SBF had really good risk management, actually

You just have to zoom out a little to see it

I mentioned on our podcast that I’d bet on Sam early by investing in Solana. I thought he was a extremely competent snake. Lots of people took issue with things he did - DNC donations, veganism, attempts to court regulators, etc. I liked the grotesque nature of it, though. It indicated he knew how to play the game.

His team spent a lot of time crafting his image. They passed him off as this eccentric vegan autist guy sitting in front of 14 monitors for days straight, using his prehensile toes to eat a supply of raw vegetables. “I didn’t even go to the store for these carrots I’m eating with my feet. I doordashed ‘em. I never leave my room because I’m just too immersed in the code, man”

It was obviously a targeted marketing play. Nobody does this “Billionaire Philanthropist” thing for reasons other than branding. When the Vox screenshot leaks came out I was glad to see my assumptions about his motivations were completely correct.

Now that he’s fallen from grace through the minor whoopsie-daisies of committing the largest financial fraud in the history of humanity, everyone’s courageously coming out of the woodwork to call him an idiot.

Young genius billionaire to disgraced retard in just a few short days.

The marketplace of ideas is a fickle mistress. His money left him and with it went all his popular support. It now seems I’m the last man willing to defend the intelligence of SBF (with the possible exceptions of the entire MSM and all US Senators). Not the side I usually like to be on, but I don’t think there’s any other accurate read of the situation.

When the FTX blowup first happened, I assumed it was totally over for Sam. I thought he’d be in jail or dead within the week, and I should just mentally divest from SBF as a concept. Time went on though, and just… nothing happened. Week after week of him not getting arrested or even being covered. Then, when articles finally did come out, they were all puffballs - they actually painted him as a sympathetic figure.

The government started investigating him and I thought “A-ha, here it is! Now’s when they’re gonna fuck him. They already hate crypto and the fact he’s so widely disliked gives them an easy excuse to just dunk on him for free anti-billionaire, anti-crypto publicity and soundbites.”

Wrong again! This is what actually happened.

I had a hard time understanding what was going on until I realized - he’s paid all these people off.

A funny Catch 22 in being a corrupt actor is that you have to carry through on the bribe even when the guy who paid you loses all his clout. If you turn around and stab him in the back, everyone sees you betraying a guy who paid you off and it makes them doubt your trustworthiness for future bribes. There’s an ethical framework to the corruption. The media’s tireless defense of Sam can be seen as an advertising campaign in which they broadcast their willingness to shill for anyone who pays them.

We all dogged FTX and Alameda for tweeting so much about the importance of “risk management” while they were underwater themselves, but we fundamentally misunderstood the scope they were operating on. We assumed they were talking about managing risk within a given crypto trade, but they were managing risk within the global criminal justice system.

Sam was caught red-handed in the largest act of fraud in the history of humanity and nothing happened to him because he used half his stolen money to buy off everyone in the world with the power to prosecute him. His ethics are certainly questionable, but the risk management was on point.¹

1. If this changes in another month and he starts experiencing consequences for the fraud then this was all satire and I’m still right somehow.