After losing more than $1 billion of his clients’ money, disgraced crypto titan Sam Bankman-Fried had only one thing to say.
This inscrutable message, posted on Twitter last weekend, followed a cataclysmic week for the 30-year-old. FTX, the cryptocurrency trading site he founded and grew into a global giant, has gone insolvent. Bankman-Fried’s personal wealth plummeted from $15 billion to $0 in a single day, and the company filed for bankruptcy. Things have only gone downhill ever since, as a potentially criminal new narrative has emerged: Federal prosecutors in New York have already begun contacting possible witnesses as part of a thorough investigation, and the Paul Weiss law firm has already dropped Bankman-Fried as a client.
But as the Bankman-Fried empire simmered and regulators began to close in, the man once seen as the friendly face of crypto apparently thought he should just tweet through. Over the next 48 hours, this single “What” was followed by a series of numbers and letters – first “2) H”, indicating the start of a thread, then “3) A”, then “4) P” – until a mesmerized audience began to wake up. At one point, it looked like Bankman-Fried would attempt to explain “what happened” to FTX.
Except he didn’t, really. Instead, Bankman-Fried, or SBF, as it’s known, has spent the past two weeks chattering cheekily through the chaos, using a combination of breathless excuses, cryptic poetic referencesand flippant, baffling conversations with reporters to hammer home what FTX debtors had already learned: that despite his trustworthy facade, Bankman-Fried still doesn’t quite understand the gravity of his situation.
It doesn’t take a brilliant legal mind to know that if you’re under scrutiny for crimes you may or may not have committed, the best thing to do is essentially keep your mouth shut, lest you get further implicated. SBF took the opposite view by granting at least two interviews to journalists. In the first, for The New York Times, Bankman-Fried announced that he was still sleeping reasonably well despite the turmoil. “It could be worse,” he said, before adding that he had spent the past few days relaxing with video games. Here, Bankman-Fried was trying to remind readers that he’s still the same old man – the implication being that maybe he was just naive after all. (Bankman-Fried did not respond to a request for comment.)
And earlier this week, SBF made another apparent move to rehabilitate its reputation, this time in an interview with journalist Kelsey Piper, at Voice, during which he apologized (“I didn’t mean to do sketchy stuff”), offered meaningless bromides (“the world is never so black and white”), and adamantly accepted the suggestion. of Piper that her first ethical persona was “primarily a forehead.” At one point, dropping the mask completely, he simply typed “damn regulators.” SBF later tweeted that he thought the interview, which took place on Twitter, was off the record, although when I spoke with Bankman-Fried last month he took extreme care to clarify what comments were and were not recorded – a product, I assumed, of careful media training.
But what now turns out to be a serious handicap, SBF’s constant chatter, was, until recently, its most powerful tool. In just a few years, SBF has gone from being an arbitrageur in a niche market to one of the most powerful people in crypto. His recklessness has always been central to his appeal to the crypto-curious as the industry slowly burst into the mainstream; it’s what made him stand out from the legions of anonymous crypto “degens” with NFT profile pictures and embarrassing pseudonyms. Journalists have spent years hunting down some crypto executives for insight into their company’s finances; SBF seemed to gauge the health of its investments on Twitter in real time. And the idea that he was always accessible – a friend of crypto journalists and podcasters everywhere, reachable both by private message and public exhortation – served to reinforce SBF’s image as someone with little to hide. . (He was as affable in the days leading up to FTX’s bankruptcy filing as he had been when I first reached out to him, on Twitter in 2020.)
He wasn’t quite Jeff Bezos, whose tweets are professional to the point of awkwardness, and he wasn’t quite Elon Musk, whose tweets, especially lately, showed an inclination for brutal trolling. What made SBF so compelling, and ultimately so dangerous, was that he deeply understood the culture of crypto – and the wider internet – even as he opposed it. In an industry that relies on anonymity and the idea that you shouldn’t have to divulge too much information, SBF seemed to want to show you exactly who they were.
Even now that much of that mystique has been weeded out, SBF’s inability to shut up does it no favors. New FTX CEO John Jay Ray III, best known for weathering Enron bankruptcies in the mid-2000s, described his predecessor in a recent court filing as unable to stop making “erratic and misleading public statements “even as his world crumbles around him. “Never in my career have I seen such a complete failure of corporate controls,” he also wrote. Indeed, each new revelation seems to make SBF worse and worse. Ray’s filing also revealed a previously undisclosed $1 billion loan that appears to have gone straight into SBF’s pockets.
After seemingly misleading the industry for years, and even after incinerating tens of billions of dollars, it feels like SBF still sees itself as somehow dominating the people on its orbit. His image isn’t that of a villain, although that’s certainly what SBF-the-man seems to be. His relentless, unguarded affectation was once an extension of a serious, carefully cultivated personality. Now that’s just sad.