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The Rise and Fall of a Fictional Empire
On Bankman-Fried and his Hideous Girlfriend's Obvious Scam
“The first thing ambitious citizens who live in a republic seek is the ability not to be harmed, not only by private citizens but even magistrates: in order to accomplish this, they seek out friendships; they acquire these friends by apparently honest means, either by offering them financial assistance or by defending them from the powerful; and because this seems virtuous, they easily fool everyone.” - Machiavelli [Discourses, I.46]
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I was hesitant to write about the Sam Bankman-Fried saga for a few reasons. The first of which is I don’t have a specialized knowledge about finance, and had managed to not hear of the guy until his “fortune” began to collapse. Further, I’m a crypto skeptic [though I think it has some potential good applications] and thus I don’t know a lot about how crypto exchanges work [though I am now set up to receive crypto donations through Brave Rewards via my twitter handle!] Most importantly, “crypto bros” are insufferable and I don’t want to have to market to them nor deal with their ridiculous arguments about how what amounts to somewhat improved security will revolutionize the world. However, I do know about political corruption and buying politicians, which is a major angle of this story. Further, he straight stole from investors, so you don’t have to have any specialized knowledge, nor is it an indictment of crypto in general, beyond the well-known fact that there are sketchy people in the industry. However, what truly sold me on the story is that Sam Bankman-Fried’s [ex-]girlfriend and partner in crime [literally], Caroline Ellison, has got to be the ugliest woman a billionaire has banged in the history of billionaires. That made me sufficiently curious about this guy to do a whole article.
I mean seriously, what the fuck is wrong with this woman? She looks like a she has fetal alcohol syndrome and a disorder that prevented her from going through puberty. She is allegedly 28 but she looks like a horrifically ugly 15 year old. This is what a Jewish teenage girl would look like in a Nazi political cartoon. Sam Bankman-Fried must either be gay or a pedophile if he would date or even have sex with this woman. [The good thing about writing about a scammer going through bankruptcy is he is now in no position to defend himself from baseless accusations.] Either way, I think we know who wore the bra in that relationship, and it ain’t her.
Incredibly, he doesn’t appear to have been the only one to somehow find this woman sexually tolerable. She has opened up about having the typical sex life of a hideous woke person in the third decade of life on an equally typical Tumblr. If you want to lose your lunch, you can read about it in this horrific New York Post article. It’s being reported that the 10 main company leaders- presumably all hideous- were in some sort of adderall fueled mass polyamorous relationship [for real, they had an in-house psychiatrist, who is now denying- thus confirming- that he was an adderall factory for them.] I mean, Bankman-Fried is fat and unkempt, but he had a fortune, even if it was illusory, so you can at least imagine someone choosing to have sex with him. But Caroline? And it isn’t just a bad picture, and she isn’t smart or funny. Watch this video, her voice and mannerisms are as unattractive as her face:
There is one other possible answer to why not just Bankman-Fried but also a number of other people would choose to be involved with her [besides the well-used knees you can see in that video]: leveraging her presumed low self-esteem to leave her to take the blame. In a strange Twitter interview with Vox, Bankman-Fried purports that he believed Alameda Research, which Ellison ran, was able to cover the balance sheet. There’s something to be said about just blaming the ugliest person you could find- perhaps he’ll get away with it.
You should really read the whole interview: it is notable for the fact that both parties are wildly unprofessional and that Bankman-Fried may be the only person in history to be in this situation and not follow a lawyer’s advice to shut the fuck up.
Really in and of itself that people this ugly and uncharismatic could pull off a massive scam is quite incredible, generally looks and charm are part of running a confidence trick. However, they exist in a woke environment where the media wants us to believe Kamala Harris’s step-daughter is more attractive [and better dressed!] than Ivanka Trump. It’s a post-modern revolt against aesthetics and objective reality. It could get worse though, if this somehow turns out to be true you would have done well to invest in acid one can blind oneself with:
Anyway, onto the main story. As I am not a financial reporter nor do I desire to be one, I am going to copy two main summaries of the overall grift and then move on. Here is how Eric Salzman described the situation for Matt Taibbi’s consistently depressing e-zine America This Week:
“It’s irregular for a person to own an exchange as well as a trading firm because their owner might be tempted to “borrow” from his exchange customers’ accounts to lend to his trading firm, which of course is exactly what happened. Approximately $10 billion was “borrowed” from FTX customers and lent to Alameda, who in turn invested the borrowed money in illiquid crypto tokens, including the native token for FTX.Com, FTT. Here things went from bad to worse. The FTT tokens are created by FTX.Com for exchange customers to use to get discounted fees and other goodies when they trade. Alameda is the biggest owner of FTT tokens and used them as collateral to borrow from FTX.com customers, without their knowledge, to fund their $14 billion portfolio of illiquid crypto.”
Here is another description of the scam and the collapse from Common Sense:
“By simultaneously owning FTX, the exchange, and Alameda Research, the largest trader and market maker on the exchange, SBF was able to dictate the price of the FTT token and create the illusion that the value of the FTT token—and, by extension, FTX and Alameda—was substantial. He was able to use FTT like company shares, paying employees and vendors in FTT rather than U.S. dollars…
The dumping of the FTT token drove the token's price down beyond the capability of Alameda to support it. Then, with market signals of distress rising, FTX faced its own crisis as rumors of distress led to an unsurprising run on the exchange, as clients withdrew funds. That’s when we discovered SBF’s real game: He had used the assets of clients of FTX to prop up Alameda's balance sheet at some unspecified point and had built a backdoor into FTX’s accounting systems to evade detection. ”
I’m reminded of the episode of It’s Always Sunny in Philadelphia where the bar makes its own currency with no plan for how to turn it into real money, so in reality they are just giving away free drinks. He really didn’t have any plan but to pump his shitcoin and thus pretend it had value and then to rob his investors when things went bad. And rob he did. It seems a quite obvious scam if you aren’t enamored with crypto and weird woke losers, but he knew how to play the right people. In retrospect, this Bloomberg profile about how he is some sort of “capitalist monk” trying to give his fortune away is hilarious. He started with connections and used his “charity” for all the goodwill money can buy, becoming the Democrats #2 donor behind George Soros in the process, but he was defeated by the little problem that economics are a real thing.
Trung Phan wrote a wonderful summary of this whole situation titled, “FTX: The $32B Implosion” which includes this illuminating summary of his connections:
Basically he started as an insider’s insider in both finance and the Democrat Party. His mom started a fundraising organization and then her son miraculously made an enormous amount of money rapidly giving her a way to fund her organization. I don’t think he got ahead of himself and then had to make unethical decisions to survive, I’m sure he was corrupt from the start: his conspicuous “effective altruism” is transparent bullshit. That said, I’m pretty hostile to anything that is described as “data-driven.” People who value computer models over logic and intuition are destroying society. To me it seems he clearly just wanted to be an evil oligarch who condescendingly pretends to help the world. He went was far as to start some organization called “Guardians Against Pandemics”, which if I’ve learned anything in the last 2 1/2 years, probably did sketchy shit likely to cause a pandemic. Bankman-Fried did everything he could to get in with our woke elite- presumably believing that such connections would help cover his blatant criminality and lengthen the viability of his Ponzi scheme. The most notable of these things was his Crypto Bahamas event, essentially a marketing festival for the FTT “currency,” where he appeared on stage with Bill Clinton and Tony Blair. It’s kind of amusing that major former political leaders are so corrupt they will do something as degrading as give a talk sitting next to a guy in shorts and slumping socks who is looking at his phone the whole time, but they did.
Amusingly, Bankman-Fried admitted in a recent interview that wokeness is a scam, saying “I feel bad for those who get f*cked by it, by this dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.” It’s strange to me that this grift works on people, but I am a rational and traditional person. I don’t go to petulant youths spouting bullshit for my self-esteem. I expect trustworthy and reliable leaders to not dress like a hungover college student. I think the costume worked on them because the global woke elite has a faux-obsession with the moral purity and hipness of youth. I also think that as these are elderly people who don’t understand cryptocurrency at all, appearing to be some sort of eccentric plays with them. But to me it is no different than Zelensky and his ridiculous olive t-shirts- I can see that he isn’t a serious person [wear a fucking suit! Zelensky has visited the front lines like 3 times.]
Speaking of Zelensky, perhaps the most amusing part of this saga comes back to exactly where you would expect Democrats, corruption, and woke idiocy to merge: Ukraine.
In short, in the initial wave of Ukraine support and anti-enemy mania, Bankman-Fried started an initiative to support Ukraine with it’s FTT currency, including giving “$25 to every Ukrainian.” Further, FTX said at the time, “convert crypto contributions to Ukraine’s war effort into fiat for deposit” into Ukraine’s national bank so they can, “turn bitcoin into bullets, bandages and other war materiel.” Strangely, the website for the crypto drive was scrubbed from the Government of Ukraine’s website and made a standalone site shortly before the scandal broke out. What’s more, the number has changed by several millions and it’s not clear how long the initiative went on or what happened to the money. Given Ukraine’s corruption, Bankman-Fried’s proclivity to financial crime, and the chaos of the early days of the war, it is easy to imagine that this is not all above board. This is all compounded by the “convenient” timing of the website being changed, which could signal that Ukraine was tipped off by US regulators to cut ties with FTX. Still, clear evidence of wrong doing regarding this specific thing has not emerged, and this could be one of the hardest things to prove, especially as few journalists or government investigators will want to touch this story even amidst trying to get to the bottom of if FTX was always criminal. Regardless, the Ukraine connection is really the cherry on top of his comical attempt to be involved with every oligarch-supported “noble cause” in the country.
This upcoming conference Bankman-Fried was supposed to be speaking at is an incredible illumination of the elite he briefly infiltrated, and reminds me of the classic quip, “It’s a big club and you’re not in it”
Like Ukraine, FTX managed to get the support of the entire Western elite class, except Elon Musk, and in this case Larry David, by seeming like a scrappy underdog that was having an outsized impact on world affairs. David’s non-endorsement of FTX in this Super Bowl commercial is now hilariously prescient, though of course it does mean in real life they did take him in.
There has been some discussion about if celebrity endorsers should face any consequences, but you have to admit, though he was a paid promoter, Larry David simply does not endorse FTX in this commercial.
As far as Musk goes, he reported that Bankman-Fried tried to get in on buying Twitter, and everything about the guy set off his “bullshit meter,” as it should have to any experienced, responsible adult [our elites do not meet such a description.] Musk did not believe him that he had $5 billion in liquid assets, which now we know he quite obviously did not.
Now, as we wait to see if Bankman-Fried, Ellison, and the rest of their cronies go to jail, or if the donations to Democrats have been enough to save them, FTX has a new CEO, John Ray, who previously took over for Enron to manage it after it’s collapse [and did better at recouping investor losses than anyone should expect here.] While he knows what he is getting into, I cannot help but think of this Mitchell and Webb sketch about Donitz taking over after Hitler’s suicide, “They were hardly going to give me the job when everything was going well!”
Despite their love for destroying the lives of random people for thought crimes, the New York Times still wrote a puff piece about one of the biggest financial criminals of the modern era, so he must have successfully bought at least a degree of goodwill. They are concerned he isn’t getting enough sleep while it’s said his investors will be lucky to get $.05 on the dollar back. This is indeed clown world.
As with Bernie Madoff before him, the Bankman-Fried saga is illuminating about all sorts of problems within our society. Really, it’s the place where all the corruption and ridiculousness of our era intersect. It’s a sort of parody of the crypto industry as well as of ugly, over-medicated 20 and 30 year old progressives, and the sheer hypocrisy and corruption of our country’s elite. None of this would have been allowed to go so far if he wasn’t able to virtue signal that he was too good to do this sort of thing by proactively going along with their nonsense. As the chips fall, and politicians, charities, celebrities and others run from their connections to Bankman-Fried, one big question remains: if he dated Ellison as a billionaire, what will he be trying to crawl into bed with now that he is penniless?
UPDATE 11/19: This video where Bankman-Fried tells Congress the exact opposite of the truth about FTX is too humorous to not include:
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