The Fraud That Wore a Halo: Inside a $32 Billion Collapse
One of the biggest collapses in modern finance — and a masterclass in how image laundering replaces oversight.
Sam Bankman-Fried didn’t need to hide.
He testified before Congress. Donated millions to pandemic preparedness. Posed with presidents and prime ministers. He championed “effective altruism”—a movement about doing the most good for the most people—and made it the moral spine of his crypto empire.
FTX was a cryptocurrency exchange founded by Bankman-Fried in 2019. It allowed users to buy, sell, and trade digital assets like Bitcoin, and quickly became one of the largest platforms in the world—handling over $10 billion in daily volume at its peak.
FTX, in many ways, was his contribution to that vision. It wasn’t just a crypto exchange—it was a mechanism to generate billions that could be funneled toward global good. That pitch helped FTX grow into one of the world’s largest exchanges, boasting an active daily trading volume of over $10 billion and reaching a peak valuation of $32 billion.
And while the world praised the boy wonder in the t-shirt, FTX quietly became one of the most spectacular compliance failures in modern finance.
No meaningful KYC. No real separation between customer funds and trading operations. No governance that passed the most basic sniff test.
What SBF mastered wasn’t finance. It was image laundering. He turned good intentions into a reputational shield. And for a while, it worked.
Regulators hesitated. Investors fawned. Journalists swooned.
But here’s the thing: compliance doesn’t care about your TED Talk.
It doesn’t care how many conference stages you’ve stood on, or how many times you’ve said the word “ethics” into a microphone.
FTX wasn’t brought down by market forces or moral reckoning. It collapsed under the weight of what should have stopped it in the first place—controls, questions, and cash trails.
It is now considered one of the biggest financial frauds in history. In March 2024, Sam Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11.02 billion in forfeiture.
The Compliance Mirage
At its height, FTX was valued at $32 billion. Yet basic compliance protocols were missing:
KYC was inconsistent or non-existent
Customer funds were commingled with Alameda Research accounts
Internal accounting was a patchwork of spreadsheets
No CFO, no formal board oversight
Despite red flags, the firm operated across jurisdictions, processed billions in transactions, and gained the trust of blue-chip investors.
This wasn’t a loophole. It was a full-blown vacuum. And it allowed fraud to flourish behind the scenes of what appeared to be a high-integrity crypto exchange.
Reputation as a Risk Control
One of the most dangerous ideas in modern finance is that trust can substitute for compliance.
SBF positioned himself as the thinking man’s crypto founder. While others talked lambos, he talked global health and pandemic risk. He made it easy to believe in the narrative: the genius coder using his wealth to save the world.
And in doing so, he created a buffer zone where real questions were never asked.
Due diligence was minimal
Political donations bought access
Media coverage focused on personality, not policy
The result? Intentions became a stand-in for infrastructure.
The Global Double Standard
Here’s what stings: in many parts of Africa, Asia, and Latin America, small financial institutions face relentless scrutiny. Every remittance startup, mobile money provider, or cooperative bank is asked to prove its AML program, submit its audit trail, and justify every international payment.
Meanwhile, FTX—a Bahamas-based exchange with no coherent compliance framework—became the darling of Silicon Valley and Capitol Hill.
This isn’t just hypocrisy. It’s a reminder that wealth and charisma are still treated as due diligence proxies in much of the Western financial world.
The Dream vs. The Damage
It’s important to say this clearly: crypto holds real promise in emerging markets.
It can reduce cross-border fees, democratize access to financial tools, and help communities bypass institutions that have historically excluded them. It’s why people from Nigeria to Nepal are experimenting with stablecoins, decentralised lending, and crypto-powered savings.
But that dream dies when the most visible players turn out to be frauds. Because every collapse reinforces the myth that crypto is inherently lawless—instead of what it really is: a space still fighting for credible infrastructure.
FTX didn’t fail because crypto is broken.
FTX failed because compliance was never part of the build.
At Anqa, we don’t care how good your intentions are. We care how strong your controls are.
And we’ll keep building tools that make those controls accessible—to the institutions who need them most.