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In the month since Sam Bankman-Fried’s cryptocurrency empire crumbled to dust, the embattled CEO has taken a somewhat unusual route through the aftermath: a full-scale media blitz with interviews given to multiple news teams and crypto personalities. These interviews and appearances were as odd as they were ill-advised (at least to his surely frustrated legal team). All the while, SBF has revised its lofty image as the unsupported boy genius of cryptocurrency. He was no longer the young, idealistic billionaire who had built a new crypto-trading behemoth to pour the profits into public health, democratic politics and journalism while pushing the philanthropic principles of an effective altruism movement. Now, with $8 billion of his clients’ holdings seemingly evaporated, he was a careless fool who simply didn’t do due diligence on his core business and let problems he was dimly aware of spiral catastrophically out of control. Most observers didn’t believe him and suspected something else was going on, especially since most of his repetitive remarks allowed a few shady admissions to slip out. some prominent crypto critics advises caution, theorizing that “everything he says is to keep him out of jail.”
If that was the play, it didn’t work. On Monday evening, the Attorney General’s Office of the Bahamas – where Bankman-Fried’s crypto exchange FTX is based and where he has been conducting all these interviews since its collapse – announced that the police arrested the businessman and placed him in custody after “receiving official notification from the United States that they have brought criminal charges against SBF and are likely to seek his extradition.” On Tuesday morning, we learned of charges: from the Securities and Exchange Commission of defrauding investors; from the Southern District of New York, for electronic media fraud, securities fraud and money laundering, among other criminal charges; by the Commodity Futures Trading Commission (with which SBF was once quite close), for fraud and material misrepresentation of commodities. The arrest caused him to miss a state Financial Services Committee hearing on the FTX scandal, although the company’s current CEO, who also helped clean up the Enron fallout, appeared to testify about SBF’s business practices. (He said the word appropriation quite a bit.) By the end of the day, Bankman-Fried had been denied bail in the Bahamas.
What did SBF really think was going to come of all this talk after FTX and its related crypto hedge fund, Alameda Research, filed for Chapter 11 bankruptcy? In addition to all tweets that infuriated corporate bankruptcy lawyers, there was an infamous New York Times softball interview, several expletive-ridden Vox DMs, phone calls to Axios and crypto enthusiast Tiffany Fong and New York magazine, an appearance at the DealBook Summit with Andrew Ross Sorkin, Good morning America an interview with George Stephanopoulos, a a lot on hours in Twitter Spaces hosted by crypto industry insiders, Bloomberg’s visit to SBF’s Bahamian penthouse, a conversation with Puck, a podcast interview with Block (a website that previously received tens of millions in undisclosed funding from SBF itself), and on-camera chats with the Wall Street Journal and Forbes. Oh, and finally, an interview with prominent crypto skeptic Molly White that took place just hours before his arrest, in which SBF predicted that he would not be arrested, just as he had claimed in a previous Twitter space. (I’m sure I missed at least a dozen others.)
A lot of nonsense for a man who, even before Tuesday, must have been aware that he was facing serious legal scrutiny. It’s even more amazing when you consider how little anyone else associated with FTX or Bankman-Fried’s hedge fund, Alameda Research, has spoken in the weeks since it all went down: Not a word from former Alameda CEO Caroline Ellison (I tried, only for her to refuse), from former FTX executives Gary Wang and Nishad Singh, or parents of SBF Stanford law professors. Ellison, for her part, appears to have been judiciously lawyered up, while her ex-boyfriend SBF admitted he told his first crisis-era lawyers to “screw themselves” and referred to parts of FTX’s bankruptcy filing in November as “false “. (Brave!)
Maybe you and I would take a different approach if we were, I don’t know, facing serious accusations from both aggrieved customers and skeptical government officials that we misappropriated billions of dollars of other people’s money, but hey, nobody of us is not Sam Bankman-Fried. (I very much agree with that, to be clear.) But the disgraced genius kept saying he had a “duty” to those affected by the downfall of his business — which was entangled with many, a lot key parts of the crypto economy – to explain what happened and make things right. OK, of course. But was anything he said in his millions of interviews helpful to anyone in this regard?
As you might guess, not really. Speaking as someone who got involved o’clock of Sam Bankman-Fried’s audio and video interviews, the benefit of paying attention any kind of these statements brought diminishing returns over time as more and more people booked “exclusive” interviews with the man and as he continued to speak loudly without saying anything. (And I say this as someone who generally thinks CEOs facing criminal charges should talk to a lot of journalists, like me!) There were a lot of apologies and “I screwed up” statements, to the point where he even planned to lead with it before Congress, according to his leaked testimony. But when it came down to how he screwed up right, details were scarcer. The main point SBF wanted to make out was that he was unaware of the things that led to his companies being exposed – that he did not “knowingly” exchange client deposits between his Alameda hedge fund and the FTX exchanges in an inappropriate and secret way, that he did not “realize” how deeply intertwined the two companies he founded were, that he “failed” to assign anyone to closely monitor all financial operations, or even to do it himself.
It’s not the most believable story even by SBF’s own admission (and he also says over and over that “it’s all up to me”), but it provides cover if you’re trying to protect yourself from the feds: you didn’t know whatever , other people have messed up, but you won’t call them out specifically, out of personal concern. He continued to say that he did not have “access” to information that would allow him to be more forthcoming about financial specifics thanks to the Chapter 11 proceedings. Curiously, despite the lack of information that allowed him to avoid inquiries about his business practices, he continued to say that filing for Chapter 11 was his “biggest” mistake and regretted that he could have “made clients healthy” if he hadn’t relinquished control of the companies and that FTX users in the US and Japan and even elsewhere would have gotten all their money back if not for these meddling lawyers. (A constant in SBF’s post-bankruptcy public statements is mocking disdain for government officials and lawyers, which, while relatable, is perhaps best left unspoken in situations like this.) There were some masterful uses of the distress pledge when at issue were FTX’s external loans that used client funds and its collateral, which depended heavily on an illiquid domestic token as well as other coins in which SBF had personal stakes. People who wanted to transfer money to FTX just had their funds sent to an Alameda account and it just wasn’t recorded correctly in the balance sheets. After a while, FTX simply found itself “exposed” to Alameda with a margin that was “larger” and more uncertain than he expected, and lo and behold, those bonds were already shrinking in 2022. Such points are moot because, as even Forbes revealed, Bankman-Fried clear had known about Alameda’s finances for years, though he claimed he was not as involved with the hedge fund after others were appointed co-CEOs.
I could go through more such quotes, but that would be boring and pointless by now – after all, SBF wouldn’t say anything really revealing. He was just a big dummy who let the fame and attention go to his head. It was the line he wanted to repeat like a parrot, but failed. In some of the Twitter spaces I listened to, SBF’s more vocal critics, like YouTube pundit Coffeezilla, accused Bankman-Fried of walking her way through her interviews, saying a lot of empty words to avoid any direct answers about her culpability. Writers who once wrote flattering profiles of Bankman-Fried expressed their regret, as did investors who had been charmed by him. A Telegram chat consisting of aggrieved ex-FTX customers spent weeks in mass anger over SBF’s lack of impunity and their hatred for the man they once trusted with their money took to some pretty dark places. (They want his head, to put it mildly.) If Bankman-Fried really was trying to “win in the court of public opinion,” as one podcast suggested, it didn’t look like it was happening.
SBF’s lack of prudence has already had direct consequences, especially due to several omissions it made. His comments to Tiffany Fong about his black money donations to Republicans opened a complaint with the Federal Election Commission about alleged campaign finance violations. His attempt to I squirm at the summons congressional hearings about his business only served to increase pressure from lawmakers. And whatever attempts he had made to maintain his once brilliant reputation had been undermined by a pair of handcuffs; no doubt investigators will go through all the interviews he gave bit by bit and use them as they see fit.
It seems, then, that the crypto wunderkind with a “savior complex” who once said he wanted to save both the entire world and the moribund digital currency industry can’t even save himself, no matter how much he bows to the same journalistic a complex that once delighted in treading on it. Whether or not SBF is proven to be a criminal down the line, he definitely pulled off one of the greatest self-possessors of all time. Put that line on his next magazine cover.
Future Tense is a partnership between Slate, New America, and Arizona State University that explores emerging technology, public policy, and society.
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