After losing more than $1 billion of his customers’ money, the disgraced crypto titan Sam Bankman-Fried had just one thing to say.
That inscrutable message, posted on Twitter last weekend, followed a cataclysmic week for the 30-year-old. FTX, the cryptocurrency-trading site he’d founded and turned into a global behemoth, went insolvent. Bankman-Fried’s personal wealth plummeted from $15 billion to $0 in just one day, and the company filed for bankruptcy. Things have continued to deteriorate ever since, as a new, potentially criminal narrative has emerged: Federal prosecutors in New York have already begun contacting possible witnesses as part of a far-reaching investigation, and the white-shoe law firm Paul, Weiss has already dropped Bankman-Fried as a client.
But as Bankman-Fried’s empire lay smoldering and regulators began closing in, the man once considered the friendly face of crypto apparently figured he should just tweet through it. Over the course of the next 48 hours, that lone “What” was followed by a pattern of numbers and letters—first “2) H,” indicating the beginning of a thread, then “3) A,” then “4) P”—until a mesmerized public began to wise up. At some point, it seemed, Bankman-Fried would attempt to explain “what H-A-P-P-E-N-E-D” at FTX.
Except he didn’t, really. Instead, Bankman-Fried, or SBF, as he is known, has spent the past two weeks brazenly chattering his way through the chaos, using a combination of breathless apologies, cryptic poetry references, and unnervingly casual conversations with journalists to hammer in what FTX’s creditors had already learned: that in spite of his trustworthy facade, Bankman-Fried still doesn’t really understand the gravity of his situation.
It doesn’t take a brilliant legal mind to know that if you’re under any kind of scrutiny for crimes you may or may not have committed, the best course of action is to essentially shut up, lest you further implicate yourself. SBF has taken the opposite tack, granting at least two interviews to journalists. In the first, for The New York Times, Bankman-Fried announced that he was still sleeping pretty well despite the turmoil. “It could be worse,” he said, before adding that he’d been spending recent days unwinding with video games. Here was Bankman-Fried attempting to remind readers that he’s still the same old guy—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 stab at rehabilitating his reputation, this time in an interview with the journalist Kelsey Piper, at Vox, during which he made excuses (“I didn’t want to do sketchy stuff”), offered up meaningless bromides (“the world is never so black and white”), and emphatically agreed with Piper’s suggestion that his ethics-first persona was “mostly a front.” At one point, letting the mask drop completely, he simply typed, “fuck regulators.” SBF later tweeted that he thought the interview, which happened over Twitter, was off the record, though when I spoke with Bankman-Fried last month, he took extreme care to specify which comments were and weren’t on the record—a product, I assumed, of careful media training.
But what’s now proving to be a serious liability, SBF’s constant blabbering, was, until recently, his most powerful tool. In just a few years, SBF went from an arbitrageur in a niche market to one of the most powerful people in crypto. His unguardedness was always at the core of his appeal for the crypto-curious as the industry slowly broke into the mainstream; it was what made him stand out from the legions of anonymous crypto “degens” with NFT profile pictures and embarrassing pseudonyms. Journalists have spent years hounding some crypto executives for a look at their companies’ financials; SBF seemed to be gauging the health of his investments on Twitter in real time. And the idea that he was always accessible—a friend to journalists and crypto podcasters everywhere, reachable both by private message and public exhortation—served to bolster SBF’s image as someone without much to hide. (He was as affable in the days leading up to FTX’s filing for bankruptcy as he’d been when I first got in touch with 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, have demonstrated a penchant for brutish trolling. What made SBF so compelling, and ultimately so dangerous, is that he deeply understood the culture of crypto—and of the broader internet—even as he pushed against it. In an industry that hinges on anonymity, and on the idea that you shouldn’t have to disclose too much information, SBF seemed to want to show you exactly who he was.
Even now that much of that mystique has been peeled away, SBF’s inability to just shut up is doing him no favors. The newly appointed FTX CEO, John Jay Ray III, best known for mopping up the corporate failures at Enron 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 just seems to make SBF look worse and worse. Ray’s filing also revealed a previously undisclosed $1 billion loan that seems to have gone directly into SBF’s own pockets.
After apparently misleading the industry for years, and even after incinerating tens of billions of dollars, it feels like SBF still sees himself as somehow holding sway over the people in his orbit. His image is not that of a villain, although that’s certainly what SBF-the-man seems to be. His incessant, unguarded posting was once an extension of an earnest persona, carefully cultivated. Now it’s just sad.
Go to Publisher: Technology | The Atlantic
Author: Will Gottsegen