Former crypto titan Sam Bankman-Fried outside Manhattan Federal Court. (Michael M. Santiago / Getty News)

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Sam Bankman-Fried’s conviction on seven charges of fraud, conspiracy, and money laundering is only the first act in what promises to be a lengthy, expensive legal drama. Southern District of New York Judge Lewis Kaplan already scheduled a second trial for the former head of the FTX crypto exchange next March, this time for charges arising from Bankman-Fried’s alleged $150 million bribe to Chinese officials in an effort to unfreeze a $1 billion tranche of crypto cash supposedly linked to a money-laundering inquiry. He may also face charges for violating campaign finance laws as part of a wide-ranging political-influence operation. And he’s likely to be sued by practically everyone he ever did business with. In June, dozens of lawsuits against Bankman-Fried, his colleagues, and FTX investors and celebrity spokespeople were combined into one giant blob of a legal proceeding known as a multidistrict litigation, with many more lawsuits still waiting to be filed. The legal afterlife of FTX—a company that existed for less than three years—should be much longer than its time as a going concern.

Small wonder that the true believers in the battered crypto industry would just as soon claim closure with last week’s verdict, which leaves Bankman-Fried facing a potential 110-year prison sentence, and move on. But Bankman-Fried didn’t operate alone, and the rot he represented may be endemic to the shadowy crypto economy. One reason the FTX scam spread so rapidly was that so many of his peers lent him an astonishing amount of money, and most major crypto firms did business with him or traded on FTX. And while the prosecution of Bankman-Fried was obviously damning, the story told in court—in witness testimony, government exhibits, and prosecutors’ arguments—is not a complete picture of FTX or its place in the world of tech-enabled illicit finance. We still don’t know all that much about how FTX operated, where it got money from, or where that money ultimately went. Many of these critical details went unmentioned in court.

Four of Bankman-Fried’s colleagues have pleaded guilty—three testified against him as coconspirators—and more may yet be charged. Former Alameda co-CEO Sam Trabucco, who resigned his position in August 2022 to spend more time on a boat that he named after a sex act, hasn’t been heard from in a year. Dan Friedberg, the in-house fixer and chief compliance officer whom Bankman-Fried leaned on for everything from setting up shell companies to making unpleasant litigation go away, reportedly cooperated with prosecutors. Former FTX US General Counsel Ryne Miller, who attempted to take control of the company in its waning days, helped bring in his erstwhile employer Sullivan & Cromwell to shepherd the company through bankruptcy—an arrangement that’s expected to net hundreds of millions of dollars in legal fees. (Prosecutors accused Bankman-Fried of witness tampering after he contacted Miller and offered to compare notes on the bankruptcy proceedings.)

A surprising number of FTX alumni seem to have found new jobs as venture capitalists and fintech executives, with their tenure at one of this century’s largest networks of financial fraud representing just another line on their LinkedIn profiles. Amy Wu, the former head of FTX Ventures, which sluiced a great deal of stolen FTX funds into fledgling tech concerns, is now a general partner at the storied VC firm Menlo Ventures. (She says she’s still investing in crypto.) Brett Harrison, the CEO of FTX US who clashed with Bankman-Fried, quickly started a new crypto business with Anthony Scaramucci, the briefly tenured Trump spokesman who sold 30 percent of his investment firm to Bankman-Fried and later chaperoned the fraudster CEO on an unsuccessful fundraising trip to the Middle East two months before FTX collapsed.

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Bankman-Fried’s family is also facing extended legal scrutiny. His parents, who received millions of dollars in cash and real estate from FTX, are facing litigation from FTX’s leadership and may yet face criminal liability. Their teaching careers at Stanford seem finished, and they’re being asked to return $10 million to FTX. In one e-mail disclosed in the lawsuit, SBF’s mother, Barbara Fried, appeared to direct former FTX executive Nishad Singh to give a large straw donation to her political nonprofit. Singh has already pleaded guilty to violating campaign finance laws.

Prosecutors in the first trial didn’t need to discuss all these players and tangled arrangements in order to convict the defendant. They didn’t even need to mention Tether, the ultra-shady crypto firm with which FTX did at least $36 billion of business, making it Tether’s biggest client. An object of endless interest and conspiratorial speculation among crypto skeptics, Tether produces USDT, a $1 stablecoin that’s the most widely traded token in crypto—a product that allows the company to function as a virtual central bank in crypto trades. The New York attorney general found that Tether lied about its asset reserves, and the company has admitted in legal filings that it sometimes lends out tokens without receiving money in return—printing and distributing fake digital dollars, in other words. Tether has reached eight-figure settlements with the Commodity Futures Trading Commission and the New York AG, and it’s barred from doing business in the state of New York. The US Department of Justice reportedly has conducted a long-running bank fraud investigation into Tether. The endless list of bizarre characters associated with the company—from a former actor in the 1990s Disney hockey film The Mighty Ducks to an Italian plastic surgeon turned software pirate to the creator of Inspector Gadget—practically demands cinematic treatment: Think of the Coen brothers’ national security farce Burn After Reading set in a Bahamian shadow bank.

Alameda Research, Bankman-Fried’s trading firm, was the largest minter of Tether tokens. In a few years, Alameda somehow funneled $36 billion in real dollars to Tether in exchange for an equal amount of Tether stablecoins, known as USDT. Alameda would then sell USDT on open markets—which, since the token does experience tiny fluctuations above and below its $1 peg, allowed arbitrage opportunities for savvy traders. Then the cash would be sent back for more USDT. Rinse and repeat, until somehow you reach $36 billion.

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“This does strike outsiders as suspicious…as this would require enough normal investors demanding $36 billion of unregulated ‘stablecoins’ (effectively, digital banknotes issued by a private bank),” said Nicholas Weaver, a computer scientist critical of the crypto industry. It’s not clear whether the demand for USDT—the printing of which has been linked to manipulation of the price of Bitcoin—is real. Nor is it all clear just who is actually buying all these tokens “whose only legitimate use,” said Weaver, “is for trading on exchanges that are so poorly run and regulated that they are disconnected from the normal banking system.”

Tether matters because FTX’s downfall is ultimately a story about illicit finance writ large. Besides securities and commodities fraud, Bankman-Fried was also convicted of conspiracy to commit money laundering. And some of FTX/Alameda’s business operations make it sound like the company itself served as a giant clearing house for laundering cash.

After starting Alameda Research in Berkeley in 2017, Bankman-Fried moved his company to Hong Kong, an epicenter of crypto and a magnet for Chinese capital flight. In Hong Kong, one can go to money changers and buy thousands of dollars’ worth of USDT or other crypto without providing any personal information. Tether has become a key part of the toolkit for anyone looking to launder money, evade taxes, or escape capital controls.

While Alameda was based in Hong Kong, the company gorged on money flowing through the island. Alameda owned a stake in a company called Genesis Block, which allowed people to trade cash for crypto, particularly Bitcoin, at storefront retail locations. “People were literally lining up around the corner with bags of cash at Genesis Block,” a former employee told the Financial Times. Genesis Block supposedly bought and sold crypto on exchanges across Asia, taking advantage of price fluctuations between exchanges. The company mined crypto in China, moved money to and from the mainland, traded in Cambodian peer-to-peer markets, and had “a whole network of…satellite bank accounts,” according to head trader Charles Yang. He admitted in a podcast interview that this was “a very gray area, I’m not going to lie. It could sound shady to some people.”

The companies were tied closely together—indeed, FTX and Genesis Block shared office space. Yang once showed up to an event and was credited as an Alameda employee. A Genesis Block cofounder was a director of FTX Hong Kong. According to James Block, a crypto researcher who writes under the pseudonym Dirty Bubble Media, crypto that retail customers sold to Genesis went instantly to pad Alameda Research’s bottom line. “Our findings suggest Alameda wasn’t just a hedge fund,” wrote Block. “It was acting as an OTC [over-the-counter desk] and payment processor for individuals in Hong Kong exchanging cash for cryptocurrency.”

Crypto needs constant infusions of fresh cash—real fiat currency, not magic Internet tokens. Hong Kong offered that, and Genesis Block seemed to have the necessary network of retail storefronts, bank accounts, and connections with the mainland and wealthy Chinese to allow it to become a cash conduit for Alameda/FTX. Some family offices—private investment vehicles for wealthy locals—that did business with Genesis Block reportedly became FTX investors.

In 2021, before Bankman-Fried left Hong Kong to relocate his businesses to the Bahamas, Chinese authorities froze $1 billion in crypto that Alameda Research held in accounts on two Chinese exchanges. That action was apparently tied to a money-laundering investigation, though former Alameda CEO Caroline Ellison testified in court that Alameda wasn’t a target. Bankman-Fried and his executives tried various ways of retrieving the funds, including opening trading accounts in the names of Thai sex workers and attempting to transfer the crypto to them. Eventually, according to prosecutors and Ellison’s testimony, Bankman-Fried authorized the payment of a $150 million bribe to Chinese law enforcement—a kickback that should be at the center of his trial in March 2024. The gambit worked: The crypto was unfrozen, and Alameda moved it, and its company headquarters, to safer pastures in the Caribbean.

Strange movements of cash and crypto can be found throughout the history of Alameda and FTX. After Sequoia Capital—a leading Silicon Valley VC firm that predicted Bankman-Fried would become the world’s first trillionaire—invested more than $200 million in FTX, Bankman-Fried in turn invested $200 million in another Sequoia fund. He did something similar with Paradigm, which invested in FTX and then received a sizable investment from Alameda. During the weekend that FTX filed for bankruptcy, hundreds of millions of dollars in crypto were spirited out of company wallets by an attacker who still hasn’t been identified.

These transactions call out for some kind of investigation and explanation—if not in the courts, then by journalists and crypto critics. Tether’s CEO has denounced Bankman-Fried as a con man, without acknowledging their close business ties. Sequoia hasn’t accounted for the $200 million that went to FTX and boomeranged back. “SBF misled and deceived so many, from customers and employees to business partners and investors, including myself and Sequoia,” Alfred Lin, a Sequoia partner, recently posted on Twitter. Matt Huang, a partner at Paradigm, testified against Bankman-Fried in court, where he said that his company had written down its $278 million investment in FTX to zero. But he was not asked about investments Paradigm received from Bankman-Fried.

Sam Bankman-Fried didn’t just control Alameda Research and FTX. He had some 140-plus registered companies—many of them shells used to direct billions of dollars in investments made with stolen funds. Some of these start-ups he controlled directly; others seemed to be covert parts of the Bankman-Fried empire. What matters most is that we still don’t know the full extent of this network of dirty and pilfered money. We don’t know where all the cash came from or where it went. But we do know that for a few years, Bankman-Fried controlled an incredibly valuable vehicle for laundering money. Before we close the book on his high-flying career as a scammer of well-connected capital, it’s worth asking who else benefited from his crimes.