The Confessions of S.B.F.

sbf interview
In conversation, Sam Bankman-Fried comes across as deceptively well-produced in a homespun way, as if he were a kid who got in over his head and is really, really sorry about what happened. Photo-illustration: Puck; Photos: Jonathan Raa/NurPhoto; Tom Williams/CQ Roll Call
Theodore Schleifer
December 6, 2022

Sam Bankman-Fried has given nearly a dozen public interviews, on nearly every media platform imaginable, in the month since FTX filed for bankruptcy, all against the advice of his lawyers. Bankman-Fried, after all, is under investigation for misappropriating billions of dollars of his own customers’ deposits to fund risky bets by his trading firm, Alameda Research, which it then lost. Meanwhile, Alameda extended S.B.F. a personal loan for some $1 billion. Countless people, from amateur crypto traders to institutional investors, have lost a fortune.

I can understand why some people worry that S.B.F. is being given too much license to author his own narrative. His ubiquitous, Buttigieg-esque P.R. strategy has offered the media some extraordinary human theater. In conversation, S.B.F. is meek, halting, and sad, but also prone to startling evasion and dissembling when asked about specifics, like what happened at Alameda, or whether he is worried about going to jail. He comes across as deceptively well-produced in a homespun way, as if he were a kid who got in over his head and is really, really sorry about what happened.

On Monday evening, it was my turn. Sam, still wearing a FTX-branded t-shirt despite the company now labeling him a “complete failure,” called me from his bunker in The Bahamas, patched through by his new crisis P.R. handler Mark Botnick, a former aide to Mike Bloomberg. Other financial reporters have already probed Sam about his conduct at FTX, which is now being investigated by the Department of Justice, the S.E.C., and other regulators around the world. Instead, I wanted to ask him about the worldview behind his catastrophic decision-making—the political and philanthropic objectives, now under question, that might have clouded his judgment.

Over the course of 45 minutes, during which Sam occasionally played Storybook Brawl on his computer, we discussed his legal and media strategy; his bruised relationships with his brother Gabe and his mentor Will MacAskill; how his “earn to give” philosophy might have factored into his misdeeds; and his assertion that he was secretly a G.O.P. mega-donor. The following has been lightly edited for length and clarity.

Why are you talking to people like me? Both of your parents are law professors. Is this part of an incompetence defense?

By and large, I’m just trying to say what I think happened. That is what it is. And to the extent there’s a strategy, I felt like the discourse was actually getting—it’s not surprising to me that it was very negative on me, and it deserved to be very negative on me—but that it was getting even a little bit untethered from that. There are conspiracy theories being floated around. 

The point at which it started to become a bit of a farce to me when it started to focus on a partying culture at FTX. I’m not a perfect person and I don’t even want to cast judgment on whether partying is good or bad. But I literally didn’t have a sip of alcohol until I was 21. I have about half a glass of hard cider a year. And I never get high. For better or for worse, that isn’t me at all. And that wasn’t the company culture at all. And it just felt like it got so untethered. I felt like at this point the only thing I have left is the truth. There’s no hiding.

There is a possibility you go to jail.

Oh, yeah. 

It just seems like you care about your perception a lot more.

But I don’t have the ability to keep things out of the public eye. Things are getting there one way or another. The only thing I have left is saying things that are true and aren’t getting said. 

Wherever that lands, it lands. Anything was better than letting random conspiracy theories lead the day.

Rep. Maxine Waters, the chair of the House financial services committee, asked you to testify before Congress on December 13. On Tuesday afternoon you said you need more time; she responded that she isn’t buying that. Are you going to testify?

I haven’t answered that yet. I want to be able to be helpful when I do.

But she’s saying come now. You’re talking to me, you can talk to them.

I want to be in a position where I could give the answers that I think are important to the committee and the nation. And I’m not going to be able to be confident on a lot of those answers right now. And my worry is that at a later point I may be able to give more fulsome ones and more confident ones. But I acknowledge that. I’m going to try and do a review over the next few days of what exactly I can become confident in and how I feel about it.

Have you spoken directly with anybody who lost their deposits at FTX?

I’ve talked with a number of employees who did. Who not only lost deposits but also had devoted a significant period of their life to fighting with and for FTX. And then I’ve talked online with some customers who did as well.

Obviously the impact is financial for people, but I think it’s personal for them as well in a lot of cases. That means that everyone approaches it differently. I think some people are angry. Some people want to yell at me. Some people are sad. Some people are confused and want to hear from me. 

I have always wanted to understand how you had so much personal liquidity to take a $650 million stake in Robinhood, to invest hundreds of millions in Anthropic, and spend tens of millions on politics and philanthropy. Where did that money come from?

At the end of the day, dollars are fungible, which means that it’s not trivial to answer the question of where $1 in particular came from. But my basic sense is that the bulk of it just came from trading profits from Alameda. Between 2019 and just reaching 2021 or so, all told, Alameda had, I think, a couple billion dollars of trading profits, and then had obviously a whole lot more in market profits, although that all crashed, I think, this year.

If money is so fungible, as you’re saying, couldn’t someone argue that money from customers was effectively being funneled into your passion projects? FTX loaned customer funds to Alameda, which then loaned you $1 billion. Was the only reason you were able to fund all these passion projects because there was some customer somewhere who was essentially subsidizing what you wanted to do with their money?

My sense of it is that that doesn’t fit with the order of things. Most of the expenditures that we’re talking about here, most of the investments, are basically early 2022. Some in late 2021. Some mid-2021. Which is right during and after the period where Alameda had made most of its trading profits. 

The bulk of Alameda’s open margin position, which ultimately blew out from FTX, came after then, in mid- to late-2022. And so I think that from a timing standpoint that it was somewhat clearly coming from trading profits rather than coming from an FTX margin position.

But if every dollar is fungible, if you make a donation to a candidate in September 2022, that dollar is coming from your bank account, right? And that dollar could have come from one of your customers.

I don’t fully know the answer to that. But I think, from what I have been able to put together, that if you add up all the personal contributions, all the donations that I had made, I guess all the personal spending, even though there wasn’t that much of it, it still is substantially smaller than what Alameda’s trading profits had been.

But where is the $1 billion that you loaned from Alameda? Can you itemize for me how exactly that was spent?

That loan came from trading profits. Personal loans as well as company investments are things I’m counting as coming from company profits.

Investments in FTX US and other companies is ultimately where a lot of that ended up. But the personal loans—for one reason or another I guess legal thought it made sense for me to make an investment rather than for FTX to do so or for Alameda to do so, or for any other entity to do so. I’m not sure exactly why in all cases that was. But yeah, basically we viewed it as effectively the loan came from trading profits and then that went to investment or contributions.

You could argue that Alameda was effectively financing your spending. Whether it was a new computer or a donation to Guarding Against Pandemics or your stake in Robinhood. That the dollar ultimately came from someone else.

I totally hear you on that, and to some extent it’s a question of words. But the way that I was thinking about it was that loans and personal contributions and things were coming from trading profits, and I think added up to a substantially smaller number than what historical trading profits had been for Alameda.

You said the other week that you thought you were one of the biggest conservative donors through dark money. What were you referring to? Because I talked to a lot of people who aren’t aware of anything at a scale like that.

I don’t want to go into detail. I was active in primaries both on the Democratic side and on the Republican side. Those are cases where it’s two people running against each other from the same party. And so it’s explicitly not meant as helping one party fight against another.

But you spent $40 million, at least, in disclosed giving in Democratic primaries. You think you spent $40 million in undisclosed giving in Republican primaries?

I don’t want to talk about the details of it, but I did do some. 

How much would you say you donated to political and nonprofit causes over, say, the last two years?

I want to say a few hundred million.

$200, $300 million?

Something in that ballpark. That’s not counting for-profit investments.

Can you confidently say, for the record, that there was no financial impropriety on the political and philanthropic side of your work?

I don’t believe there was any. I don’t think there’s any. And obviously I’m not omniscient, but I don’t think there was any. 

You often talk about the philanthropic stuff you’ve done as separate from FTX. But do you think “earn to give,” your motto, and part of the effective altruism credo, encouraged you to take risks? To do whatever you needed to do to “earn” enough to spend $1 billion, for instance, on the 2024 election?

You can imagine a world in which there is a trade-off like that, but in practice, very few things are as large in a positive direction as the biggest negatives are in the negative direction.

I was absolutely willing to risk the business not growing, or some of my personal money, for an opportunity and a chance at being able to do a lot more. But if you look at what ended up happening, it’s incredibly bad. And it undermines the good that I was trying to do, and it’s just a really, really bad outcome.

But did your effort to earn as much as possible—to grow FTX and grow Alameda as much as possible—cause you to ignore warnings or not put up guardrails?

What it feels to me is that it’s not like I did some “rational calculus” where you say it made sense to have substantially riskier behavior or anything like that. And that this was a known, accepted, 10 percent outcome and that was worth the risk. That’s not what it felt like, and I don’t think that’s what it was. Because even a 10 percent chance of this would be very bad.

What it felt like was that I got less grounded; I got some version of the ailment that I had prided myself on not falling to. That I felt like I saw a lot of other companies and leaders and was something that sort of made us stand apart. And obviously, I wasn’t as immune to that as I’d like to think I was.

By summer 2022, I was spending a quarter of my time on policy in D.C. I was spending a quarter of my time on branding. I was spending a quarter of my time on people management. And that’s three quarters of my time right there. And that’s three quarters of my time and energy and effort that were not being spent on, What’s actually fucking going on? That was true in terms of risk management, which was a huge fucking area, a huge important area that I didn’t give much thought to.

When you talk about your mistakes, you talk about your intent. Your mother once described you as a “take-no-prisoners utilitarian.” Shouldn’t your intent be irrelevant? 

Except to the extent that it’s predictive of the future. But yeah, at the end of the day, I do think that, what happened happened, and whatever I was thinking or not thinking or trying to do or not trying to do, it happened. And that sucks. That’s really bad. A lot of people got hurt. And I think that, thinking about why it happened, there are some perspectives from which it matters, including trying to figure out what to do going forward. But that doesn’t change the fact that it happened. And as you said, I’m not expecting people to say, Oh, that’s all good then. Sam didn’t intend for me to lose money. I don’t miss that money anymore. That’s not how it works.

One of your close personal mentors, the effective altruism philosopher Will MacAskill, has disavowed you. Have you talked with him since?

I haven’t talked with him. [Five second pause.] I don’t blame him. [20-second pause and false starts.] I feel incredibly bad about the impact of this on E.A. and on him, and more generally on all of the things I had been wanting to support. At the end of the day, this isn’t any of their faults. 

This fucked up a lot of their plans, and a lot of plans that people had to do a lot of good for the world. And that’s terrible. And to your point, from a consequentialist perspective, what happened was really bad. And independent of intent or of anything like that, it’s still really bad.

Have you talked with your brother Gabe, who ran your Guarding Against Pandemics group? Are you worried, frankly, that you might have ruined his career too?

It doesn’t feel good either. Like, none of these things feel good.

Have you apologized to him?

Yeah, I spent a lot of last month apologizing, but I don’t know how much the apologies mean to people at the end of the day. Because what happened happened, and it’s cold comfort in a lot of ways.

I don’t want to put words in his mouth. I feel terrible about what happened to all the things he’s trying to do. He’s family, and he’s been supportive even when he didn’t have to be. But I don’t know what’s going through his head from his perspective, and I don’t want to put words in it.

Do you think someone like you deserves to go to jail? On a moral level, doesn’t someone who has inflicted so much pain—intent be damned—deserve it? There are a lot of people incarcerated in this country for far less.

What happens happens. That’s not up to me.

I can tell you what I think personally, viscerally, and morally feels right to me. Which is that I feel like I have a duty to sort of spend the rest of my life doing what I can to try and make things right as I can.

You shocked a lot of people when you referred in a recent interview to the “dumb game that we woke Westerners play.” My understanding is that you were talking about corporate social responsibility and E.S.G., not about effective altruism, right?

That’s right.

To what extent do you feel your image and donations gave you cover? I know you say you didn’t do anything wrong intentionally. But I wonder how much you were in on the joke.

Gave me cover to do what, though? I think what I was in on, so to speak, was that a lot of the C.S.R. stuff was bullshit. Half of that was always just branding, and I think that’s true for most companies. And to some extent everyone knew, but it was a game everyone played together. And it’s a dumb game.