The Five Revelations of Sam Bankman-Fried

How we learned the real story of FTX, bit by infuriating bit – all of it implicating not just SBF, but the entire culture surrounding him.

A year and a half ago, I barely cared about Sam Bankman-Fried. Now, well after it’s fashionable, when many, many people probably think his story has been fully told, I can’t stop thinking about him.

By November of 2022, I had already been writing about cryptocurrency and fraudsters for many years. Within a few days of the collapse of FTX that month, it was obvious to me that I would be writing a book about simultaneously the most successful and the most fascinating entry in the genre.

I first tried to articulate what I hoped to accomplish in a book back in November of 2023, just after Bankman-Fried’s conviction. But as I’ve kept watching and digging, those goals have evolved with my growing understanding of the fraud, Sam’s accomplices (criminally indicted or otherwise), and the broader conditions that made it possible.

At every level, I have found that FTX is just a step removed from some of the most elite structures of institutional, political, financial, and ideological power. FTX is not simply an aberration, not just one man’s rampage – it is a fraud that implicates many aspects of our social structure that we consider perfectly normal.

What follows is an updated attempt to lay out a few of the book’s central ideas. Part of this newsletter’s promise is to give a kind of behind-the-scenes look at the process of a larger project like this, and sketching out the core thesis of the book in posts like this helps me fine-tune the pitch as I take the project to agents and publishers. The latter half of this newsletter gives premium subscribers more detail about what that publishing search involves.

If you want more work like this, please consider a premium subscription, which grants access to a large archive of pieces exploring related ideas. Word of mouth is also very valuable: please tell all your friends about Dark Markets. Reader support is genuinely critical to getting the book published in the current environment, and will help make sure the true story of Sam Bankman-Fried doesn’t wind up lost to the mists of time.

The Five Revelations of Sam Bankman-Fried

Readers of my work at CoinDesk, Unchained, and in this newsletter have seen my obsession with SBF grow steadily over the past 18 months, even as his massive crime slowly fades from public consciousness.

From the start, the root of my obsession has been anger. Anger at the crime itself, yes – but more than that, anger at the shameless way the public has been lied to about Bankman-Fried, by some of the most powerful people and institutions on Earth. Anger at the way those lies cover up the broader exploitative patterns of our society.

Those deceptions, thankfully, have fallen away, bit by bit, in a series of revelations that deepened the picture of what really happened at FTX. But even now, the full story hasn’t made it’s way to the public. I was recently reminded that even many engaged Twitter users and people involved in crypto missed tantalizing details of the case that are now part of the public record – particularly the complicity of Sam’s parents.

At first, I thought news outlets like The New York Times were simply getting it wrong. But it has become clear that Sam’s family and class allies have circled the wagons to create a sometimes brazen elite conspiracy to obfuscate what happened. Apologists have worked to conceal and distract from the way Bankman-Fried’s crimes were abetted by power players as diverse as Stanford University, major venture capital funds, the New York Times, author Michael Lewis, the hedge fund Jane Street, Oxford University, and both U.S. political parties.

Five moments over the past 18 months have reshaped how I thought about Sam Bankman-Fried. They followed two years of nearly wall-to-wall hagiography of Bankman-Fried. It’s understandable that the public might have had trouble absorbing every detail as the entire facade came crumbling down.

1. Sam Bankman-Fried is a Sociopath

Michael Lewis’ Going Infinite, released in October of 2023, is the single largest culprit in the campaign to obscure Sam Bankman-Fried’s crimes. Yet what makes the book both infuriating and endlessly fascinating is that, within its framing of Bankman-Fried as an innocent little boy who made a few innocent mistakes, it contains a multitude of clues to who Sam really is.

That includes a series of truly bizarre anecdotes about Sam’s behavior. Lewis tells stories about Sam’s sadism towards coworkers at Jane Street, behaving so aggressively he has to be reprimanded by his bosses at a hedge fund. Lewis also reveals details about what Sam and his family have referred to as his “anhedonia,” including his confession that he taught himself to simulate normal emotional responses.

It was in reading this strange document during the first weeks of Sam’s trial that I first came to the conclusion that Sam Bankman-Fried displayed signs of being a sociopath – part of the 4% of the human population who don’t have a moral conscience. I wasn’t the first to have this insight, and it was dramatically vindicated both by Sam’s own testimony, and by the assessment of Sam’s character given by Judge Lewis Kaplan at sentencing.

It will be hard for many to swallow the idea that Bankman-Fried is a sociopath, because he made so much hay of his philanthropic goals. Why, if he has no native conscience, was he so seemingly concerned with making the world a better place through so-called “Effective Altruism”? In fact, though, I think SBF makes manifest the criticism that has been lodged against charity in general, and EA in particular – that it’s a performative gesture meant to distract from a rapacious underlying reality.

Or, more simply, Sam Bankman-Fried demonstrates that elite philanthropy is the performative mask of a ruling class that actually doesn’t give a damn about you.

Read more: “On Sam Bankman-Fried, Michael Lewis Gets it Dangerously Wrong.”

2. SBF’s Parents Were Accomplices … or Worse.

In the wake of FTX’s collapse, Sam’s parents Barbara Fried and Joe Bankman have been revealed to have played a much more substantial role in its operation, and their son’s crimes, than was previously understood.

Just as interesting, it has become increasingly clear that the parents’ ideology, and Barbara’s utilitarianism in particular, played a role in helping Sam rationalize his criminal behavior.

The bombshell revelations hit Joe and Barbara just before Sam’s criminal trial began, in September of 2023, when the FTX recovery estate filed an incredibly damning civil suit against Joe and Barbara. The suit included details of the $16 million mansion and $10 million unencumbered gift they received from FTX. It also included email correspondence in which Joe demanded a $1 million salary for his advisory role, and emphasized Joe’s role in hiring Dan Friedberg, then already a known miscreant.

The suit also included some totally mind-boggling emails in which Barbara Fried appears to directly advise Sam Bankman-Fried to engage in a straw donor scheme in funneling money to her political action committee, Mind the Gap. That money would later be revealed to have consisted of roughly 80% embezzled customer funds.

I first started looking at Barbara’s philosophical and ethical writing in December of 2022, the first time John Ray III indicated they were being examined for culpability. That was my first pass at “Beyond Blame,” the short treatise on determinism and criminal justice that I later broke down at more length in the two-part analysis Sins of the Mother.

Joe and Barbara’s entanglement opens up even wider connections. While Barbara funneled FTX funds to the Democrats, Joe pushed for big donations to Stanford, which is itself more broadly implicated in technology investment fraud, including both Theranos and the current wave of AI hype.

Read More: Sam Bankman-Fried and The Stanford Parent Experiment

3. Effective Altruist Leaders Covered for Sam’s Early Screwups

In March of 2023, Time Magazine’s Charlotte Alter published a brilliant report that finally put meat on the bone of some rumors about the early days of Alameda Research. Alter reported that Will MacAskill, Oxford professor and cofounder of Effective Altruism, had been warned multiple times in 2018 and 2019 that Sam Bankman-Fried couldn’t be trusted, and might have engaged in sexual impropriety. Other EA leaders were also warned.

The strong appearance is that MacAskill and others didn’t sound any alarms about Bankman-Fried’s reported misbehavior because they didn’t want to lose access to Bankman-Fried’s flow of funds. Nick Beckstead and Holden Karnofsky were among those who were warned about SBF, and they later headed major initiatives funded by (partly stolen) FTX funds.

As with Sam’s parents, this material complicity in the fraud is paired with what many have argued is ideological complicity. Effective Altruism was the perfect cover for Sam Bankman-Fried’s quest for personal power and glory, which seems to have been his true goal – even if he wasn’t entirely aware of that himself.

The connection between SBF and Effective Altruism is fascinating most particularly in the ways that the man and the ideas seem to amplify and enable one another’s worst impulses. Without any apparent moral intuition of his own, Sam Bankman-Fried must have found the mathematical, ‘logical’ arguments of the EAs entrancing, and likely reassuring. Bankman-Fried was at least self-aware enough to recognize, and be abstractly disturbed by, his own lack of native human empathy, which surfaced in some of his communications with (as well as his abusive actions towards) Caroline Ellison.

Simultaneously, by bringing a huge new source of funding to Effective Altruism over the course of just a few years, Bankman-Fried posed a moral quandary for the movement’s founders – one in which their vaunted ethical framework did not wind up looking very ethical at all.

Read More: Inventing an Altruist: How Sam Bankman-Fried Faked Morality

4. Venture Capitalists were Happy Not to Look Too Closely

Just a few days after FTX stopped processing customer withdrawals, something very, very funny happened. Sequoia Capital – name for a tree widely associated with California and Stanford – drew a huge amount of attention to its prior investment in FTX by deleting a fawning profile of Sam Bankman Fried.

Sequoia had commissioned the profile and published it on it’s own website, making it what’s known as “owned media” – because publishing something this stupid is a great way to get owned. The profile may have been the first place to include awestruck descriptions of SBF playing video games while in meetings, behavior that in less elite circles is known as “being a lazy fuckup.” Michael Lewis would do the exact same soyfacing a year later – in his book Lewis seems awestruck that SBF can play a low-IQ brawler while barely paying attention to Ana Wintour over Zoom.

In short, the Sequoia team were made to look shallow and vapid.

It soon became clear that the same accusation could have been lobbed at many of SBF’s investors, who gave him multiple billions of dollars not only without any pre-deal due diligence, but without demanding oversight or control in the form of board seats. In both ways, the venture capitalists – or more precisely, the culture and structures of venture capital – enabled Sam Bankman-Fried’s crimes.

What remains to be examined here is whether this is actually anything too unusual – or if, again, the practical complicity of the VCs speaks to some unspoken general principle.

5. Even the White-Shoe Law Firm Was Complicit

In February of this year, a group of FTX creditors filed a class action suit against the law firm Sullivan and Cromwell, which both advised FTX while it was in business, and continues to manage the firm’s bankruptcy liquidation.

Among other allegations, the most explosive is that Sullivan & Cromwell counsel became aware of the “back door” in FTX software that allowed Alameda Research to “borrow” an unlimited amount of customer funds. The suit cites large subsequent contracts awarded to S&C, clearly suggesting that the firm failed to blow the whistle on fraud because it was expecting future high-dollar contracts.