THE WORLD OF crypto is protected by seemingly impenetrable terminology, intended, just as in the traditional finance sector, to make ordinary people feel as though they can’t possibly understand it.
So let’s start with a simple one: SBF stands for Sam Bankman-Fried. He’s 30 years old, and until a few weeks ago he was CEO of FTX, a cryptocurrency exchange, and a billionaire. He is now under criminal investigation, and his net worth is no longer believed to be in the billions.
While those of us who are crypto-sceptics might jump to the conclusion that FTX’s collapse is about the inherent dangers of crypto, that’s not quite the case. There are other factors at play, not least Bankman-Fried’s own calamitous mismanagement and shameless dishonesty.
In plain English, people invested money in FTX, then another company named Alameda Research (which is also owned by Bankman-Fried) borrowed a lot of that money to make investments. Then when customers tried to withdraw money from FTX, the company didn’t have the liquidity to pay withdrawals, so the whole thing collapsed. At various points during all this mess, FTX was endorsed by the likes of sports stars Steph Curry and Tom Brady, and even Larry David.
Bankman-Fried has reportedly been living in the Bahamas as part of a 10-person “polycule.” While that may sound like yet more crypto terminology, it actually refers to a grouping of people, all of whom are romantically involved with one another. The house’s fitness trainer, however, has told reporters that if anything his charges were “undersexed,” and were more interested in board games.
While there, he’s been followed around for six months by Michael Lewis, author of The Big Short, perhaps the most popular retelling of the 2008 financial collapse. An ambiguous omen at best.
Living this eccentric lifestyle, playing board games in pitch meetings, touting the value of ‘effective altruism’ – the philosophy that one should earn as much as possible in order to give away as much as possible – SBF was regarded as another billionaire in the oddball playboy mode.
But the way in which he has responded to his unmitigatedly disastrous business circumstances reveals him for what he is. Somebody who got rich, and started acting the eejit.
Bankman-Fried gave an interview to a Vox reporter through the medium of Twitter DMs, in which he copped to being a fraud – agreeing that his philanthropy was “mostly a front,” and that it was part of a “dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.”
Bankman-Fried also admitted that testimony he gave to congress asking for more sensible regulation of the crypto-finance industry was “mostly PR”.
In a move that is undoubtedly keeping his legal team up at night, SBF has chosen to follow in the mould of Donald Trump and Elon Musk, and simply post through it.
1) I'm sorry. That's the biggest thing.
— SBF (@SBF_FTX) November 10, 2022
I fucked up, and should have done better.
SBF has also been posting the kind of tweets and apologies that you might expect from someone whose tasteless tweets from their teenage years were discovered: “I fucked up, and should have done better,” “What matters is doing the best I can,” We are where we are, which sucks, and that’s on me,” etc.
His company has either lost or stolen a staggering $8bn dollars of investor money. So at first glance, while it seems as though the fall of FTX is about the problems inherent in crypto, it’s actually about the problems inherent in being an arrogant billionaire.
Which brings us to Exhibit B.
In the short time that he has been acting as Twitter’s owner and CEO, Elon Musk’s habit of tweeting major policy changes or even lay-offs via Twitter before speaking with any of his staff has already left him vulnerable to committee investigations by the US Houses of Congress, and lawsuits in countries with anything resembling protection of workers’ rights.
— Elon Musk (@elonmusk) November 18, 2022
On Thursday, Musk gave Twitter’s entire staff an ultimatum of committing to his new “hardcore” vision of the site — something which would include sleeping at the office and working double-shifts – or resign. Even if the most conservative reports are to be believed, Twitter has now lost enough of its staff that the actual infrastructure of the website is on course to fall apart, soon.
It is impossible to say why Musk, already the world’s richest man, whose former goals included putting humans on Mars and revolutionising transport with electric vehicles, would want to buy a loss-making social media site primarily used by journalists and shitposters, but a diagnosis of “ego and vanity” cannot be ruled out.
There is a persistent belief that Elon Musk has bought Twitter simply because he wants people to think that he’s cool, and funny, and edgy. This is made quite obvious by the fact that he has continued to post memes as Rome burns.
Unfortunately, it’s not possible to contain the story of either Sam Bankman-Fried or Elon Musk within an artefact that, once published, will thereafter remain unedited. It is more likely than not that either one of them will have voluntarily done something to further worsen their circumstances within mere hours of this article’s publication.
In fact, it is scarcely possible to do much else besides ridicule billionaires when they bring such karmic misfortune down on their own heads. But as easy as it is to dunk on the likes of Musk and SBF, the sad reality is that the true cost here will be felt in the pockets of ordinary people who see investments go up in smoke, their jobs treated as expendable, and – in Twitter – the decimation of one of the world’s most important global communication tools.
Schadenfreude is satisfying, of course, but it is more scary than satisfying to think that in the face of such wealth and vanity, schadenfreude is one of few consolations that remain.
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