER BOWL ADS.

HAD ENORMOUS CELEBRITY ENDORSEMENTS.

AND WHAT WAS IT WORTH AT ITS PEAK?

>> IT WAS ALLEGED TO BE WORTH $32 BILLION OR THEREABOUTS DEPENDING ON WHO YOU ASK AND YOU KNOW, SAM HIMSELF APPEARED ON THE COVER OF FORBES AND FORTUNE AND HE WAS DECLARED THE NEXT WARREN BUFFETT AND THE YOUNGEST MULTIBILLIONAIRE , ONE OF HIS INVESTORS SAID PUBLICLY IN A PROFILE PUBLISHED HE MIGHT BE THE FIRST BILLIONAIRE THE WORLD HAS EVER SEEN .

INVESTORS WERE FIGHTING TO INVEST IN THE COMPANY, IT WAS LIKE THIS ROCKETSHIP, IT WILL BE THE NEXT FACEBOOK.

HE ULTIMATELY RAISED TWO MEN DOLLARS FROM VENTURE CAPITAL INVESTORS.

VERY EXPERIENCED GROWN-UPS WHO SHOULD KNOW RED FLAGS WHEN THEY SEE THEM.

DID NOT PAY ATTENTION.

AND YES, HE WAS BENDING LAVISHLY ON SUPER BOWL ADS, CELEBRITY ENDORSEMENTS , GENERAL MARKETING, TRYING TO BRING MORE PEOPLE INTO TRADING AT FTX.

>> YOU ALSO GOT VERY INVOLVED IN POLITICAL CONTRIBUTIONS, RIGHT?

>> HE DID , AND THERE IS SOME CONFUSION AROUND EXACTLY WHAT HE WAS TRYING TO DO POLITICALLY.

HE SPENT A LOT OF TIME ON CAPITOL HILL MEETING WITH MEMBERS OF CONGRESS, THEIR STAFFS, REGULATORS , OSTENSIBLY TRYING TO EDUCATE THESE PEOPLE ABOUT CRYPTO AND WHY IT SHOULD BECOME A FULLY LEGALIZED IN THE UNITED STATES, WHICH IT STILL IS NOT , HE REALLY HE SAID THAT HE WANTED TO BRING LEGITIMACY TO THIS INDUSTRY.

AND SO THAT WAS A BIG PART OF HIS POLITICAL ACTIVITY.

THE PART OF HIS POLITICAL ACTIVITY INVOLVED FUNDING PEOPLE WHO HE FELT WOULD HELP UPHOLD DEMOCRACY DURING THE ERA FOR PRESIDENT AND EVEN AFTER HE BECAME PRESIDENT THERE WERE A LOT OF CONCERNS ABOUT DEMOCRATIC INSTITUTIONS, SO HE DID FUND SOME CANDIDATES IN THAT REALM, AND THEN THE LAST SORT OF BUCKET WAS PHILANTHROPIC ORIENTED POLITICAL GIVING WHERE HE WAS GIVING MONEY TO CANDIDATES WHO HE HOPED WOULD PURSUE CAUSES IN CONGRESS THAT HE THOUGHT WERE IMPORTANT TO THE FUTURE OF HUMANITY.

>> PART OF THIS ETHOS THAT YOU MENTIONED, YOU WRITE ABOUT EFFECTIVE ALL TOURISM.

SOMETHING THAT SAM BANKMAN-FRIED WAS A FOLLOWER OF THIS IDEA.

EXPLAIN THAT FOR US.

>> EFFECTIVE ALL TOURISM IS REALLY INTERESTING PHILOSOPHICAL MOVEMENT.

IT IS REALLY BASED AROUND THE WORK OF PETER SINGER, AN AUSTRALIAN PHILOSOPHER WHO HAS RECENTLY RENOUNCED, ANNOUNCED HIS RETIREMENT FROM PRINCETON.

HE WROTE SOME VERY THOUGHTFUL , THOUGHT-PROVOKING THINGS ABOUT QUESTIONS OF MORAL RESPONSIBILITIES.

SO IF WE ARE HERE IN THE WEST BUYING THINGS THAT WE DON'T NEED, BUYING SHOES AND FLATSCREEN TVs, TAKING CABS, WE DON'T NEED THOSE THINGS .

AND THERE ARE PEOPLE IN OTHER PLACES STARVING BECAUSE THEY CANNOT BUY FOOD.

HE BASICALLY SAID WE SHOULD BE CONTRIBUTING THAT MONEY THAT WE ARE RESPONSIBLE, WE ARE CONTRIBUTING TO THAT SUFFERING.

SO THIS MOVEMENT CALLED EFFECTIVE ALTRUISM, IT SEEMED TO REALLY BECOME VERY POPULAR WITH A LOT OF YOUNG PEOPLE WHO UNDERSTANDABLY WERE DISAFFECTED WITH THE WORLD AND THE IMPOTENCE OF OUR POLITICAL INSTITUTIONS TO TACKLE SERIOUS EXISTENTIAL PROBLEMS THAT WE HAVE.

POVERTY , INEQUALITY, CLIMATE, SO ON.

APPEALED TO A LOT OF PEOPLE WITH QUANTITATIVE MATTHEY INTERESTS.

SO A LOT OF THESE YOUNG PEOPLE WERE ENCOURAGED TO GO OUT INTO THE WORLD , EARN AS MUCH MONEY AS THEY COULD, PURSUE HIGH- PAYING JOBS, AND GIVE AWAY ALL OF THE MONEY THAT THEY DIDN'T REALLY NEED TO SURVIVE TO SAVE LIVES IN OTHER PLACES.

AND IS A VERY INTERESTING PHILOSOPHY BUT THERE WERE SOME REAL WEAK SPOTS BECAUSE IT SEEMED TO ENCOURAGE PEOPLE TO EARN MONEY DOING ALL SORTS OF QUESTIONABLE THINGS BUT THE ENDS JUSTIFY THE MEANS BECAUSE THEY WERE GOING TO GET THE MONEY AWAY IT DIDN'T MATTER THAT THEY WERE WORKING IN THIS DUBIOUS INDUSTRY OR THAT THEY WERE WORKING ON WALL STREET WHEN THEY COULD'VE BEEN WORKING IN PUBLIC HEALTH OR IN EDUCATION, HELPING PEOPLE DIRECTLY.

THEY WERE EARNING TO GIVE THAT WAS THE PHILOSOPHY.

>> ADDING TO THE INTERESTING LAYERS OF THIS STORY IS WHERE SAM BANKMAN-FRIED COMES FROM .

I MEAN, HIS FAMILY, HIS DAD OR HIS MOM ARE RESPECTED INTELLECTUALS AT STANFORD.

TELL US ABOUT THAT, YOU GOT TO SPEND SOME TIME WITH THEM.

>> HIS PARENTS ARE BOTH VERY INTERESTING, ACCOMPLISHED PEOPLE , THEY ARE BELOVED ON THE STANFORD CAMPUS.

THEY ARE BOTH PROFESSORS AT STANFORD LAW SCHOOL.

VERY STEEPED IN THE CULTURE OF STAMFORD.

THEY , FOR DECADES, HAVE HAD THESE INFORMAL SUNDAY NIGHT DINNERS WHERE OTHER FACULTY MEMBERS AND GUESTS WOULD SHOW UP AT THEIR HOME AND THEY WOULD JUST HAVE A BIG MEAL AND DRINK WINE AND TALK ABOUT ALL SORTS OF THINGS FROM DEMOCRACY TO ANCIENT GREECE TO MOVIES AND POLITICS.

SO SAM AND HIS BROTHER, THEY GREW UP IN THAT ENVIRONMENT.

THEY WERE ASKED THOSE DINNERS , YOU KNOW, THEY LOVED TALKING WITH ADULTS FROM AN EARLY AGE, ALMOST MORE THAN THEY COULD RELATE TO OTHER KIDS AND ONE THING SAM'S PARENTS SAID WHEN I WAS RECORDING MY NEW YORKER ARTICLE WAS THAT SAM SEEMED SO INTELLECTUALLY PRECOCIOUS , THEY SPENT A LOT OF TIME AND ENERGY TRYING TO MAKE SURE THAT HE HAD ADEQUATE INTELLECTUAL STIMULATION.

THEY SOUGHT OUT SPECIAL MATH CLASSES, THEY SENT HIM TO SUMMER CAMP IN HIGH SCHOOL, YOU HAD TO DO A REALLY DIFFICULT TEST TO GET INTO.

AND THEY REVERED HIM THEY REALLY DID.

THEY THOUGHT HE WAS BRILLIANT AND MY SENSE IS THAT THEY DID NOT QUESTION HIS DECISIONS.

HE MADE HIS OWN DECISION, HE PURSUED HIS OWN PATH .

ALTHOUGH THEY CERTAINLY HELPED HIM WHEN THEY COULD , THEY DID NOT INTERVENE.

PERHAPS ULTIMATELY THEY SHOULD HAVE INTERVENED, MARK.

>> IT IS INTERESTING BECAUSE YOU POINT OUT THAT HIS FATHER TOOK A LEAVE OF ABSENCE FROM HIS VERY RESPECTED JOB AT STANFORD TO GO TO WORK FOR HIS SON, AND THE FATHER'S RESEARCH AND TESTIMONY IN FRONT OF CONGRESS TALKS ABOUT TAX HAVENS AND HOW TO CLOSE TAX LOOPHOLES.

BUT HERE HE IS, SITTING IN THE BAHAMAS , WITH HIS SON.

>> SAM'S FATHER IS A VERY WELL RESPECTED EXPERT ON TAX LAW.

SO WHEN FTX WAS STARTING OUT, IT WAS IN, IT WAS INITIALLY IN HONG KONG AND IT MOVED TO THE BAHAMAS.

ALL SORTS OF TAX QUESTIONS AND OTHER LEGAL QUESTIONS.

SO SAM'S DAD WAS ROLLED UP HIS SLEEVES AND WAS HELPING OUT AS MUCH AS HE COULD.

OVER TIME HE BECAME MORE INVOLVED.

AS THE COMPANY BECAME SO SEEMINGLY SUCCESSFUL , WAS PLEDGING TO GIVE AWAY BILLIONS OF DOLLARS THROUGH A FOUNDATION THAT FTX STARTED.

HE HAD ULTIMATELY ATTRACTED HIS DAD TO TAKE TIME OFF FROM HIS JOB THAT HE LOVES AT STANFORD, AND MOVED TO NASSAU AND HELP FIGURE OUT HOW TO FIND WORTHY, CHARITABLE PROJECTS TO INVEST THIS FTX PHILANTHROPIC MONEY INTO.

TO HIM I THINK, AT THE TIME, IT WAS SORT OF A DREAM JOB BECAUSE WHO WOULDN'T LIKE TO GIVE AWAY A LOT OF MONEY TO WORTHY CAUSES?

SO HE EMBRACED IT.

>> YOU WRITE THAT HIS MOM IS LITERALLY THE EXPERT ON ETHICS, AND SHE IS SOMEBODY THAT PEOPLE ALL OVER THE WORLD REQUEST AND I WONDER , IN YOUR CONVERSATIONS WITH HER , DID YOU GET A SENSE THAT SHE EVER QUESTIONED THE ETHICS OF HER SON?

DID SHE EVER SEPARATE OUT THE FACT THAT SHE HAS THIS MATERNAL INSTINCT TO WANT TO PROTECT HER CHILD?

VERSUS WHAT SAM HAS BEEN ACCUSED OF ?

>> THAT IS A REALLY REMARKABLE THING ABOUT THE FAMILY DYNAMIC, THE PORTRAIT PAINTED OF SAM BY THE PROSECUTORS AND EVEN BY THE BANKRUPTCY LAWYERS TRYING TO SORT THROUGH THE COMPANY NOW IS SO DIFFERENT FROM THE ONE THAT SAM HIMSELF PORTRAYED AND THAT HIS FAMILY HOLDS OF HIM.

AND ONE OF THE MOST REMARKABLE MOMENTS, FOR ME, REPORTING ON THIS, WAS WHEN I ASKED SAM'S MOM, BARBARA, WHO IS A VERY VERY SMART RIGOROUS THINKER , IMPRESSIVE WOMAN, I ASKED HER DID YOU READ THIS INDICTMENT AND HAVE TO KIND OF GO TO HIM AND SAY SAM, DID YOU DO ANY OF THESE THINGS?

WHAT IS THE GOVERNMENT ACCUSING YOU UP?

HOW CAN YOU SING THIS?

SHE SAID NO SHE NEVER EVEN HAD TO GO AND ASK HIM ABOUT IT.

SHE JUST KNEW, SHE KNEW HIS CHARACTER, SHE KNEW HE WOULD NEVER INTENTIONALLY STEAL MONEY OR DEFRAUD ANYONE, AND I DID FIND THAT SHOCKING BUT SHE SAID NO, AND SHE VERY FIRMLY BELIEVES THAT HE IS INNOCENT, THAT HE COULD HAVE SORTED ALL OF THIS OUT IF HE HAD GIVEN A LITTLE MORE TIME TO KIND OF SELL SOME ASSETS, COULD PAYBACK HIS CUSTOMERS, EVERYTHING WOULD HAVE BEEN FINE.

OF COURSE, LEGALLY BIG QUESTION ABOUT WHETHER, IF HE HADN'T DONE THAT WHETHER THAT WOULD HAVE MEANT HE HAD NOT COMMITTED A CRIME.

CERTAINLY MANY PEOPLE THAT EVEN IF YOU MANAGE TO PAY THE CUSTOMERS BACK IN THE END, HAVING DONE SOMETHING WITH THEIR MONEY THAT THEY WEREN'T EXPECTING IS WRONG.

THAT IS A WHOLE DIFFERENT MATTER.

SHE IS CONVINCED .

AND IT SEEMS LIKE AN EXAMPLE OF, IN A WAY, THE STORY FOR ME WAS AN EXAMPLE OF THE POWER OF MATERNAL LOVE AND DEVOTION BECAUSE SHE DOES NOT SEEM TO BE IMPLYING THE ETHICAL RIGOR AND ANALYSIS THAT SHE DOES TO MOST THINGS IN HER LIFE TO HER SON.

>> I WONDER RIGHT NOW, PARENTS ARE NOT CRIMINALLY CHARGED WITH , THERE ARE CIVIL LAWSUITS AGAINST FTX, RIGHT?

>> THEY ARE DEFINITELY NOT OUT OF LEGAL PERIL.

FOR STARTERS, IT'S NOT UNCOMMON FOR GOVERNMENT PROSECUTORS WHO HAVE AN ENORMOUS AMOUNT OF PRESSURE THEY CAN WIELD ON PEOPLE TO USE FAMILY MEMBERS AS LEVERAGE ON DEFENDANTS.

EITHER EXPLICITLY OR INDIRECTLY.

AND IT IS NOTABLE THAT JUST A FEW DAYS BEFORE AND SAM BANKMAN- FRIED'S TRIAL STARTED THE BANKRUPTCY STATE FILED A HUGE LAWSUIT AGAINST HIS PARENTS WHERE THEY HAVE HAD ALMOST A YEAR TO JUST MINE ALL THEIR PERSONAL EMAILS, THEY PRINTED ALL SORTS OF SALACIOUS STUFF, PARTLY INTENDED TO REALLY INTIMIDATE THEM RIGHT BEFORE THIS TRIAL EVEN THOUGH THEY MADE SOME VALID POINTS.

AND IN COURT , IN LOWER MANHATTAN, THE PROSECUTOR DID SAY THAT SAM'S PARENTS , JOE AND BARBARA, AND HIS BROTHER, GABRIEL, COULD BE CALLED AS WITNESSES.

THEY WERE INCLUDED ON A LONG LIST OF POTENTIAL WITNESSES SO WE WILL HAVE TO SEE IF THAT ACTUALLY HAPPENS, OBVIOUSLY THAT WILL BE A REALLY TRICKY POSITION FOR THEM .

BUT I THINK WE WON'T KNOW UNTIL SAM'S TRIAL IS OVER.

MORE WHAT LIES IN STORES FOR HIS PARENTS.

>> I WONDER IF , HOW MUCH OF THIS IS THE GOVERNMENT TRYING TO MAKE AN EXAMPLE OUT OF SAM BANKMAN-FRIED?

>> WHAT FTX WAS DOING WAS PRETTY MUCH OUT IN THE OPEN.

I THOUGHT IT WAS INTERESTING THAT IN SOME COURT FILINGS THE NEW CEO OF FTX DESCRIBED FTX BEFORE THE COLLAPSE AS A DUMPSTER FIRE.

HE SAYS OH IT WAS JUST LIKE A DISASTER.

WELL, IF THAT IS THE CASE, WHY DID SOMEONE PICK UP ON THAT SOONER?

WHY DID GOVERNMENT REGULATORS NOTICE IF IT WAS SUCH A THREAT TO AMERICAN INVESTORS ?

WHY DID THE S.E.C.

DO SOMETHING?

WHY DID THEY WAIT UNTIL THIS HUGE BUBBLE BLEW UP IN THIS INDUSTRY?

AND THEN ONE AFTER THE OTHER THESE THINGS COLLAPSED LIKE A BUNCH OF DOMINOES, CREATE ALL THIS FINANCIAL DESTRUCTION .

OFTEN ARE EXPOSED BY REPORTERS, FRANKLY.

CHARGE EVERYBODY, IT LEAVES ME WONDERING WHY DIDN'T YOU BECOME A LITTLE MORE PROACTIVE SOONER?

>> YOU'RE RIGHT THAT SAM BANKMAN-FRIED IS BASICALLY , WAS AT HIS HOME WORKING ON HIS DEFENSE.

HE MAINTAINS HIS INNOCENCE THROUGH ALL THIS?

>> HE MAINTAINS HIS INNOCENCE.

AND FROM WHAT I CAN TELL, IT IS SINCERELY HELD.

HE IS ADAMANT THAT HE DID NOT INTENTIONALLY DEFRAUD ANYONE OR DO ANYTHING HE THOUGHT WAS IMPROPER.

HE SEEMS TO STILL THINK HE CAN EXPLAIN THAT TO A JURY AND EXPLAIN THAT TO THE WORLD AND MAKE EVERYONE UNDERSTAND THIS WAS AN INNOCENT MISTAKE, HE WAS MAYBE IN OVER HIS OWN HEAD.

BUT THAT HAS BEEN HIS POSITION FROM THE BEGINNING.

AND IT IS REMARKABLE BECAUSE WE RARELY SEE A TRIAL , A CASE LIKE THIS .

THIS SCALE GO TO TRIAL, USUALLY DEFENDANTS END UP PLEADING GUILTY BECAUSE A TRIAL IS AN EXCRUCIATING EXERCISE , THE ODDS ARE AGAINST YOU.

AND HE HAS FORGED AHEAD INTO AN ABSOLUTELY CHALLENGING SITUATION WHERE HE IS GOING TO BE THERE LISTENING DAY AFTER DAY TWO PEOPLE SAYING HE DID TERRIBLE THINGS.

>> WHAT DO YOU MAKE OF THAT?

>> HE HAS SPENT HIS ENTIRE LIFE BEING TOLD THAT HE IS INTELLECTUALLY , COGNITIVELY SUPERIOR TO MOST PEOPLE.

HE WAS RAISED THAT WAY, HE WAS ALWAYS TOLD HE WAS SPECIAL AND BRILLIANT, HE WAS GIVEN ALL THESE OPPORTUNITIES.

HE WAS ALLOWED TO NOT DO THINGS HE DIDN'T WANT TO DO AND FOCUS ON CULTIVATING HIS BRAIN.

AND EVEN WHEN HE WAS RUNNING HIS BUSINESS, PEOPLE WOULD TELL ME STORIES, HE WOULD END UP IN MEETINGS ABOUT SOME PARTICULAR EXAMPLE BUSINESS AREA WITH A BUNCH OF EXPERTS, AND HE WOULD VERY QUICKLY BONE UP ON THE TOPIC AND SUDDENLY IT SEEMS LIKE MORE THAN ALL THE EXPERTS.

WHAT THAT IS ACTUALLY TRUE , YOU KNOW, I'M A LITTLE SKEPTICAL BUT HE REALLY THINKS HE KNOWS BEST.

AND IT IS HARD TO SEE, GIVEN WHAT HE IS FACING , THAT IT WILL GO THE WAY HE HOPES.

BUT WE WILL SEE.

>> STAFF WRITER FOR THE NEW YORKER, SHEILA, THANKS SO MUCH FOR JOINING US.

>> THANKS.