Sam Bankman-Fried has opened up in a tell-all chat with citizen journalist Tiffany Fong, posted on popular YouTuber Coffeezilla’s channel.
Here’s the highlights.
Political donations
While much has been said about SBF’s massive political donations to the US Democrats, SBF said there’s more to the story.
“I donated about the same amount to both parties this year,” claimed SBF, before admitting to making off-the-record ‘dark money’ donations justified under Citizens United loopholes.
Why did he decide to keep his Republican donations secret? Image preservation apparently.
“The reason was not for regulatory reasons, it's just reporters freak the f** if you donate to a Republican,” said Sam.
Being dark money donations, it cannot be determined if his admissions are true or not, but his comments suggest that maintaining a ‘liberal’ image to the press was important to him.
Sam can’t code?
Sam tried in vain to resuscitate his image from (alleged) madcap fraudster to goofy kid in over his head.
Referring to the FTX backdoor that allowed his trading firm Alameda Research to tap into billions in users' funds, SBF called the allegations “definitely not true”.
According to Sam: “I don’t even know how to code, is the honest embarrassing answer… I certainly wasn’t building some backdoor in the system, I could barely use the system.”
This comes as a bit of a surprise, and yes, he backtracked in the very next sentence: “That’s not true, I knew the system pretty well from a user interface perspective, but I literally never opened the codebase.”
Despite SBF’s protestations, there is overwhelming evidence of an FTX backdoor, not built by SBF, but his business partner Gary Wang.
Sam spent the next few minutes framing a narrative of poor accounting processes responsible for the misallocation of user funds, as opposed to the widely disseminated, uif yet to be proved in the court of law, narrative of straight-up theft.
Bankruptcy regrets
Sam apparently regrets putting his crypto empire into Chapter 11 bankruptcy protection.
“I honest to God believe if I hadn’t filed for bankruptcy, all users would be whole and withdrawals would be on, on FTX right now,” he said, while also suggesting that the possibility of revitalising FTX is still there.
But considering that the incoming restructuring chief executive John J. Ray III professed that “never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” that could be Sisyphean task.
According to SBF, four billion dollars of liquidity came in after he filed for bankruptcy, but when pushed if he intended to add it to the estate, he said he is “working on it” while not providing evidence of the liquidity.
Customers will ‘not get nothing’
When Fong suggested that users, as unsecured creditors, will get none of their trapped funds back via Chapter 11, Sam replied: “Well, I mean, not nothing” and posited that FTX International users could receive “25 cents on the dollar… something like that”.
But what he failed to mention is just how much illiquid crypto assets are at play, including the FTT token that he himself minted.
Ultimately, now that SBF has been displaced as chief executive, the outcome of the Chapter 11 is not in his hands.
He had some choice words for the current trustees of the bankruptcy estate: “(The trustees) would rather burn it all to the ground out of shame than attempt to find a way to bring more value to customers.”
Salacious gossip
SBF made one point that this reporter tends to agree with, being the overwhelming focus from some corners of the press on his polyamorous personal life in the Bahamas.
That’s where the interview came to an all, so was anything to be gleaned from it?
Not really. Just like the other handful of interviews he recently agreed to, Sam tended to talk around the questions without taking explicit accountability for the actions inside FTX and Alameda Research.
The options seem to be: Was he a young go-getter in over his head, or calculated deceiver?
That questions will most likely be meted out by lawyers in the coming years.