Sam Bankman-Fried and the many questions that remain unanswered
SBF ran a sophisticated Ponzi that captured large swaths of American society.
Over the weekend, Sam Bankman-Fried (SBF), the one-time “crypto wunderkind” was found guilty on seven charges related to the fraud surrounding the rise and fall of his digital asset empire.
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Through his FTX crypto exchange and the Alameda Research trading firm, SBF and his collaborators scammed hundreds of thousands, if not millions of people, out of their hard earned money. Indeed, the victims of SBF deserve our empathy, but they are only one part of the much broader story.
For those of us familiar with the reality of the “crypto” space, a Silicon Valley-like endless series of predatory hype marketing vaporware “tech” scams, the Ponzi portion of the news was the LEAST surprising element of the SBF drama. In the Bitcoin space, many of us have adopted a couple worthy slogans that neutralize the likes of SBF. One is the Reagan-on-steroids mantra of “Don’t Trust, Verify,” which means that you should have a way to prove monetary accountability. SBF and his employees operated their schemes while presenting little to no evidence that they had any of the assets in their possession. Second, “not your keys, not your coins,” reminds you to take possession of your assets, and not lend them out to a sketchy exchange (or even one considered “reputable”) like FTX.
In short, nobody even vaguely familiar with the space that SBF occupied should be surprised at all about what happened. He and his allies are just one of MANY groups of people who do this kind of scamming on a daily basis. SBF’s victims — and there are many — will hopefully heed the lessons of the FTX collapse, and adopt the aforementioned mantras so that they won’t get fooled again.
But Sam Bankman-Fried story isn’t about a simple or sophisticated Ponzi scheme. It’s so much more than that. This is a man (man child) who, along with his cohorts, used his ill-gotten gains to influence the very pinnacle of American and global society. There’s lots of dirty money and even dirtier political capital floating around. And throwing SBF in prison for life might be a just sentence, but it does nothing to uncover any of the nefarious activity attached to his namesake.
From the very beginning of his rise to fame, it was clear that something was very off about SBF. Most notably, it was the lack of evidence that he possessed any talent and/or a high level of intellect. It would be unfair to call him Walmart Mark Zuckerberg. He was Potemkin Village Mark Zuckerberg.
Then, we have the underreported ties between SBF and the far-left Effective Altruism (EA) movement, which remains a robust community in very progressive cities, within policy shops, and on college campuses. EA’s most passionate and influential advocates helped to facilitate an early monetary infusion into SBF’s crypto fraud machine, and they also linked him up with the the upper echelons of the global ruling class.
There’s even a considerable Covid origin story attached to SBF’s partners and allies, which we reported on in The Dossier.
Sure, Sam Bankman-Fried is a con artist. But it seems that the American criminal justice system left behind his entire network and network of networks in pursuit of a single conviction. The SBF story is so much bigger than one man. It’s about a movement, an interconnected system, and the many components of a radical ideology.