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Yes, you’re tired of Sam Bankman-Fried. You’ve heard his name so much that it’s become meaningless.
The initials start to blend into each other — SBF, FTX, STX, FBF.
You may think that to truly understand what went wrong with FTX, you need to go back to when Sam Bankman-Fried started FTX.
Or if you know a little bit more about crypto, you may think that the real story actually begins with Sam Bankman-Fried starting Alameda Research, the trading company that came before FTX.
You’d be wrong.
To fully understand FTX’s spectacular rise and disastrous fall, you need to actually go back to the true beginning, to the invention of cryptocurrency itself.
At least, that’s what Brady Dale thinks.
In his book, “How the FTX Bankruptcy Unwound Crypto’s Very Bad Good Guy,” Dale tells the story of FTX starting at the very, very, very beginning of the entire cryptocurrency movement. It’s the equivalent of someone asking you where you’re from, and your reply being “Oh, well my great-great-great-grandparents were reptiles living in what was then called Mesopotamia […] and now I live in Brooklyn.”
This joke will be much funnier once you actually read Dale’s book, because he has a clear fondness for increasingly insane similes like…
The cryptocurrency market in 2018 froze up like a Hell’s Angel wandering into a tea party for 7th-grade-suburban girls.
Governance tokens were like acne in 2020, and DeFi was like a teenage boy who would only drink Dr. Pepper.
Or my personal favorite.
SBF was fond of repeating the phrase “I fucked up,” which would be tantamount to Grigori Rasputin going on TikTok to admit he could have done a better job of considering the best interests of the people around him.
The book chronicles the history of cryptocurrency, beginning with the invention of Bitcoin in 2009. Throughout the text, Dale directly addresses the reader (in a manner best left to Jane Eyre), as he recounts SBF’s history in the crypto markets. We are taken on a journey from his risky Asian arbitrage trades in 2017 to his emergence into the spotlight during the DeFi summer of 2020 and his eventual confirmation as crypto’s golden boy at FTX.
I will say that while the book does technically begin with the advent of Bitcoin, it does not try to explain blockchain technology to you. In fact, a section entitled “How Bitcoin Works” has one of my very favorite explanations to date; one that I will use whenever anyone ever asks me again.
Honestly, it doesn’t matter. Not for you. Not for me, either. You know how sometimes when you make a phone call the sound is terrible, but then if you hang up and try again, it’s fine. Why does it do that? Do you know? Someone does. I don’t. I bet you don’t, either. And neither of us care.
However, don’t let this fool you into thinking that this book is not crypto technical. Dale actually goes into exhaustive detail about DeFi systems and how they work (using his many similes). In fact, he takes it to the point where I feel confident that any grandmother could successfully rug an automated market maker after reading.
‘Drowning in Sam’
With Sam himself playing an outsized role in the narrative after FTX’s collapse — I can’t even count how many media appearances/Twitter Spaces SBF had from November up until his December arrest, and Dale doesn’t even try to — Dale’s introduction notes that he is quite literally “drowning in Sam.” A sentiment that likely rings true for anyone who followed the FTX story closely.
One facet of Sam’s legacy is that he shared more online than any other executive in the history of public company meltdowns. Even so, Dale’s book is still able to confirm a few morsels of information that had only been hinted at back in SBF’s November chaos.
Lingering questions such as, who were those unnamed mythical investors that SBF often cited as being ready to lend enough money to make FTX whole if only he hadn’t, “stupidly,” signed away the company by filing for bankruptcy? Tron’s Justin Sun had been one of the rumored investors — and Dale confirms this through Sam in his book.
Some of Dale’s major points — when he isn’t explaining how DeFi works with his droll similes — also cause you to stop and reexamine what SBF actually did, as opposed to what people thought that he did.
Take the famous Matt Levine interview where Sam waxed poetic about the “black box” of DeFi. Dale makes me think that we maybe really did interpret Sam’s point totally, utterly incorrectly: that his black box was meant to be purely rhetorical, and a poorly timed interruption by Levine may have derailed Sams’ explanation into a literal hyperbole he didn’t really mean to say.
I also now (kind of) know what effective altruism (EA) really is. Before this book (and to some extent, even after this book), it seemed like EA was just a fancy way of explaining why a person might donate to charity. But Dale — perhaps because he dabbled in the EA movement himself — really underlines exactly how EA advocates try to reframe questions about the world differently. A true EA believer, as Dale writes, tries to answer every question by being “less wrong” after gathering as much evidence as possible, but also knows that it’s impossible to ever be fully “right.”
Although understanding effective altruism does not provide an explanation for SBF’s many stupid decisions, it does give the impression that his actions were initially driven by a method to his madness.
Even in a world that makes you literally “drown in Sam,” what you won’t find is this book paying lip service to any of the salacious rumors that swirled during last winter’s SBF media coverage. This book is certainly not a tabloid. Don’t expect to find any mention, not even a hint, that SBF and Alameda ex-CEO Caroline Ellison engaged in an alleged on-again, off-again relationship. Nor of the duo’s rumored participation in the FTX penthouse’s “polycule” dating circle.
You also won’t finish this book knowing much more about Sam’s upbringing; there are no touching childhood memories tinged with 20-20 hindsight that fully explain why SBF became so risk-happy in his adult years. Besides Dale’s chapter defining SBF as a “geek with a swagger,” Sam simply appears fully-formed one day, working at Jane Street trading.
While I understand why Dale chooses not to dwell on the involvement of other top execs like Caroline Ellison, Gary Wang, Nishad Singh or Sam Trabucco in FTX’s demise — he thinks that the responsibility for the whole mess comes down to Sam alone — I believe that there are still some untold stories out there for the next SBF book. One about the group of “kids” who ran the Hong Kong (and later Bahamian) FTX offices alongside these incompetent C-suite execs.
But let’s go back to the promise of Dale’s book, dear reader, which was to explain exactly how FTX’s collapse unraveled the cult of Sam Bankman-Fried. There is no doubt that this has most definitely been explained. If you want to truly understand how the cryptocurrency industry allowed an enterprise like FTX to thrive, and a “hero” like Sam Bankman-Fried to rise, then this is the book for you.