Was Sam Bankman-Fried's appearance a performance?

FTX founder Sam Bankman-Fried spoke from an undisclosed location in the Bahamas today with reporter Andrew Ross Sorkin about a DealBook event, a discussion his legal team “very much” disapproves of, he told Sorkin with a boyish grin.

Billionaire hedge fund Bill Ackman tweeted afterward that he thought “SBF” was “telling the truth.” But we’re not so sure. In fact, after watching the live broadcast, we’re still struggling if he was credible.

Throughout the back and forth, Bankman-Fried sounded almost thoroughly amateurish, insisting that he did not knowingly commingle funds between FTX and the trading firm he controlled, Alameda Research, where it has since been discovered that the exchange was directed 10 billion dollars in Alameda’s client assets for use in trading, lending and investment activities.

Although between $1 billion and $2 billion appears to be missing, and although company executives reportedly created an accounting “backdoor” to bypass red flags, when Sorkin asked about the teams’ dependence on each other, Bankman-Fried said he is “frankly surprised at how large Alameda’s position was, which points to another failure of oversight on my part and failure to appoint someone primarily responsible for this.

It should be noted that Bankman-Fried ended up using “neglect” nine times, even when she appeared to blame others. Asked if he should have taken money from FTX users’ accounts at all, he pointed the finger at Alameda, saying, “I didn’t run [it], I didn’t know exactly what was going on. I didn’t know the size of their position. A lot of it is stuff that I’ve learned over the last month that I’ve learned while frantically digging into it.” Obviously, he added, “this is a pretty big mistake. I mark this as a rather large omission that I was not more aware of.”

At many points during his conversations with Sorkin, Bankman also seemed delusional. He said that before FTX filed for bankruptcy — a move he reluctantly cleared four days after its initial proposal — “There was a lot of interest in the financing [FTX]. A very, very strong interest, you know, worth many billions of dollars.

It really didn’t seem like it. There was no interest from Binance as it was well documented. There was no interest on his part burnt venture backers, which, by the way, Bankman-Fried saved today in the interview. (Asked by Sorkin if “Sequoia Capital, Paradigm and some very large venture capital firms” that financed FTX ever asked Bankman-Fried what risk he was taking and “whether they bear any responsibility,” he replied, “No, I don’t think that they were in charge of… most of what they were focused on was… what FTX could become…”)

Indeed, in many ways, Bankman-Fried acted today very much like someone who doesn’t understand that his life has just changed dramatically and who instead believes he can still direct the outcome of FTX despite the fact that he was forced to resign. (FTX’s new CEO, a corporate turnaround specialist, called Bankman-Fried’s leadership “a complete failure of corporate control.”)

He spoke of “a lot of assets that are available [still at FTX], although many of them are not liquid. They were worth a lot more than new liabilities a month ago, even many of them a year ago.” Bankman-Fried similarly suggested that he did not accept that his clients would lose everything.

He said toward the end of the interview, “I can’t promise you and I can’t promise anybody anything there, and it’s really out of my hands to a great extent. But I would think it would be worth investigating [a pathway forward] because I think there’s a chance that customers would be much more targeted—I don’t know, maybe even completely—if there was a really strong, concerted effort.”

It was such a strange display that we wondered why some of the world’s most sophisticated investors put it on a pedestal in the first place.

Of course, he’s “having a bad month,” as he told Sorkin, drawing laughter from the audience. Yet it’s just as likely that Bankman-Fried and his circle will insist on the argument that he was simply incompetent – in over his head – and never intentionally engaged in fabrications.

There is a big difference. US prosecutors can file a civil suit against someone accused of incompetence or negligence, and that person can suffer significant financial consequences. But if it is proven that a person planned to deceive others, then fraud is on the table, which also means prison is on the table. That could mean a much bleaker future for Bankman-Fried.

The U.S. Attorney’s Office in Manhattan has already reportedly opened an investigation into FTX; The SEC and DOJ also, of course, rummaging around and tries to determine whether Bankman-Fried’s maneuvers were intended to deceive or were instead an astonishing series of mistakes.

It is tempting to conclude that Bankmann-Freid made his decisions consciously. Given his status as a “crypto genius” until recently, it’s hard to imagine he was so ignorant. But it was a pretty good performance today, if that.

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