The Legend Of "SBF"

Media accounts continue to be generous to Sam Bankman-Fried on the FTX scandal. This piece, I think, gives the overall current dimensions of the Overton window:

In the weeks since Sam Bankman-Fried’s cryptocurrency empire was revealed to be a house of lies, mainstream news organizations and commentators have often failed to give their readers a straightforward assessment of exactly what happened. August institutions including the New York Times and Wall Street Journal have uncovered many key facts about the scandal, but they have also repeatedly seemed to downplay the facts in ways that soft-pedaled Bankman-Fried’s intent and culpability.

The writer in the piece comes down on Sam Bankman-Fried as the architect of a fraud:

At the heart of Bankman-Fried’s fraud are the deep and (literally) intimate ties between FTX, the exchange that enticed retail speculators, and Alameda Research, a hedge fund that Bankman-Fried co-founded. While an exchange ultimately makes money from transaction fees on assets that belong to users, a hedge fund like Alameda seeks to profit from actively trading or investing funds it controls.

Bankman-Fried himself described FTX and Alameda as being “wholly separate” entities. To reinforce that impression, Bankman-Fried stepped down as CEO of Alameda in 2019. But it has emerged that the two operations remained deeply tied. Not only did executives at Alameda and FTX often work out of the same Bahamian penthouse, but Bankman-Fried and Alameda CEO Caroline Ellison were romantically linked.

Sam himself seems to minimize this, for what that's worth, but in any case, watching Caroline Ellison in videos creates a picture of someone with the social awkwardness of a 12-year-old, when according to Wikipedia, she's 28. A cosmetic makeover could well radically improve her looks, but it's almost as though nobody ever told her how to do hair or makeup.

I simply can't imagine what a "romantic" relationship with somebody like that would be like, and when Sam was worth billions, he was in a league to date someone like Amber Heard at least. Why would he settle for such an unattractive, socially and emotionally stunted woman? (My wife elbows me when I ask about Caroline's hygiene, but there you are.) I don't believe that stuff, like I don't believe a lot of the rest.

Not only that, but this account of Sam's New York Times interview yesterday suggests he intends to put the blame on Caroline:

SBF tries to distance himself from the trading firm, claiming he did not have the bandwidth to run two companies (FTX and Alameda).

. . . Clearly SBF is attempting to throw Caroline Ellison, the former CEO of Alameda under the bus as responsible for the downfall.

I'll certainly grant that Sam has been remarkably disingenuous in his post-bankruptcy public remarks, but I would place it in the venial realm of pettifogging and tergiversation. I think he's found himself in a set of circumstances that he himself didn't originate, never controlled, and whose outcome for him was a surprise. The same account of his New York Times interview goes on,

Asked when he knew there was a problem, he responded "Nov 6th", which just happens to be the day that Changpeng Zhao, also known as CZ, publicly tweeted he’d be liquidating Binance’s holdings of FTT.

When they looked at the data, they realized “there was a potential, serious problem there,” he says. Alameda’s position was huge on FTX, and it had just taken a huge hit.

. . . SBF framed the whole debacle as a risk management problem that got out of hand in what he calls a "run on the bank," and that he was unaware of any actions taken by Alameda.

The former White Knight notably squirmed uncomfortably when asked if he is concerned about criminal liability, stuttering the comment that "there's a time and a place for me to think about myself and my own future. I don't think this is it."

My own reaction here is that a criminal mastermind would be taking the advice of his attorneys, which he acknowledges in his interview he isn't following, to maintain a low profile and make no statements. I continue to think ADHD is a factor in his makeup, and he does indirectly acknowledge this in the interview:

On reports of drug use at FTX, SBF says “there were no wild parties. At our parties we play board games. Twenty percent of people would have a quarter of a beer each and the rest of us would not drink anything.”

A big reason not many drank, of course, is that mixing alcohol with amphetamines, which they'd been prescribed for ADHD, is dangerous. SBF acknowledges his own amphetamine prescription:

He says he has been prescribed various things to help him concentrate. “I think they help me focus a little bit,” he says.

My own view continues to be that Sam, whom I would surmise is as much socially and emotionally stunted as Caroline Ellison, isn't capable of the planning needed to create a Ponzi scheme, which FTX is clearly turning out to be. He's a creation of someone else, unlike, say, Bernard Madoff, who had the smarts and social skills to create his own ultra-respectable phony character. The FTX scandal wasn't built on a Madoff-like smoothie, it was built on the image of a quirky, countercultural boy genius, one step beyond a Steve Jobs. Sam was quirky and countercultural, but he wasn't a genius.

My money's on his parents, who'd set him up for this his whole life. Major crimes were committed, but Sam was just a tool.