The S.B.F. Chronicles, Part 1: The Bridge Loan to Nowhere

FTX founder Sam Bankman-Fried is led away handcuffed by officers of the Royal Bahamas Police Force in Nassau, Bahamas. Photo: Kris Ingraham/AFP via Getty Images
William D. Cohan
December 21, 2022

Last September, Anthony Scaramucci’s SkyBridge Capital cut a deal with Sam Bankman-Fried’s FTX Ventures, the investment arm of his crypto exchange. S.B.F., then the richest Gen-Zer on Earth, agreed to buy a 30 percent stake in The Mooch’s hedge fund-of-funds for $45 million, valuing SkyBridge at $150 million, and giving him an option to buy up to 85 percent of SkyBridge after three years at a higher price. As I noted at the time, it seemed like a marriage made in crypto and SALT conference heaven.

And so The Mooch opened up his Rolodex to S.B.F, like any good business partner would. After all, The Mooch was 58 years old and had been working on Wall Street for 34 years, including two stints at Goldman Sachs, before venturing out on his own into the world of hedge funds. S.B.F., meanwhile, was just barely 30. He was allegedly long on wealth, but short on contacts and real-world experiences, after a short stint at Jane Street Capital, a relatively obscure but powerful hedge fund in downtown Manhattan. “He’s a DeFi guy who is probably going to move into some TradFi,” The Mooch told me a few months ago. “I’m a TradFi guy that’s moving into DeFi… almost like a chocolate and peanut butter, Reese’s Peanut Butter Cups sort of thing.”

This piece is the first in a series of articles about people who witnessed signs of S.B.F.’s folly early on. Like the other people you will soon meet, The Mooch had known S.B.F. for a while. Unlike the others, though, he didn’t see trouble coming until most of us did. He was, and remains, a crypto believer, and took much of Bankman-Fried’s infrastructure—the lawyers, the compliance pros, the financial docs—at face value. In exchange, The Mooch got a front row seat to the S.B.F. debacle as it was unfolding. The burn is still resonating.