The FTX Five 5️⃣
The great heist story has that perfect crew - the visionary, the tech whiz, the numbers genius, the inside man, and the political connector. But this isn't Ocean's Eleven. It's history.
Hello, y'all. This Sunday we track the FTX folks, the story that’s lived one US Presidential Election to another. To November beginnings 🍻 Happy Sunday.
FOMO about missing out on Coldplay live? Play Muzify quiz to score the concert ticket. It’s got over 2 million plays, are you on the board yet?👇
"Every villain is a hero in his own mind." — Tom Hiddleston
Sam Bankman-Fried, once the king of crypto, now shares a dormitory with Sean "Diddy" Combs in Brooklyn's Metropolitan Detention Center.
About twenty inmates occupy this special security area, reserved for high-profile defendants who need protection.
It's a far cry from his $35 million Bahamas penthouse.
But then again, nothing about the FTX saga has gone according to anyone's plans.
Well, almost anyone's. Some of his former colleagues might disagree.
The tale of crypto's biggest collapse isn't just about missing billions — it's about five former friends and colleagues whose paths diverged dramatically in the face of justice.
Their story reads like a prestige HBO drama, complete with betrayal, romance, cooperating witnesses, and very different final acts.
The rise before the fall
They seemed unstoppable. Five brilliant minds from America's top universities, building what appeared to be the future of finance.
The team had everything: SBF's vision, Wang's technical brilliance, Ellison's trading expertise, Singh's engineering prowess, and Salame's political connections.
Their backgrounds were impeccable.
Sam Bankman-Fried: MIT grad, Jane Street trader, effective altruist
Gary Wang: MIT grad, Google engineer, SBF's high school friend
Caroline Ellison: Stanford grad, Jane Street trader, math prodigy
Nishad Singh: MIT grad, Facebook engineer, coding virtuoso
Ryan Salame: Master's in finance, traditional banking background
Together, they built a $32 billion empire in less than three years.
FTX was everywhere: Super Bowl ads, baseball stadiums, Formula 1 races. They donated to politicians, funded research, and promised to give away billions to save humanity.
The only problem? It was all built on a lie.
The house of cards
The truth began emerging in November 2022.
FTX wasn't just commingling customer funds with its trading arm, Alameda Research — it had built an entire system to do so automatically.
Wang had created a special backdoor in FTX's code, allowing Alameda to withdraw unlimited funds without triggering normal safety checks.
The numbers if you remember
$8 billion in missing customer funds
$65 billion in peak daily volume
5 million registered users
1 million active traders
All gone in a week
When the dust settled, prosecutors found a web of deception
Customer funds used for luxury real estate
Political donations through straw donors
Venture investments made with stolen money
Personal loans to executives
Artificial token prices maintained through wash trading
But perhaps most fascinating was how differently each player responded when the music stopped.
The Home for All the Music Lovers
Muzify - With over 2 million quiz plays, is more than just a platform.
It's a journey into the world of music.
It provides an interactive experience through quizzes and exploration tools. For artists it’s a powerful tool for artists to connect with their fans.
Through custom quizzes artists can engage their audience, receive direct feedback, and build a loyal following eagerly anticipating their next release.
The platform offers a direct line to fans, fostering a sense of connection that goes beyond mere listening.
The cooperation game
As federal investigators closed in, the inner circle faced a classic prisoner's dilemma.
Who would talk first? Who would stay loyal?
The results were revealing.
Caroline Ellison: First to flip
Began cooperating within weeks
Provided crucial evidence about SBF's direct involvement
Detailed how customer funds were misused
Revealed private conversations and decisions
Sentence: 2 years
Read: Caroline speaks up 🔈
Nishad Singh: The late arrival, early cooperator
Discovered the fraud in September 2022
Immediately cooperated after charges
Provided technical details about systems
Helped trace fund movements
Sentence: No prison time
Gary Wang: The technical truth-teller
Admitted creating the backdoor code
Explained technical aspects of the fraud
Testified about SBF's direct instructions
Awaiting sentencing (November 20)
Read: Wang spills the beans 🙊
Ryan Salame: The partial cooperator
Pleaded guilty but didn't testify
Tried to withdraw guilty plea
Claims prosecutors promised to leave his partner alone
Bitter about others' lighter sentences
Sentence: 7.5 years
Sam Bankman-Fried: The holdout
Maintained innocence throughout
Testified in his own defense
Blamed others for mismanagement
Currently appealing conviction
Sentence: 25 years
Read: SBF Gets 25 ⛓️👮
The girlfriend factor
SBF and Caroline Ellison. Their on-again-off-again romance while running FTX and Alameda created complications that would later explode in court.
Ellison's testimony was devastating.
SBF directed her to take customer funds.
He ordered her to create false balance sheets.
They discussed the illegality of their actions.
He pushed for riskier trading strategies.
She felt trapped in both the relationship and the fraud.
SBF's response on the stand?
He painted Ellison as an incompetent CEO who couldn't handle Alameda's complexity. It was a strategy that backfired spectacularly, with the judge noting his apparent lack of remorse.
The parents' tale
The story has another tragic dimension. SBF's parents, both Stanford law professors, are now embroiled in their own legal troubles. Joseph Bankman and Barbara Fried face a lawsuit claiming they helped their son embezzle company funds.
Their presence in the Bahamas during FTX's operations and involvement in company decisions has raised questions.
Their role in company governance
Legal advice they provided
Benefits they received
Knowledge of fraudulent activities
Read: Family matters … 👨👩👧
The Appeal Play SBF isn't going quietly. His new legal team has filed a 102-page appeal arguing he was unfairly prevented from presenting his defense.
The judge was biased
Evidence was improperly excluded
FTX's bankruptcy was unnecessary
Customers could have been made whole
Legal experts give the appeal little chance of success, noting the high bar for overturning jury verdicts and the overwhelming evidence presented at trial.
Token Dispatch view
The fallout from FTX's collapse continues to reshape crypto.
Stricter exchange regulations.
Enhanced proof-of-reserve requirements.
Greater scrutiny of stablecoins.
Renewed focus on custodial solutions.
Changed public perception of crypto leaders.
Yet, perhaps the most lasting impact is the human story — how five brilliant minds built an empire on fraud, and how differently they each handled its collapse.
As we await Wang's sentencing, the scoreboard tells a clear story about the value of cooperation.
Early, full cooperation (Singh): Freedom
Star witness testimony (Ellison): 2 years
Technical testimony (Wang): TBD
Partial cooperation (Salame): 7.5 years
No cooperation (SBF): 25 years
But perhaps the most important lesson is about human nature. The same brilliant minds who came together to build crypto's most promising company ultimately couldn't trust each other when it mattered most.
SBF now spends his days in a Brooklyn jail, working on his appeal and sharing space with other fallen stars. His former colleagues are scattered across the country, some awaiting prison, others already planning their next chapters.
It's a reminder that in the end, empires built on fraud don't just collapse — they implode, taking relationships, reputations, and freedoms with them.
As crypto rebuilds from FTX's ashes, the industry would do well to remember that technical brilliance without ethical foundations is just sophisticated theft.
And sophisticated theft, it turns out, still ends in prison — sometimes with a celebrity roommate.
Week That Was 📆
Saturday: Are ETFs Driving Bitcoin in 2024?
Friday: Crypto Firms Get Rekt? 📉
Thursday: Stablecoins: Too Big To Ignore? ☝️
Wednesday: Bitcoin: So Close, Yet So Far? 🍁
If you want to make a splash with us, check out partnership opportunities 🤟
Our sponsorship storefront on Passionfroot 🖖
This is The Token Dispatch find all about us here 🙌
If you like us, if you don't like us .. either ways do tell us✌️
So long. OKAY? ✋
Ellison's role in this saga reminds me of the old saying that 'hell hath no fury like a woman scorned.' In many corporate scandals, the pressure on insiders to keep quiet is immense, but when lines get crossed — romantically or ethically — it seems that truth has a way of coming out.
The irony is that FTX was built to bring crypto into the mainstream, yet its downfall may ultimately do more for regulation than any lobbying effort ever could. Crypto is now at a crossroads: either embrace transparency, or expect more scrutiny and tighter regulations.