Last night, Sam Bankman-Fried DMed me on Twitter.
That was surprising. I’d spoken to Bankman-Fried via Zoom earlier in the summertime when I was working on a contour of him, so I reached out to him via DM on Nov 13, after news broke that his cryptocurrency exchange had collapsed, with billions in customer deposits apparently gone. I didn’t expect him to respond — typically, people under investigation by both the Securities and Exchange Commission and the Section of Justice don’t render requests for comment.
Bankman-Fried, though, apparently wanted to talk. Well-nigh how FTX and his hedge fund Alameda Research had gambled with customer money without, he claims, realizing that’southward what they were doing. About who gets lauded every bit a hero and who’s the fall guy. About regulators. (“Fuck regulators.”) About what he regrets (“Chapter 11,” the decision to declare bankruptcy) and about what he would have done differently with FTX and Alameda (“more careful bookkeeping + offboard Alameda from FTX once FTX could live on its own”).
It was past midnight Bahamas fourth dimension, where Bankman-Fried is reportedly still located, and nosotros went back and forth on Twitter for more than an hour. He was, he said, all the same working to try to enhance the funding needed to pay dorsum all his depositors.
As we messaged, I was trying to brand sense of what, behind the PR and the charitable donations and the lobbying, Bankman-Fried actually believes about what’south right and what’s wrong — and especially the ethics of what he did and the industry he worked in. Looming over our whole conversation was the fact that people who trusted him have lost their savings, and that he’s washed incalculable damage to everything he proclaimed only a few weeks ago to care nigh. The grief and pain he has caused is immense, and I came away from our conversation appalled by much of what he said. Simply if these mistakes haunted him, he largely didn’t prove it.
(Disclosure: This August, Bankman-Fried’southward philanthropic family unit foundation, Building a Stronger Futurity, awarded Vox’s Future Perfect a grant for a 2023 reporting project. That project is now on suspension.)
On regulators
Earlier his empire collapsed, Bankman-Fried was actively engaged in lobbying in Washington for a regulatory framework for cryptocurrency. While many crypto CEOs — similar Bankman-Fried’s nemesis Binance CEO Changpeng “CZ” Zhao — are openly skeptical of government regulation, Bankman-Fried has largely avoided criticizing regulators. But in our conversation, he dismissed their role. He characterized his past conciliatory statements — similar when he said simply last month that some corporeality of crypto regulation would be “definitively adept” — as footling more “PR.” In doing so, he all but confirmed the view of critics who accept argued that his overtures to Washington were much more about image than substance.
On being willing to bear unethically
One question on which I’ve seen widespread speculation is whether Bankman-Fried thought it was okay to practice unethical things “for the greater good” — a position that hardcore utilitarians, which Bankman-Fried has identified as in the past, might agree.
That question happens to be one I had asked him in the interview this summer, which I had just relistened to the dark earlier our Twitter conversation. At the time, of grade, I idea the ethical dilemma where Bankman-Fried had perchance crossed a line was whether information technology was adequate to run a cryptocurrency exchange in the first place — and whether the adept he claimed he meant to do made information technology okay.
A lot of people, I said to Bankman-Fried in that earlier interview, would think of “starting a crypto company to make billions of dollars the fashion I would think of starting a tobacco company to brand billions of dollars: deeply immoral. Presumably, there’s some line where you shouldn’t do something that bad even for good reasons. I’m curious whether you think there’south some line? And if so, where would you depict that line?”
“There is some line,” he told me then. “The reply can’t be there is no line. Or else, y’all know, you lot could end up doing massively more than impairment than good. And I recollect more mostly, you could say, okay, fine, but simply, like, subtract that out. But I don’t think it’south that simple, either. Because in that location are a lot of complicated but important second-social club harms that come if your core business is bad for the world, in terms of your ability to work with partners and your ability to piece of work with partners in your philanthropic efforts.
“Y’all could imagine that if the Philip Morris Foundation had really practiced ideas about how to improve the earth, they probably would still have a really hard time working with the Gates Foundation. So I do call up information technology’s more than complicated than that. And you have to seriously argue with what the impact is of your direct work.”
I returned to those questions in our Twitter chat. Those well-considered ideas almost balancing ethical imperatives? “It’s non true, non really,” he said now.
On bending the truth
Bankman-Fried has maintained that FTX has never invested the deposits of crypto account holders on the commutation. I pressed him on that point via Twitter, and while he connected to insist that FTX did not direct utilize business relationship money in this way, he said that Alameda — which he too owns — had borrowed far more coin from FTX’southward balance sheet for investments than he had realized, which ultimately left FTX vulnerable to the crypto equivalent of a bank run.
Why didn’t Bankman-Fried realize what was happening until it was too belatedly? “Sometimes life creeps up on you,” he said.
On what happened
One theory is that the seeds of FTX’southward downfall were sown earlier this yr, when Alameda reportedly took huge losses after the crypto company Terra’s LUNA stablecoin collapsed. Bankman-Fried said he didn’t realize the extent of the problem because of “messy accounting” — albeit messy accounting to the tune of billions of dollars.
On what he regrets
Bankman-Fried best-selling that he “fucked up. Big. Multiple times.” Just he also insisted that much of the trouble could take been avoided if FTX had not alleged defalcation, which has largely taken financial matters out of his command. (During the procedure, Bankman-Fried was replaced every bit CEO of FTX past John J. Ray III, a lawyer who helped creditors recover billions of dollars after the defalcation of the free energy trading firm Enron.) “The people in charge of [the company] are trying to fire it all to the basis out of shame,” he told me.
Bankman-Fried argues he should instead have kept trying to raise more money, and insisted that if he’d just done that, “withdrawals would be opening up in a month with customers fully whole.” The Wall Street Journal reported earlier this week on Bankman-Fried’s efforts to find funding and found no indication any investors were committing. Fifty-fifty if fresh funding were obtained, the newspaper connected, information technology would require negotiations with FTX creditors and the approving of the bankruptcy court.
While he said that some of his colleagues — co-founder Gary Wang and managing director of engineering Nishad Singh — were “scared,” and, in the example of Singh, “ashamed and guilty,” Bankman-Fried seems to maintain some emotional distance from the collapse: “The globe is never so black and white.”
On the hack of FTX
Shortly afterward FTX filed for bankruptcy, watchers of blockchain transactions noticed someone had transferred hundreds of millions of dollars out of the visitor. I asked Bankman-Fried what was up.
On what’s next
Bankman-Fried says his No. i priority at present is to try to enhance $8 billion to make account holders whole. “That,” he told me, is “basically all that matters for the rest of my life.” Just while he said that “a month ago I was one of the world’s greatest fundraisers,” that $8 billion dwarfs what FTX was able to raise so far, there’s no indication whatever investors would seize with teeth, and fifty-fifty if he could secure funding, it would likely crave both creditors and the defalcation court to get on board.
This morning, I emailed Bankman-Fried to confirm he had access to his Twitter account and this conversation had been with him. “Still me, not hacked! Nosotros talked terminal night,” he answered.
His lawyers did not return a request for comment.
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