FTX and Alameda Research founder Sam Bankman-Fried (SBF) has been on an aggressive media tour, but very little new has been learned on camera beyond what reporters have already uncovered.
Why it matters: The FTX collapse is the most interesting trainwreck story in business right now, but all the coverage of its instigator might be serving his purposes, as much as it is the public interest.
Details: In the last two days, after going through several key appearances in immediate succession, certain consistent messages emerged.
- Those reviewed were: his appearance at The New York Times' DealBook Summit, on Good Morning America, with crypto influencer Tiffany Fong, in New York Magazine, his interview on crypto podcast, The Scoop, and here on Axios.
- Any one of these basically gets you everything.
What they're saying: "I think I got a little cocky. I mean, more than a little bit," he said on Good Morning America.
In short: SBF has, to my ear, five key messages he's focused on.
One: He is talking.
There's a lot of discussion of how all advisors must be saying he shouldn't do this media circuit, but that may be exactly why he is — orchestrating the idea that he's not trying to cover anything up.
Two: The margin dodge.
He seems to be successfully redirecting attention from one of the worst allegations.
- On Nov. 12, the WSJ reported that FTX had turned customer funds over to Alameda Research, the hedge fund from which FTX was born, in order to meet lender obligations.
- Every reasonable person understands this would require an actual transfer of funds from FTX's control to Alameda.
Every interviewer asks SBF about this, and he always talks about a large, poorly collateralized margin position that Alameda supposedly had on FTX. A margin position is a loan, but it's a whole different kind. And it's all inside the house.
- The closest he seems to come to addressing this issue was when he said: "I did not know that there was any improper use of customer funds," on Good Morning America.
Three: "I was the CEO" but "I don't want to put words into other people's mouths."
He routinely makes a point of using language where he accepts responsibility, but also won't discuss anyone's work but his own, even though he owned the conglomerate.
- The phrase he keeps using is "I don't want to put words into other people's mouths." This has the effect of limiting the scope of what he actually discusses, yet as CEO it stands to assume that he gave them direction.
- Yes, but: "But I wasn’t running Alameda," as he told NY Mag, and everyone else too.
Four: FTX US is solvent and should be returning funds now.
"I'm confused why FTX US is not processing customer withdrawals right now," he said at DealBook.
- This is a message for American audiences. If FTX US was shielded from mistakes at the main company, he could get a huge win for customers here by making them whole now.
- He gets the most energetic in each interview when he gets a chance to make this point, and he usually makes it several times.
Five: My mistake was poor risk management.
"In my head I was looking at a 30% down move over a 3-day period as an extreme tail case event," he says, which he acknowledges as a mistake.
- In other words, negligence not fraud. The Scoop presses him on this point.
Yet, he and everyone else just watched a token not unlike FTX's FTT, luna (the stablecoin terra's backstop), lose 99% of its value in a week only in May.
- At the DealBook summit in particular he seemed to take a posture and vocal intonation meant to communicate that he was apologetic.
Our thought bubble: SBF has always played a larger game, so don't assume his messaging is simply about what everyone else is fixated on now: whether or not he gets prosecuted.
The bottom line: The fact that no one in his predicament does this could be precisely the point of doing this.
