Sam Bankman Fraud: Inside the Collapse of FTX’s Hollow Empire

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 15 November 2022

⏱️ 58 minutes

🔗️ Recording | iTunes | RSS

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Summary

As NLW said on each day’s show, “in addition to them being a sponsor of the show, I also work with FTX.” On today’s show, NLW gives an insider’s view of the timeline, from the beginnings of trouble as the crypto community turned on Sam Bankman-Fried for his role in shaping industry regulations to the chaotic week that saw FTX go from high flyer to bankrupt. Along the way, [NLW] shares how he and other FTX employees felt as they realized that they, along with the rest of the crypto industry, had been duped, lied to and defrauded. “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “War” by Enoch Yang. Image credit: Danny Nelson/CoinDesk, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	What's going on, friends? It is Monday, November 14th, and today I am talking about the end of FTX.
0:06.6	On Tuesday, November 1st, FTCS was worth $40 billion, and its CEO, Sam Bankman-Fried, was worth
0:12.3	about $16 billion. By Friday, November 11th, FTCS had declared bankruptcy, and the Bloomberg
0:18.3	Billionaires Index was estimating SPF's net worth around a
0:21.4	single dollar. As for me, I was town one job, and the breakdown was down one sponsor.
0:27.3	Today's show is about the most head-spinning, mind-numbing, heart-hollowing week in crypto history.
0:33.3	So what are the goals of today's show? Well, for me, I think it's two parts. First is, I want to give
0:37.7	you a play-by-play of what happens, specifically from the lens of an average FTX employee's
0:43.2	perspective. I haven't seen everything that happened last week put together in one place with that
0:48.5	context, so this is an attempt to do that. The second thing I'm trying to do today is to start to lay out the questions that I think we'll all be discussing and debating in the weeks and months to come. I can't promise yet that I'll
0:58.7	have any particular insights or answers. I'm still very much in the middle of processing all of this,
1:03.1	so it's fairly raw. I intersected with FTX in two ways. As I said at the beginning of every edition
1:08.9	of the breakdown, FTX is a sponsor, but I also work with them.
1:12.5	Specifically, I've done brand marketing with FTCS for a couple of years, with the most notable
1:16.2	things being the TV ads.
1:18.2	Larry David's Super Bowl commercial, that was me.
1:20.9	Importantly, here are the things that I have never done with FTCS.
1:24.3	Anything involving product, anything involving their investing, anything involving customer
1:28.0	service, anything involving customer funds, anything involving their politics, anything
1:32.2	involving anything other than helping tell our story to the public. I've always been remote,
1:36.3	and in the two years I worked with FTX, I spent one day in any office, which was the Chicago office,
1:41.0	which is also the only time I met Sam. It was a working session on our main
	...

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