Life After FTX: Bankman-Fried’s Employees Struggle to Move On

S E E D E D   C O N T E N T

A few weeks after FTX collapsed, Natalie Tien started crying in a New York City grocery store.

She was still in disbelief that the phenomenally successful crypto exchange where she had worked, often putting in 16-hour days, had imploded overnight. Its team of young, idealistic employees in the Bahamas had scattered. Her old boss, Sam Bankman-Fried, was facing a criminal investigation. Much of her net worth—at least $500,000 in FTX shares and various cryptocurrencies—had evaporated.

Tien, who led public relations for FTX and was also Bankman-Fried’s executive assistant, felt depressed for months. She attended his trial last fall in a bid for closure. She holds Bankman-Fried responsible for the catastrophic losses to FTX’s customers. But she was saddened when Judge Lewis Kaplan on Thursday sentenced him to 25 years in prison.

“He’s a brilliant person, and his talents could be better used elsewhere,” Tien said.

Former FTX employees have felt a mix of emotions about Bankman-Fried’s odyssey from crypto hero to federal prisoner. Some sympathized with the former FTX chief executive. Others, angry at the harm he caused, said he deserved to be punished.

Above all, FTX employees are still struggling to reconcile their memories of the company with the picture of a multibillion-dollar fraud painted by prosecutors and trial witnesses.

The Justice Department called FTX one of the biggest financial frauds in U.S. history. It accused Bankman-Fried of diverting customer funds to pay for luxury real estate, political donations and risky investments. Three members of his inner circle pleaded guilty to fraud and testified against him. In November, a jury convicted Bankman-Fried of seven counts of fraud and conspiracy.

“It’s like, what the hell was going on? It was not apparent at all from what I was seeing in the office,” said Can Sun, the former general counsel of FTX.

Sun, like the other former employees interviewed for this article, hasn’t been accused of wrongdoing and said he was in the dark about illegal activity at FTX. He said he only pieced together that Bankman-Fried’s crypto hedge fund, Alameda Research, had borrowed FTX customer funds on Nov. 7, 2022.

That day, as FTX was reeling from a flood of customer withdrawals, other FTX executives pulled Sun into a meeting about raising emergency funding, during which he learned that billions of dollars were missing. He later took a walk with Bankman-Fried around his elite Bahamas apartment complex. As they walked, the FTX chief asked if there were potential legal justifications for Alameda’s use of customer funds. Sun offered a few theoretical justifications, but stressed that they weren’t supported by the facts. He resigned the next day.

Sun finds it maddening that Bankman-Fried has never admitted to knowingly misappropriating customer funds, and has characterized the collapse of FTX as a failure of risk management, rather than a crime.

“When this whole thing happened, Sam was never straight with me or anyone else,” Sun said.

A spokesman for Bankman-Fried declined to comment. Speaking in court on Thursday, the former FTX chief apologized to his former colleagues. “I know a lot of people feel really let down, and they were right,” he said at his sentencing hearing.

Within weeks of the collapse of FTX, Sun was on a call with federal prosecutors. He later signed a nonprosecution agreement and testified against Bankman-Fried at the trial. Sun says he did nothing wrong, but agreed to the deal out of an abundance of caution, as he might have unknowingly approved deals involving misappropriated funds.

His ties to FTX initially dogged him as he worked to re-establish his legal career. The general counsel of one big crypto firm refused to meet with Sun, citing his FTX connection. Sun is now head of legal affairs and compliance for Backpack, a startup crypto exchange led by an ex-Alameda employee.

Bankman-Fried should face serious consequences as a deterrent to other white-collar criminals, said Sun, adding that he personally lost about $4 million in FTX’s collapse.