STANFORD, Calif. — A Stanford freshman stopped by Sam Bankman-Fried’s house for the first time on a Friday night in January. He spotted something he wanted: a large sign secured to a metal blockade proclaiming: “PATH CLOSED.”
The student, a cryptocurrency enthusiast who spoke on the condition of anonymity so as not to get in trouble with campus police, withdrew the roughly $80,000 he had on the exchange just days before it collapsed in November — unlike the millions of other former FTX customers who remain unable to access their accounts. But he was still angry at Bankman-Fried for the role he’s accused of playing in perpetrating a massive fraud in connection with FTX and its related companies. Removing a “PATH CLOSED” sign was the student’s way of signaling to Bankman-Fried that he’s not welcome.
In recent months, the Bankman-Fried home has become an unofficial campus landmark that’s famous for all the wrong reasons. Like many large universities, Stanford has several spots honoring its legacy, such as Hoover Tower, which houses a library and archive founded by alumnus Herbert Hoover before he went on to become a U.S. president.
Bankman-Fried, the son of two Stanford law professors, was released on a $250 million bond secured by the Craftsman-style house. While awaiting his fraud trial later this year, Bankman-Fried wears an ankle bracelet to track his movements and plays with his new dog, Sandor, according to a Puck News report.
The university seems keen to play down his presence. Officially, the university doesn’t talk about Bankman-Fried. Stanford Law School didn’t respond to requests for comment. When asked whether they could confirm a rumor that a nearby student co-op had attacked the Bankman-Fried home with eggs, Stanford campus police did not respond.
Socially, however, Bankman-Fried is a source of deep fascination. There are party fliers with his likeness. He’s a punchline in campus comedy sketches. Students ride their bikes by on dates.
Through his spokesman Mark Botnick, Bankman-Fried declined to comment for this article.
Bankman-Fried, who grew up on campus, “certainly fits into what I regard as the kind of culture of Stanford,” says Richard White, a retired Stanford history professor — even if the 30-year-old former billionaire left Silicon Valley to attend MIT.
White and others characterize Stanford’s culture as a place where faculty and students are emboldened to take big risks in conceiving the next hot start-up or breakthrough innovation, often with easy access to capital, the conviction that they’re changing the world — and few consequences if things go south.
Bankman-Fried founded FTX in 2019, which received hefty backing from well-known investment firms such as Sequoia Capital, SoftBank and others — plus endorsements from celebrities such as football star Tom Brady, supermodel Gisele Bündchen and comedian Larry David. The Bahamas-based company was valued at $32 billion as recently as early 2022 before it imploded in November.
It remains to be seen what consequences Bankman-Fried, who pleaded not guilty, might face. So far, his ability to be detained at home, instead of jail, is an exception to how most federal defendants are treated. The quiet, traffic-light Stanford neighborhood is quite the upgrade from Fox Hill, a notoriously rough prison in the Bahamas where Bankman-Fried was briefly held before being extradited.
If Bankman-Fried violates the terms of his bail agreement, his parents could lose their house, which they’ve owned since 1991 and is worth over $3.5 million, according to public property records.
Three of Bankman-Fried’s former colleagues — Caroline Ellison, Gary Wang and Nishad Singh — have pleaded guilty to fraud charges connected to FTX and its sister company, Alameda Research, and are cooperating with U.S. prosecutors. Wang’s lawyer declined to comment. Lawyers for Ellison and Singh did not immediately respond to requests for comment.
The two non-relatives to guarantee Bankman-Fried’s bond are both connected to Stanford. Larry Kramer, a former dean of Stanford’s law school, said in an email that his decision to back Bankman-Fried’s bond was made in a personal capacity. Kramer said the Bankman-Frieds, whom he and his wife have known since the 1990s, have “been the truest of friends” when they went through a difficult period. “In turn, we have sought to support them as they face their own crisis.”
The other bond guarantor, a Stanford senior research scientist, didn’t respond to a request for comment.
The campus community is well aware that he’s there. An annotated map, locating the Bankman-Fried home, was posted on a student-only social network. Colloquially, some on campus refer to the faculty neighborhood by a cheeky nickname that lumps together Bankman-Fried with the tarnished reputation of his neighbor, university President Marc Tessier-Lavigne, who is under investigation for alleged misconduct with his medical research.
Still, there have been security threats. A Jan. 19 letter from Bankman-Fried’s lawyers to the district court judge presiding over Bankman-Fried’s case noted that a car had driven into the security barricades set up outside his parents’ home. Before taking a recent hiatus from teaching, Joseph Bankman taught tax law and mental health law at the university, and Bankman-Fried’s mother, Barbara Fried, who recently retired, taught contract law. Law students frequently rave about Bankman and Fried, calling both of them brilliant and kind professors, and expressing disappointment that they’re not in the classroom.
From his childhood home, which has its shades drawn and “no trespassing” signs out front, Bankman-Fried has found many ways to remain connected to the outside world. He’s done interviews with journalists and launched an online newsletter. Prosecutors say he’s contacted former FTX officials who may be witnesses in his trial. The U.S. government has tried to restrict his access to virtual private networks and certain apps where messages disappear, but a final ruling has not been made. The judge presiding over his case asked in a hearing last month, “Why am I being asked to turn him loose in this garden of electronic devices?” highlighting that despite any restrictions the court might place on Bankman-Fried’s use of technology, he remains in a home with his parents who also have a plethora of ways to be wired.
On March 3, prosecutors proposed limiting Bankman-Fried to a flip-phone or “non-smartphone” that cannot access the internet, and that he be issued a new laptop “with limited functionalities.” Prosecutors also want to place strict limits and monitoring tools on his parents’ devices.
Tyler Benster, a 31-year-old neuroscience PhD student who also works and invests in crypto, cycled by the home on a date recently, pointing it out as he might Steve Jobs’s old home or the campus sculpture garden.
Compared with how hard students work to get to Stanford, Benster sees Bankman-Fried’s physical presence on campus as eye-poppingly incongruous. “People spend years and years of their life working hard and preparing to then have the privilege of being here, using the resources, being in the heart of Silicon Valley,” Benster said. “And the idea that someone could end up sort of living on campus due to a massive uncovered fraud is fairly ironic.”
Seraj Desai, a 24-year-old law student, who was curious if he could pry information out of a security guard in front of the house, was told: “Everything that you need to know is on the internet.”
When asked if Bankman-Fried reflects poorly on the university, the common response is: It’s not as bad as Elizabeth Holmes. She did attend Stanford before dropping out at 19 to start the blood-testing company Theranos, and her board included several heavyweights who were affiliated with Stanford’s Hoover Institution think tank. Unlike Bankman-Fried, who’s only been charged with fraud, she’s been convicted and sentenced to 11 years in prison.
“We already had Elizabeth Holmes. … we’ve already dug the grave,” said Desai, the law student. “If anything, if a white-collar criminal is found guilty, people will get more interested and … there’s a fascination in how they did it. Stanford has a very strong reputation that won’t be tainted, but it’ll trend on Twitter.”
Some students are too busy with midterms to pay attention to Bankman-Fried’s presence, while others have no interest in him. A sophomore who spoke on the condition of anonymity because she wants to work in politics and doesn’t want to be associated with Bankman-Fried, declined her friends’ invite to go by his house. There’s “a weird voyeurism about it,” she said, adding that others’ fascination with him might be connected to their own aspirations.
“There’s a perverse desire to know what could have been, or knowing what you could have been,” she said of her friends’ interest in Bankman-Fried. He soared to heights they’ve only dreamed of, she noted. And then, the schadenfreude kicked in. Watching his downfall, she said, is “really engaging.”
Adrian Daub, a Stanford professor of comparative literature and German studies and author of “What Tech Calls Thinking,” sees an encouraging sign in Stanford being only peripherally involved in the Bankman-Fried scandal. That might not have been the case 10 years ago, he notes, when the Silicon Valley hype machine operated at more of a fever pitch than it does today.
“Other than his physical location, it’s actually not that connected to us for once,” Daub said. “In that way, it’s a sign of progress,” and also “a little bit melancholy.”
“Stanford was a place where the future was shaped, and it’s quite possible that’s not happening anymore — that it’s happening in the Bahamas now and only comes to Palo Alto once it gets indicted.”
The freshman who’d eyed that “PATH CLOSED” sign went back to the Bankman-Fried home later in January. All he needed to get his memento was wire cutters and some courage. He snipped off the zip ties securing it to a metal blockade and paraded it around for selfies at a cryptocurrency networking event.
The sign is currently growing mold in his dorm-room closet.