Sam Bankman-Fried Blames Everyone but Himself for FTX's Collapse

In private writings leaked to the New York Times, the FTX founder was concerned about being “one of the most hated people in the world.”

AccessTimeIconSep 15, 2023 at 6:38 p.m. UTC

The New York Times recently got hold of a trove of writings from Sam Bankman-Fried, supposedly from when he was under house arrest. While the most interesting parts are yet unreleased – like a 70-page Twitter thread reportedly offering the ex-CEO of FTX’s “side” of the business failure – there are notable quotes and details that shed further light on SBF’s state of mind before and after the collapse of his crypto empire.

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Most notably, Bankman-Fried still seems unwilling to take any responsibility for what happened — or even register that $8 billion *somehow* went missing, people lost life savings or that he could spend the next decades of his life rotting in prison. And, somehow, his biggest regret still seems wrapped up in his fallen public persona, as if the weekly court hearings and ongoing bankruptcy process are a detour from his life as a magnanimous, beloved statesman he was destined to live.

“I’m broke and wearing an ankle monitor and one of the most hated people in the world,” Bankman-Fried reportedly wrote. “There will probably never be anything I can do to make my lifetime impact net positive.”

To be fair, the NYT gave no indication of the real context of why or when Bankman-Fried wrote this down, and it is essentially a personal diary that was leaked to the press. But: What. The. Hell. How unbelievably self-involved does a person have to be to write that they feel broke after losing so much money for so many people.

It’s true Bankman-Fried’s lifestyle came crashing down along with his company — he had a taste for luxury real estate, private jets and on-demand delivery. It’s all just another example of how his reputation as a Corolla-driving billionaire schlub was a front.

Worse, he reportedly wrote: “And the truth is that I did what I thought was right.” Taken together with the line above, this is exactly the same “ends justify the means” mentality that got Bankman-Fried in trouble in the first place.

A lot has been written about SBF’s breed of “effective altruism” and why people who pursue profit at all cost because they think they’d be more impactful choosing how to give away their wealth is ultimately … ineffective. But a recent Bloomberg Businessweek article about SBF’s parents, the Stanford Law School professors Joseph Bankman and Barbara Fried shows again how certain philosophies have a family resemblance.

Bankman and Fried were supportive of SBF on his rise to fame, and remain so in his infamy – despite the fact that he’s thrown their multi-million dollar property in limbo by breaking bail. Bankman, in particular, was reportedly a familiar face at FTX where he regularly attended the closest things to board meetings the grossly mismanaged business had, and gave tax advice. Bloomberg reported that he was treated as a kindly old man, responsible for translating his sometimes hot-headed son’s comments and acting as a sounding board as SBF tried to determine the “right” move.

If SBF got his “business sense,” whatever that’s worth, from his dad, he seems to have inherited his mom’s entire system of ethics. SBF has a reputation as a leading consequentialist philosopher, the people who think seriously about the Trolley Problem – or abstract scenarios hypothesizing on whether it’s better to let a train run over one person or turn a lever that would kill many.

And so it was a family of would-be do-gooders, along with Gabe Bankman-Fried, Sam’s younger brother, who ran a charitable organization funded almost entirely by FTX dollars (and who spent his time daydreaming of buying a private island on which to do bleeding edge lifetime extension research without interference). But, like, aren’t consequentialists supposed to actually think about the consequences of their actions? Or were the Bahamian vacation properties always the end goal?

Although Bankman-Fried seems unwilling or unable to confront his own choices, in his private writing he seems to dote on the mistakes of those around him. Most regrettably, Bankman-Fried has seemingly constructed a narrative that his ex-girlfriend and ex-employee Caroline Ellison is really at fault. At one point, he literally writes that Ellison oversaw one bad trade that led to bankruptcies at FTX and Alameda. It was her who failed to hedge the hedge fund.

And while he was vaguely aware of the “Fiat@” account used to pilfer customer funds, SBF had nothing to do with it. Instead, dastardly lawyers at Sullivan & Cromwell, the law firm overseeing FTX’s bankruptcy, constructed the narrative that he misappropriated user funds.

It’s just odd, before he was caught up in a world of trouble, that Bankman-Fried was unconcerned with consequences and now that the ends he wanted are totally unreachable he remains unconcerned. It’s just a shame, considering that in a document titled “Truth” he said: “It’s something that I believe fairly strongly in.”

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Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.