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On the finish of a 15,000-word Twitter thread he by no means posted, Sam Bankman-Fried, the founding father of the failed cryptocurrency alternate FTX, supplied a blunt evaluation of his predicament.
“I’m broke and sporting an ankle monitor and probably the most hated individuals on the earth,” he wrote. “There’ll in all probability by no means be something I can do to make my lifetime influence web constructive.”
He added: “And the reality is that I did what I assumed was proper.”
After Mr. Bankman-Fried was arrested, charged with fraud over FTX’s collapse and positioned in residence detention in December, he wrote a whole bunch of pages of generally rambling self-justifications, starting from childhood reminiscences to mathematical calculations.
In a draft of his unsent posts, which he formatted as a collection of tweets spanning roughly 70 typed pages, he criticized a few of his closest colleagues, interspersing his arguments with pictures from his highschool years and inventory pictures of popcorn and a backyard maze. Each few pages, a key second within the narrative is accompanied with a hyperlink to a music video by Alicia Keys, Katy Perry or Rihanna.
As soon as a prolific poster on Twitter, now often known as X, Mr. Bankman-Fried, 31, labeled the thread “a draft of a draft of a draft of an concept” and included hyperlinks to 29 different information about FTX. One doc, titled “Inception V2,” is a prolonged assault on the corporate’s chapter legal professionals, that includes a screenshot from the 2010 Christopher Nolan film. A separate hyperlink pulls up a spreadsheet itemizing Mr. Bankman-Fried’s Amazon orders from 2021.
The roughly 250 pages of paperwork, which haven’t been beforehand reported, present a window into Mr. Bankman-Fried’s mind-set throughout the eight months he spent in residence detention earlier than a decide revoked his bail in August. The writings additionally provide new particulars about his attainable authorized protection past what his legal professionals have revealed in courtroom, shedding gentle on how he might justify his actions when his trial begins on Oct. 3.
Prosecutors have charged Mr. Bankman-Fried with orchestrating a scheme to funnel FTX buyer funds to a hedge fund he based, Alameda Analysis, in order that his firms may make enterprise capital investments, purchase actual property and donate to politicians. He has pleaded not responsible and faces a long time in jail if convicted.
Throughout his home arrest, Mr. Bankman-Fried despatched the paperwork to Tiffany Fong, a social media influencer who has a YouTube channel in regards to the crypto business. Ms. Fong shared them with The New York Occasions.
“He preferred that I don’t work for anyone,” she mentioned. “He thinks I can simply type of come to my very own conclusions.”
A consultant for Mr. Bankman-Fried declined to remark.
In a number of paperwork, Mr. Bankman-Fried blamed Caroline Ellison, his former girlfriend and onetime lieutenant, for serving to to trigger FTX’s implosion. He described her as ailing outfitted for the job he gave her as head of Alameda, claiming she had cried throughout a gathering with him and refused to institute buying and selling methods that will have protected his companies from a market crash.
“She frequently prevented speaking about threat administration — dodging my recommendations — till it was too late,” he wrote in a doc titled “Alameda’s Failure to Hedge.” “Each time that I reached out with recommendations, it simply made her really feel worse. I’m certain that being exes didn’t assist.”
Within the Twitter draft, Mr. Bankman-Fried additionally criticized Sam Trabucco, who was co-chief government of Alameda. Mr. Trabucco and Ms. Ellison didn’t get alongside, the doc mentioned. And whereas Mr. Trabucco had good instincts for threat administration, Mr. Bankman-Fried wrote, he “was within the means of quiet quitting” by late 2021.
Mr. Trabucco most well-liked to spend his time “occurring dates with a ton of men whereas crusing world wide on a ship,” Mr. Bankman-Fried wrote. Then he linked to a music video, “Cheers (Drink to That)” by Rihanna.
Ms. Ellison and two of Mr. Bankman-Fried’s different high advisers have pleaded responsible to fraud expenses and agreed to testify towards him. A fourth pleaded responsible this month with out promising to cooperate. Mr. Trabucco has not been charged with any wrongdoing.
Attorneys for Mr. Trabucco and Ms. Ellison declined to remark.
As soon as hailed as a reliable drive within the loosely regulated world of crypto, FTX imploded in November, costing prospects billions of {dollars} and devastating the business. After his arrest, Mr. Bankman-Fried was granted bail and allowed to stay together with his dad and mom, who’re longtime regulation professors at Stanford, of their residence in Palo Alto, Calif. They received a German shepherd named Sandor to behave as his guard canine.
For months, Mr. Bankman-Fried entertained visitors just like the creator Michael Lewis, who’s ending a guide about him, in addition to a number of reporters.
Few individuals had as a lot entry as Ms. Fong, the influencer, who had struck up a web based rapport with Mr. Bankman-Fried earlier than FTX failed. Ms. Fong visited him at his dad and mom’ residence greater than 10 occasions, she mentioned, and recorded conversations with him that she might ultimately launch.
Throughout home arrest, Mr. Bankman-Fried spent a lot of his time within the research, Ms. Fong mentioned, the place he performed pc video games, arrange a chessboard and generally slept on the sofa. Most days, she mentioned, he labored on his authorized protection, recording ideas in regards to the case on a whole bunch of pages of Google paperwork. Mr. Bankman-Fried additionally informed her that his household was putting in a pickleball courtroom for him within the yard.
Mr. Bankman-Fried gave Ms. Fong the paperwork in late January. It was not clear what he anticipated her to do with them. Ms. Fong, who misplaced cash within the collapse of the crypto firm Celsius Community, mentioned she sympathized with FTX’s victims and was skeptical of lots of Mr. Bankman-Fried’s claims. She despatched one doc to a former Alameda engineer, Aditya Baradwaj, who responded to her with a point-by-point rebuttal to Mr. Bankman-Fried, noting that Alameda’s hedging would have been “irrelevant” if FTX hadn’t misused buyer cash.
Within the draft Twitter thread, Mr. Bankman-Fried traced the expansion of his companies from his childhood in Palo Alto to the penthouse he purchased within the Bahamas close to FTX’s headquarters. He recalled assembly Mr. Trabucco at a math camp, the place his future colleague sneaked out after curfew to bake cheesecake brownies, and he described his early admiration for Ms. Ellison, calling her “depraved good.” He additionally inserted some private pictures, together with one which reveals him holding a shirt that Mr. Trabucco had purchased him in highschool.
In one other part, Mr. Bankman-Fried posted a hyperlink to a doc he wrote in 2019, “Tonight We Are Younger,” an account of a convention in Taiwan the place he interacted with Changpeng Zhao, often known as CZ, the founding father of the Binance crypto alternate. (He additionally included a hyperlink to the “We Are Younger” music video by Enjoyable.)
“Tonight was an evening about booze and ladies and lasers and loud, booming music, however there was an odd microclimate that appeared to comply with me,” Mr. Bankman-Fried wrote. “I walked by CZ a couple of extra occasions, and every time he broke eye contact together with his eye sweet and embraced me: Folks had been fascinated by us, loads.”
In November, Mr. Zhao’s posts set off a run on deposits that helped immediate FTX’s implosion. A Binance consultant didn’t reply to a request for remark.
A few of Mr. Bankman-Fried’s paperwork elaborate on arguments that his legal professionals have made in courtroom. In information titled “Inception V2,” “Inception V3” and “Inception Proof,” Mr. Bankman-Fried claimed that Sullivan & Cromwell, the regulation agency overseeing FTX’s chapter, constructed the narrative that he misappropriated consumer funds.
“They’ve performed it extremely nicely,” he wrote. “Have been it not damaging to only about every part I care about in life, I’d tip my cap to them.”
A Sullivan & Cromwell spokesman declined to remark. Prosecutors have argued that Mr. Bankman-Fried’s claims in regards to the agency quantity to “innuendo.”
Throughout a number of paperwork, Mr. Bankman-Fried additionally dissected his historical past with Ms. Ellison, writing that their relationship ended “the identical method most of my relationships finish.”
“They need extra intimacy and dedication and public visibility than I do,” he wrote within the thread, “and I really feel claustrophobic.”
In one other doc, he mentioned Ms. Ellison had refused to hedge Alameda’s aggressive buying and selling technique, regardless of his urging. At one level, he recalled, he despatched her a message that amounted to “the meanest factor I’ve ever mentioned to her.” (He mentioned he now not had a document of the message.)
“If Alameda had hedged, it could have remained solvent and prevented the whole sad story,” he wrote.
His considerations about Alameda heightened in spring 2022 as he packed for a visit to Washington, Mr. Bankman-Fried wrote within the Twitter draft. A gaggle of staff together with Ms. Ellison was frantically discussing a attainable deficit within the agency’s accounts. Mr. Bankman-Fried was solely half-engaged, he wrote, however had heard sufficient to understand that the dialog centered on an account labeled fiat@ — the automobile that regulators have mentioned FTX executives used to redirect buyer funds into different tasks.
“I had heard that identify earlier than, however I’d by no means actually recognized precisely what it was,” he wrote.
When she pleaded responsible, Ms. Ellison mentioned she and Mr. Bankman-Fried had conspired to shore up Alameda’s funds with buyer cash. He has denied misusing the funds.
“As a normal matter, I don’t lie,” he wrote in a doc titled “Fact.” “It’s one thing that I consider pretty strongly in.”
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