> My guess is they made money of this clown

I've always felt this was probably the case. Take an idiot that needs to feel important, tell him he's a "boy genius" who can do no wrong and is always going to be misunderstood, and you basically have the perfect patsy. Till the end SBF just could not let go of that idea that he was smarter than everyone else, never realizing that this was always just a marketing gimmick.

At least Caroline Ellison had the sense to realize that she was living a delusion and quickly did what she could to walk away with minimal harm done to herself. In a few years she'll probably find herself making book deals and getting paid outrageous consulting fees once memory fades enough.

> In a few years she'll probably find herself making book deals and getting paid outrageous consulting fees

Like Jordan Belfort of Wolf of Wall Street infamy, or Andy Fastow of Enron. Why shouldn't she get in on the action? American publishers love a comeback story.

    Take an idiot that needs to feel important, tell him he's a "boy genius"

This points to something I've always wondered about SBF: why did anybody think he was a genius?

I know very specific reasons people think Musk, Jobs, Gates, Zuck, and others are geniuses even if I don't agree in every case.

But... SBF? What did he even allegedly do (or preside over) that seemed smart or unique? It was... a crypto exchange. They had their own coin. Uh. Those are not unique things. I don't get it.

But your comment made me think. Maybe it was just an empty bubble of perception. VCs pretended he was a genius so they could use him, and told everybody he was a genius, so everybody thought he was a genius even though nobody could point to why they thought that way.

There was a puff piece from Sequoia[0] that tries to make the case that he is an altruistic genius and it hasn’t really aged well.

[0]: https://web.archive.org/web/20221027181005/https://www.sequo... (wayback machine is needed because sequoia has taken it down)

He went to MIT and was employed at Jane Street, this doesn’t mean he was a Steve Jobs talent but he is certainly high IQ.

I know a few MIT grads and they're plenty smart but nobody is calling them geniuses and throwing billions of VC at them, so I'm wondering what was different about SBF.

He had a pedigree, I guess, and made some... money doing the arbitage thing. But also a lot of people do that? There seems to be no real intrinsic reason why this guy would be seen as a star.

I guess it was just kind of a "right guy right place right time thing" thing.

Totally agree. The ferocity of hustling and always be selling on the one hand and dually the reflexive need to hyperbolically market or brand someone as exceptional category X with the implication the bestower also has brilliant insight is gotten stupid. When the currency becomes BS you can bet tomorrow can only bring hyper BS.

I'm reminded of the Johnny Carson line after dealing with crazy entertainment types: I'd give my bottom dollar for a regular person right now.

I'm still reading the fawning biography Going Infinite, and even Michael Lewis thinks there was a lot of "right guy right place right time" involved. Heck, even SBF thought so. Lewis' origin story is that SBF noticed how efficient Jane Street was and how inefficient crypto markets were and assumed that somebody would inevitably bring greater efficiency to crypto, so he thought, "Hey, why can't that somebody be me!?"

I'd use Steve Wozniak over Steve Jobs when describing talent.

Steve Jobs had a talent for telling stories and getting people to believe them.

Yeah even if one thinks negatively of Jobs, comparing SBF to young Jobs is a joke.

SBF founded FTX in 2019 when he was ~27 years old. At that point he had gone to MIT and done some arbitage stuff. More than I've accomplished but I mean, I'm not really seeing anything that ticketed this guy for stardom.

By age 27, Jobs had founded Apple Computer and was one of the major players in launching the whole personal computing industry.

I mean, even if we feel negatively about Jobs, we can also point to a pretty wide range of accomplishments he helmed. Even outside of Apple. He was one of the founders of Pixar, purchasing it from Lucasfilm. Also famous for a certain brand of charisma or at least persausiveness. One can not think very highly of him, but also see why investors would be like let's give this guy some money, perhaps lots of money.

I don't think highly of Elon Musk but I have zero difficulty understanding why people would think he's a genius sort of guy and give him money. Even I have to admit he's been at the helm for some wild achievements. Also certainly a charismatic guy in some ways. Not going to have a shortage of money thrown at his next venture.

But SBF?

Again... what was anybody seeing in this guy? Must have just been "right place right time" when the crypto hype wave was cresting.

It’s also that he was naive enough to put himself out there as a kind of figurehead of sorts of the crypto movement. So the others were probably like “ok if you insist…”

He was also surfing high on his messiah complex with a kind of 2020’s version of white man burden which the public was enamoured with.

Can u comment more on this "white man's burden" that was prevalent in 2020 as you describe it?

I meant 2020’s as a decade, and the concept is Effective Altruism, the idea that a bunch of geeks sitting in a gaming chair behind a computer screen know better what to do with charity money than the people actually doing it on the real world.

The crypto crowd needed a genius, and he kinda fit the image, so they went with it. It’s not that different to any other political movement; leaders are made by others, not themselves. It’s natural for us to focus on the person itself as if they are the ones getting all the benefits but all the crypto scammers benefitted from having an “altruistic crypto king” as a media figure.

> in America's tech culture

To what extent were SBF and Ellison tech though? This trend of labelling more or less any new company that attracts VC funding as tech is bothersome. It's the mental loophole that allowed Adam Neumann to embezzle huge amounts of investor money too (but he did it "right" so gets away with it), by claiming that WeWork wasn't just an office leasing company but a tech platform. None of these people are engineers of any kind, none of them have developed any kind of new tech. They are just ordinary business types who run a business that happens to employ a few coders.

Crypto is explicitly tech, and a crypto exchange lies at the intersection of finance and tech. It has never been a requirement that leadership of these companies be engineers (much to the dismay of any engineer hired at some of these companies).

It is fair to call FTX and WeWork tech companies because they built platforms, powered by the internet and apps to modernize legacy offline industries. That's been the definition of a tech company since the 90's dotcom boom.

What exactly was the tech platform that WeWork built?

I’d argue crypto is a commodity and that the underlying blockchain is the tech.

You can make a cryptocurrency without creating any new tech whatsoever. And you can create a blockchain without creating crypto.

This is why I think it's strange that Coinbase is considered a crypto company. It is/was a Ruby on Rails web app. Almost like calling the CME Group an agriculture company.

What platform did FTX create? Were there apps you could install into FTX?

FTX was just an ordinary financial company, AFAICT. It had a bit of software to run the order book, but wasn't run by technical people, had no R&D effort and no obvious reason to develop one, and so on.

WeWork was just a company like any other, I can't see a single factor that could make this be a tech company.

To me, at heart, a tech company must develop some new kind of tech and do so in-house.

Tesla is a tech company, not a car manufacturer -> common reasoning for Tesla market cap

You already mentioned WeWork. FTX is another example. Given how few "tech" start-ups and big tech companies actually produce technology as their core product, I guess the sentiment of SBF and FTX being somewhat symptomatic is fair.

It wasn't really a ponzi. It was a legit crypto exchange apart from stealing customer funds. Here's a positive CNBC article before it went wrong https://www.cnbc.com/2022/01/31/crypto-exchange-ftx-valued-a...

But yeah if he hadn't been caught, he'd be doing well now.

Even without touching customer funds the FTT token thing seems quite wrong to me.

And based the infamous Matt Levine interview, it was at best a legit ponzi exchange, according to what Sam himself says about the thigns being traded there.

Well yeah the FTT token thing was a bit iffy if not really a ponzi scheme. Exchange tokens go on - you can still get Binance token or Kucoin token if you like and they tend to work as a sort of equity benefiting from income from the exchange. But not exactly equity and kind of subject to manipulation and the like. Where FTX sinned was treating its FTT tokens as an asset on the balance sheet worth billions when they were not worth that.

The famous Matt Levine interview was about yield farming which as far as I know SBF didn't actually do but which he provided a striking explanation of. While that is Ponzi like it's a bit of a disservice to call it a Ponzi as it's actually rather more cunning and was the basis of most of the 'distributed finance' boom and bust.

FTX wasn't a ponzi, the FTT token they issued was.

NFTs are always a ponzi

FTT isn’t an NFT so I’m curious how this is relevant?

I'm somewhat out of the loop on this whole story -- can you explain how the IPO would have helped? What was his exit plan? My understanding of Ponzi schemes is that they always collapse eventually because everyone will want their money back sooner or later.

big infusion of cash from the IPO might have been able to cover up the deficits, and the inevitable "cleaning things up to do the IPO" work could have bought them time to un-fuck a lot of the riskiest accounts.

then the IPO hits, you cash out, take your exit, and drink your mint julip or mojoto in Bermuda while the whole thing burns down 2 years later. whole lotta "not my problem" at that point, and every one would think you're a genius.

See Adam Neumann (WeWork) as an example of how to pull this off.

Or Zymergen: https://en.wikipedia.org/wiki/Zymergen

You need Saudi cash of last instance for this though.

IPO and restating earnings might have covered the tracks.

It's wild to think of what would have happened if Alameda had gotten out of crypto and instead put all the stolen customer money in an index fund. The CFTC complaint says they started misusing customer funds in 2019. Stocks have increased a lot since then. FTX would have been able to meet any customer request for withdrawal, Alameda would have presented staggeringly large returns (trading profit / legally invested money), and SBF would still live like a king.