The problem with Sam Bankman-Fried? We wanted to believe in him | Josie Cox

On Thursday night, mere minutes after I finished reading the last few pages of Michael Lewis’s book about the dramatic rise and fall of erstwhile crypto king Sam Bankman-Fried, we were all presented with an addendum to the last chapter.

In Manhattan federal court, a jury of nine women and three men convicted Bankman-Fried of wire fraud and conspiracy to launder money. The 31-year-old had used his house-of-cards empire – FTX and its sister company, the hedge fund Alameda Research – as a flimsy front for rampant, irresponsible risk-taking, they found. The charges against him could carry a maximum sentence of 110 years (his sentencing is set for 28 March 2024 and he still maintains his innocence).

Bankman-Fried’s story is as wacky as it is wonderful. It’s a gift for headline writers, commentators, and those devoid of inspiration for interesting dinner party conversation. Did you know that he lived in a $35m “crypto frat house” in the Bahamas? That he considered paying a fortune to Donald Trump not to run for president? That he surreptitiously played video games while Anna Wintour tried to sweet-talk him into a Met Gala sponsorship?

Sam Bankman-Fried, right, on stage with Bill Clinton, centre, and Tony Blair at the Crypto Bahamas conference in April 2022. Photograph: Youtube

The gloriously outlandish nature of all of these anecdotes makes it tempting to think of Bankman-Fried and his crimes as something more brilliant and idiosyncratic than they are. But in a way, his greatest feat of genius was being so eccentric that he threw so many people – most notably those of us who should have known better, like journalists and policymakers – off the scent. He inspired us to collectively craft a totally nonsensical narrative around who he was and what he was doing – a portrayal so bizarre that we wanted to believe it, because it would just be such a damn good story to tell.

We came to think of him as a nerdy whiz-kid who was brazen enough to ignore the editor of Vogue, but who was also heroically altruistic and profoundly passionate about saving the world; someone who deserved to be lauded on the cover of Forbes and Fortune magazines, and share a stage with former world leaders. In reality, he’s an arrogant felon who committed a bog standard white collar crime: good old fashioned fraud and conspiracy.

What I take away from Bankman-Fried’s story, and particularly from its pitiful conclusion, is that too many people are still stumbling into the trap of mythologizing shiny new technology and the people who push it – be that a crypto boy-genius or the elvishly compelling Elizabeth Holmes and her sham diagnostics device that was meant to revolutionise healthcare.

Hungry for an innovation that would actually change our ailing world, we’re blind to the hubris, the misguided egos, the wishful thinking and – to borrow a term from history – the irrational exuberance. We want so badly to have a hero or heroine that we disregard any clues that things might actually be too good to be true. It is, after all, remarkable to consider that we might be living in a world in which a twentysomething bloke really can, in the space of a few years, amass a personal fortune worth $26bn from cryptocurrency. And so, to me this is yet another cautionary tale; a reminder that, fundamentally, capitalism is flawed, and greed is wildly powerful and frequently unbridled.

Throughout history, it’s always been the case that great injustices have been able to occur wherever great power has been concentrated in too few hands. New technology has created the means for individuals to secure once unthinkable power, which has allowed them to perpetrate crimes of a whole new scope and scale. But the nature of these crimes, at their core, is as old as time: stealing, cheating, lying. Only, now they’re dressed up in fancy, fresh clothing.

It seems Bankman-Fried had a habit of thinking in terms of everything being either net positive or net negative. In some personal writings that leaked to the press after his arrest, he surmissed that there was now nothing he could do to make his “lifetime impact net positive”. He might have been right, but the inherent sense of scepticism that some of us have hopefully developed as a result of watching this sorry saga unfold is, to my mind at least, a good thing. May we cling on to that cynicism for as long as possible. The next fraudster is no doubt lurking in the wings.

  • Josie Cox is a journalist and broadcaster specialising in business, finance and gender equality. She is the author of Women Money Power: The Rise and Fall of Economic Equality, out in March 2024

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