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I. He was a crook
In May 2021, I interviewed Sam Bankman-Fried and Miami Mayor Francis Suarez together as part of a virtual crypto summit. Miami had gone all in becoming a crypto-friendly city, and the hallmark of that push was the Miami Heat making FTX its “official and exclusive cryptocurrency exchange partner,” a sponsorship that included stadium naming rights and was reportedly worth $135 million over 19 years.
This feature is part of CoinDesk’s “Future of Bitcoin” package published to coincide with the fourth Bitcoin “halving” in April 2024. Daniel Roberts is the former editor in chief of Decrypt, and before that spent more than five years at Yahoo Finance and more than five years at Fortune.
It was the length of the deal that befuddled me: How could a company that had only existed for two years (FTX launched in May 2019) sign a 19-year basketball stadium naming rights commitment? How could the National Basketball Association, famously cautious about its corporate partners, feel confident this crypto exchange that appeared out of nowhere would still be around in 2040?
I asked SBF. He grinned and said, “It's a good question. Without going into the details, it's been a pretty good year for us. To the point where, frankly, we don't need to rely on the other 18 years to have the funds for this.” They could pay the full contract upfront, was his point. I couldn’t argue with that, and didn’t. I smiled like an idiot and moved on; what else was there to say? As we all know, FTX filed for bankruptcy just 18 months later.
The company’s rise always felt unsettling; its ascendancy caused some unspoken vertigo. For those of us who had been covering the industry for years, we had long known the major companies extremely well: Coinbase, DCG, Grayscale, Gemini, Circle, to name a few. FTX appeared out of thin air, founded by a supposed whiz kid trader from Jane Street.
Even saying that it launched in 2019 doesn’t adequately convey how sudden its arrival was: no one was talking about FTX until 2021, when, at peak crypto market mania, it raised $1.8 billion from venture capitalists, rabid with FOMO, at outlandish pace: $1 billion in July 2021 (Series B), then $420.69 million in October 2021 (we should have known from that choice of number it was not a real company), then $400 million in January 2022; not to mention another $400 million for the “separate” FTX.US business the same month. That’s $2.2 billion raised in six months.
I would interview SBF twice more, in January and August 2022. I was in the Bahamas in April 2022 at the circus-like FTX confab in partnership with Anthony Scaramucci’s SALT conference. It’s difficult to convey how surreal that event was. Andrew Yang and Katy Perry showed up to party and meet Sam. Bill Clinton, Tony Blair, Tom Brady and Gisele Bundchen were all speakers, but their onstage panels were strictly “off the record,” a ridiculous condition (at an otherwise fully on-the-record conference) that no journalists present should have respected — and yet we all did.
Through it all, I and many others in crypto media had the sense that something here was very wrong. That’s not to say we called it or caught it. I’m not in the camp that blames the media for SBF’s celebrity (mostly he bought his stardom with marketing). But I do think we all shared the same vague feeling of dread when legacy magazine covers crowned him “the next Warren Buffett.”
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Even after the collapse of the exchange, when SBF was first arrested and charged, my opinion was that he was not a conscious criminal, but that he got in way over his head and didn’t have the wherewithal to manage the situation. That was not to excuse him or the unconscionably bad management of a company that held billions in customer funds, but my presumption was incompetence more than Madoff-level malicious intent.
The document that prosecutors appended last week to back up their demand for a 40-50 year sentence puts an end to any remaining delusions. It is a document so transparently venal that it reveals SBF to be a person with no beliefs, no convictions, nothing but vacuous greed.
His list of “ideas” to save his image included: go on Tucker Carlson to “come out as a Republican” (after donating millions to Democrats in 2022) and “come out against the woke agenda”; blame FTX’s lawyers and/or lawyers in general for “throwing entrepreneurs under the bus”; blame the people handling the Chapter 11 process and say they’re standing in the way of customers getting their money back; praising the people handling the Chapter 11 process and say that thanks to them, customers will get their money back; blame Alameda (his hedge fund that was using FTX as its piggy bank); do an interview on ABC with his biographer Michael Lewis; or “send out a Twitter poll asking people what to do.”
I’m almost surprised not to see “blame my parents” on the list. The environmentalism was a front. The effective altruism was a front. Advocating for crypto in Washington was a front. He believes in nothing. To quote Hunter S. Thompson’s immortal obituary of Dick Nixon, "he was a crook." He was the most insidious crook the cryptocurrency industry has ever had, which is saying a lot, and he did more damage to the public perception of crypto than any other individual, and it isn’t close.
And yet. Bitcoin (BTC) soared to new all-time-highs just 15 months after the highest-profile black eye the crypto industry has ever seen. That is remarkable, and it’s something that, it seems to me, the broader mainstream media has been mostly uninterested in covering.
II. Narrative gazing
I first wrote about Bitcoin in 2011 for Fortune.com, and ever since have been most fascinated by the reputation and public perception of Bitcoin and crypto culture.
The news peg for my story was that Gawker (R.I.P.) had just run a great exposé about Silk Road (quite a headline: "The Underground Website Where You Can Buy Any Drug Imaginable") and as part of it, explained that the currency of Silk Road was bitcoin, which was “purportedly untraceable.” (Not quite right, but describing the tech precisely right was not always easy at the time.) The Gawker story prompted Democratic Senators Chuck Schumer (NY) and Joe Manchin (WV) to write Attorney General Eric Holder a letter demanding a crackdown on Silk Road and bitcoin, which they called “a form of money laundering.”
There weren’t many journalists covering cryptocurrency at that time. All of us in this small, weird pond have seen many market cycles and accompanying narratives, and it seems to me that, after 15 years, not much has changed.
The first big bitcoin bull run was in 2013, when it first topped $1,000, then tanked after the collapse of early exchange Mt Gox. But it was still relatively obscure until the 2017 rally that made it a topic of conversation at the Thanksgiving dinner table that year, when crypto truly broke into the mainstream consciousness. Legacy media orgs assigned full-time beat reporters to cover the topic that was gain interest from normies, fueled by the initial coin offering (ICO) boom (paging Floyd Mayweather, DJ Khaled, Kim Kardashian and the many other celebs that hawked token sales). Then another crash.
The pandemic rally, in 2021, when crypto mania truly set in, inextricably tied up with the retail investor revolution, WallStreetBets and GameStop, stonks, non-fungible tokens (NFTs) and memes. Investing became a public social activity for the very-online. Then another crash. And now the current rally, in which bitcoin has soared above $72,000, driven by the approval of spot bitcoin exchange-traded funds (ETF) and institutional adoption from big suits like BlackRock and Fidelity. Of course, with crypto it’s never just one thing driving it, and the current rally is not just about the ETF, but I suspect it will be most easily remembered and characterized that way.
Through it all, entrepreneurs have built legitimate companies, and picks-and-shovels tools and services, that form the backbone of a bustling tech category. But among the general public, the narratives have gone something like this, with little change over 15 years: bitcoin is a Ponzi scheme or vaguely scammy, a tool mostly used by hackers and fraudsters. Or it’s killing the environment by gobbling up electricity. Or at best, it is unserious. It annoys people. It annoyed them well before FTX rose and fell. Remember all the Super Bowl ads? Matt Damon saying “fortune favors the brave”? Bros with their “HODL” shirts and Lambos? Jimmy Fallon and Paris Hilton holding up cutouts of their Bored Apes on primetime television?
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But FTX took things to a new level with massive billboards of Bankman-Fried and Bundchen, an FTX patch on every baseball umpire’s shirt, an FTX logo on race cars and NBA arenas. It marketed so aggressively that it wormed its way into the public’s consciousness — and then it went under. It’s the biggest news event to ever happen in the crypto industry, and it was extremely deleterious to the image of what was supposed to be a revolutionary technology, a new payment rails, not a cultural lightning rod.
And it took just 15 months to return to all-time-highs.
As for mainstream media, and broadcast news in particular, they mostly only cover it when the price is surging or tanking. That has been true since the 2017 run, and with some exceptions here and there, it’s still true today. And now, in the midst of a new bull run, they seem less interested than ever. The defining forces are major financial institutions rather than Elon Musk pumping dogecoin (DOGE) on SNL. Sure, memecoins with names like BONK and dogwifhat (WIF) and Jeo Boden have pumped too, but for the most part, the 2024 bull run lacks the carnival barkers.
Perhaps this is a positive indicator. Perhaps — call this spin if you must — crypto is less of an oddity than ever before. Perhaps crypto is finally growing up.