Sam Bankman-Fried's Self-Incrimination Tour

FTX and Alameda Research founder Sam Bankman-Fried has spent the week on what may be a genuinely unprecedented media tour, sitting for a series of extended interviews, even in the face of his likely imminent arrest for criminal financial fraud.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

One of those interviews, with the New York Times’ Andrew Ross Sorkin, was already scheduled before the unmasking of FTX and Alameda in November. But Bankman-Fried also sat for a surprise interview with George Stephanopoulos at ABC’s "Good Morning America."

On Thursday night, he subjected himself to a sometimes hapless but undeniably intense grilling in a Twitter Space. We also got a new interview with Jen Wieczner over at New York magazine. A novice crypto enthusiast named Tiffany Wong released a prior conversation. There’s probably more to come.

There’s some strategy to this. Bankman-Fried wants to tell the world his version of events, according to which FTX was brought down by the larger crypto market slump and, at worst, his inattention to detail. As I’ve detailed both in excruciating detail and in more convenient tweet form, this is disconnected from reality. Sorkin and Stephanopoulos, to their credit, didn’t appear to buy it.

Meanwhile, Bankman-Fried has admitted that his legal advisers really, really wished he wasn’t doing this media tour. It’s seemingly why his prior legal team fired him as a client. It was very good advice, because he has wound up directly implicating himself in a variety of ways.

See also: What a Securities Lawyer Would Ask FTX's Bankman-Fried | Opinion

SBF has repeatedly seemed to admit to, or come close to admitting to, specific corrupt practices at FTX and Alameda. Some of these were previously either contained only in dry legal documents or just merely suspected. These statements – in his own words, and on the public record ­– could prove extremely harmful to him in a courtroom.

A few highlights in brief:

• Though couched in obfuscated language full of strategic omissions, Bankman-Fried has effectively admitted to commingling funds between Alameda and FTX, under admirably sustained questioning from both Sorkin and Stephanopoulos.

• In the interview with Wieczner, Bankman-Fried effectively admitted to Alameda’s special exemption from margin rules. Bloomberg’s Matt Levine unpacks this in depth here.

• In the Twitter Spaces event on Thursday, Bankman-Fried seemed to admit that when some customers bought bitcoin on FTX, the exchange never actually purchased and held the BTC. That is, FTX was selling so-called “paper bitcoin” that appeared as BTC balances on the exchange but that was unbacked by any real tokens on the Bitcoin blockchain.

And these are just examples: There’s almost certainly a lot more in there to be unpacked.

Bankman-Fried may think he’s insulating himself by couching these admissions with caveats like “I believe” and “that’s my impression.” But given he was the CEO, with ultimate oversight responsibility, these hedges may not accomplish much in court.

So why?

There are a few ways to explain the incredible overexposure that Sam Bankman-Fried has thirstily pursued in recent days.

The most obvious is that, while Bankman-Fried is defying whatever legal and PR advisers he can still afford to pay, he is nonetheless pursuing a “strategy” of his own devising. Despite the admissions above, he is advancing an obfuscated version of events according to which he was hapless, distracted and not really in charge of anything going on at FTX. In effect, he is building the foundation for a criminal defense in which he would be portrayed as incompetent, but not criminal, with Alameda Research CEO Caroline Ellison perhaps thrown under the bus in his stead.

Sam isn't behaving like a renegade who is ignoring the advice of his lawyers

He's behaving like he has a world class crisis management firm and legal team constructing a very specific and deliberate public narrative

— punished nic (@nic__carter) December 1, 2022

Bankman-Fried’s self-presentation in these interviews seem almost tailored to buttress the impression of ineptitude and distraction. In his conversation with Sorkin, Bankman-Fried jittered nervously. With Stephanopoulos, SBF avoided eye contact and hunched into himself meekly, like a naughty child begging forgiveness of an indulgent parent. Such body language could certainly be coached. But this approach – what you might call the “smol bean defense” – recently failed Theranos fraudster Elizabeth Holmes, who is on her way to federal prison.

But the more interesting and likely theory is that there is no strategy here at all – just a cornered man following his worst instincts into some very bad decisions. Dan Primack at Axios floated the idea that Bankman-Fried is simply feeling lonely and isolated, is psychologically incapable of handling that and is turning to journalists as surrogate friends.

Few thoughts after the @SBF_FTX media tour:

1/ He's obviously doing this in large part to save his reputation, but also perhaps a bit because he's lonely and reporters will talk to him (his recent letter to ftx employees hints at how he feels he lost his friends and "family")

— Dan Primack (@danprimack) December 1, 2022

CoinDesk podcast host Nathaniel Whittemore did some similar psychologizing, positing that Bankman-Fried was suffering from “congenital main character syndrome.” Bankman-Fried has spent the past two to three years at the center of public attention and praise, and, the theory goes, that’s very hard to give up.

See also: Let's Talk About the New York Times' 'Puff Piece' on SBF

In other words, Sam Bankman-Fried is just frantically licking up the final bitter dregs of public attention he can get, as he contemplates the ignominious end of his brief time at the top. The legal risk may feel insignificant, weighed against the chance for one final, intoxicating turn in the spotlight.