It’s been an exhausting week for every person even remotely involved with the cryptocurrency industry. The collapse of FTX and Alameda Research has brought with it what would normally be written off as “FUD,” or fear, uncertainty, and doubt.
For the first time, it’s accepted as possibly worth listening to.
Exchanges are scrambling to show ‘proof of reserves’ (apparently customer funds are reserves now). Traders are telling people to get their funds off exchanges; executives are tweeting to calm markets. All in all, it’s a collapsing circus tent filled with clowns.
But there’s only one man who can claim the title of ringleader at the circus: Sam Bankman-Fried (SBF). While the disgraced founder and CEO continues to tweet, likely against his attorney’s wishes, he generally makes a mockery of himself and the industry he calls home.
Protos has passed the time by going back and watching hours of past interviews.
Just one month ago, Bankman-Fried said he had plenty of cash to spare — depending on how you look at it. “I think [we have] upwards of a billion dollars. There’s some definitional issues here which are worth noting around regulatory capital… but we still have a fair amount of dry powder.”
In that same interview with Bloomberg Crypto, SBF responded to criticism that he held too much influence over the industry:
“I mean, I would love someone else to go backstop the industry. I think it’s better for me to do it than for no one to… My goal is not to be monopolizing, my goal is to make sure that customers are protected.”
Here’s a few more interviews that look quite different in the light of day.
SBF felt “good” about the impact he’d have
SBF appeared on crypto journalist Laura Shin’s Unchained Podcast in October. She asked him how he planned to manage risk.
“I think there are a lot of things you can do that help quite a bit… A big piece of this is taking actual collateral and being careful about what that means…
“A lot of people thought they had taken collateral from 3AC. Some of those had actually taken collateral. Others [took on] the same GBTC as collateral that six other people had taken… Being ready to margin call people if necessary.”
Shin raised concerns over the lack of separation between FTX and Alameda. SBF replied: “It is really important that marketplaces act in a responsible manner here, and that they act in an agnostic manner. I think there have to be controls in place, there has to be oversight of that.
“What I’ll say is we do have those controls, we do have that oversight… We’ve gone over this with a number of regulators… One of the core things we value the most is that our marketplace is totally agnostic.”
SBF also weighed in on how he felt about the morality of his business. “Ultimately, I would not want to be doing something destructive with my day job and I don’t think I am… I feel good about a lot of the impact that I think we’re going to have.”
“We try not to empty the coffers”
CNBC interviewed SBF that same month, describing him as a savior and the “Michael Jordan of crypto.” They asked the entrepreneur — who they explained likes to sleep under his desk in a beanbag — about his recent crypto bailouts.
“What we basically came to believe was the following: First of all, it’s just backstopping customers and making sure they’re protected, but second of all, stopping contagion from spreading through the ecosystem, right?”
The reporter asked if the firm still had enough cash for another bailout. “Yeah, we do. And we try to keep that on hand, like we try not to empty the coffers, so to speak.”
Dipping into customer funds
In July, Bloomberg columnist Matt Levine also asked the entrepreneur why Alameda Research bailed out firms like BlockFi and Voyager. Bankman-Fried laid out a hypothetical scenario where a firm is out of funds — and suggested he can step in to prevent that firm from resorting to desperate and illegal actions like dipping into customer funds.
“For a relatively small incineration of money we can make [underwater firms] able to keep operating… and not cause contagion or [experience] customers losing assets… And they’re like okay, we need a buffer here so we can definitely pay salaries and not dip into customer funds. That makes sense, right?” Bankman-Fried joked.
Levine and the audience laughed. “Because otherwise they would [dip into customer funds],” the journalist said.
“Well, depending on the company, right?” Bankman-Fried replied. “Otherwise, maybe they would declare bankruptcy, or maybe they would dip into customer… whatever. There’s a lot of unpleasant choices there, right?”
Rigorous schedules lead to failure, SBF preached
In a Forbes interview six months ago, SBF explained how he ran his business, sharing tips about leadership, time management, and effective altruism.
“My schedule’s all over the place — that’s intentional,” he said. “If you have an incredibly regimented schedule, especially when you’re running a company, there’s no chance it’s gonna lead you in the right place.”
“I don’t have a lot of time for hobbies,” the then-billionaire explained later in the interview. “I play some League of Legends… quite badly. I watch way too much sports in the background. I like multi-tasking and so I will often have something up in the background.
“I play games… I daydream, play badminton.”
The entrepreneur also stated he’s learned “a huge number of small things” over the years, and one thing was how to manage a team.
“I was presented with times when members of our team disagreed with each other — disagreed with me, especially…”
“My job is to make sure, one way or another, that we do the right things and we get through them.”
“Crypto is a collective fiction”
Way back on a Solana podcast in 2020, SBF shared a curious hypothetical. “I would never do this, but at some point, when you see stupid enough projects, we all sorta sit back and we’re like ‘Oh goddamnit… let’s start making a lot of chains,’ ya know?
“Pass ‘em out to people and say, ‘Here’s your chain.’ Tell whatever story you’d like. Keep half the tokens, I’ll take the other half. You can thank me later for this idea.”
SBF implied everything wasn’t real, anyways. “I think crypto is sort of a collective fiction that we’re writing, ya know?”
So, where does it end for SBF? “You can only make so much money,” SBF said when asked this very question on the podcast.
“Well… I don’t know if that’s really true. There’s a limit to how much you can make doing this because… I don’t know, there’s only so much money that the world is able and willing to incinerate.”
SBF weighed in on the kind of legacy he wanted to leave behind back in May.
“I don’t think I give a shit about legacy. That’s not what matters… I think what matters is what impact I have on the world in the end.”
“It doesn’t matter if I make the world better or if someone else does — better is better. And if I can do anything to help other people help the world, it’s just as good. Obviously, some part of me would like my legacy to be generically positive, but, uh, I just don’t think that’s what matters.
“In the end, it’s the mark that we actually leave on the world — not the mark that we’re perceived to leave on the world — that matters.”