Sam Bankman-Fried’s farcical fundraising effort

Silhouette illustration of Sam Bankman-Fried crumbling and falling.

Illustration: Brendan Lynch/Axios

Sam Bankman-Fried created headlines and offended lawyers yesterday when she sparked a direct message interview with Vox reporter Kelsey Piper, in which she insulted regulators and her own accounting.

What to know: It’s impossible to take Bankman-Fried at his word now, because so much of it is nonsense. They read like the desperate plea of ​​a man trapped under his house of four concrete.

Case in point: Bankman-Fried told Piper that he is still looking to raise $8 billion from outside investors, in order to make the clients whole, adding that “a month ago I was one of the biggest fundraisers in the world the.”

  • This will not happen.
  • For starters, no one is sure how big the hole really is. Remember that when Bankman-Fried first contacted investors about a bailout, he first told them he needed $2 or $3 billion. That evening, it was $ 4 to $ 5 billion. It’s now $8 billion, and many suspect it’s even bigger because FTX’s illiquid tokens and other investments keep hemorrhaging value due to crypto contagion.
  • Additionally, FTX has zero brand equity remaining.
  • Ultimately, Bankman-Fried is no longer CEO or a company officer, having resigned in conjunction with the Chapter 11 filing. Maybe he hopes to be a white knight arriving in Nassau with bags of cash, but he’s delusional.
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Looking ahead: What comes next will play out both in Delaware bankruptcy court and on Capitol Hill.

  • Current FTX CEO and chief restructuring officer John Ray, who worked on the Enron case, was appalled at his predecessor. According to a new bankruptcy court filing:
  • “Never in my career have I seen a complete failure of corporate control and a complete absence of trusted financial information as was done here. From compromised system integrity and faulty regulatory oversight abroad, to the concentration of control in their hands in a pinch. inexperienced, unsophisticated and compromised group of people, this situation is unprecedented… Mr. Bankman-Fried is not employed by the Debtors and does not speak for them.”
  • Again, this is a company that has raised $2 billion from some of the world’s most sophisticated venture capital and private equity firms.
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Both House and Senate announced that they will hold hearings on the FTX case, basically in response to public outcry.

  • Expect both browbeating to happen next month, although no date has been set. The House Financial Services Committee says it plans to call Bankman-Fried, while the Senate Banking Committee has yet to develop a proposed witness list.
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The bottom line: I messaged an investor about Bankman-Fried’s fundraising comments, asking if there was something I missed. He responded with a video of his head exploding. Felt about right.


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