CZM Rewind: How Sam Bankman-Fried Conned the Crypto World & The Sam Bankman-Fried Update

Transcript

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Speaker 2 Ah, God is dead, and you, Jamie Loftus, have killed him. I did it.
You finally did it. You did it.
You did it. No, God was a hymn and Jamie killed him.
Hammered in the back of the head.

Speaker 2 And people are going to be critical of that, but you know,

Speaker 2 you don't know my story. And in my six-part miniseries, in which I'm played by Amanda Siefried, I think you're going to start to see my side of the story and

Speaker 2 I think I'm definitely not going to jail for what I did. That's good.
Unlike

Speaker 2 founder of Fair Enoughs, Elizabeth Holmes, who we just found out has been sentenced to 11.25 years in prison.

Speaker 2 I'm kind of, I like, yeah, I have mixed like, I have mixed feelings because it's like people don't go, first of all, the prison industrial complex in general. No,

Speaker 2 it doesn't doesn't make anyone better. To the extent that there's value in the present day and putting people in prison, it's people who are like a severe ongoing danger.

Speaker 2 And I don't see this making anything better. Like at the same time, I hate her.
So I don't, I'm not going to. She's

Speaker 2 a woman.

Speaker 2 It's not going to be the top injustice I

Speaker 2 rule today.

Speaker 2 I do kind of like that her.

Speaker 2 After being exposed as an unrepentant criminal, she's like, oh, I think I'm just going to kind of be like a normie girl for a while, and I'm going to be a controller with my name.

Speaker 2 And you're like, Liz, it's too late. It's too late for that, Liz.

Speaker 2 You defrauded people with a fake medical device that led folks to see to get treatment for things they didn't have and ignore illnesses they did, which is

Speaker 2 not before too many bodies hit the floor, but that would have stopped you. But you didn't really care.
You applied Steve Jobs' logic to something that was not just a silly box to keep in your pocket.

Speaker 2 Lizzie. Lizzie, Lizzie.

Speaker 2 Lizzie,

Speaker 2 Lizzie's hoped is what we learned. Also, putting her in prison for, you know, probably nine years when you consider all of the other things is like not going to help anything.

Speaker 2 It'll just mean that that kid she has grows up without a mom for nine years, and that's not going to make the world better.

Speaker 2 It's a huge moment for many things can be true at once. I lost having to hold all of those truths and still record an episode of Behind the Bastards.
Can I tell you about a legal case?

Speaker 2 This actually will be relevant to the episode, but yes, please. Wait, really? Yes.
Okay, this is definitely not going to be relevant. So let's

Speaker 2 give it.

Speaker 2 I was, a legal case I was thinking about today

Speaker 2 was the Beanie Babies billionaire.

Speaker 2 When he was taken to court in 2013 for holding money in a Swiss bank account,

Speaker 2 he, so it was like a taxation. It was an illegal.
Oh, a tax evasion charge. Tax evasion charge.

Speaker 2 So he was

Speaker 2 up for as many as five years in prison for tax evasion. And then he got off with,

Speaker 2 I mean, he's a billionaire. He's never going to suffer a consequence, right? But like he ended up getting a two years of probation on the ground that it had been too publicly humiliating.

Speaker 2 So he didn't have to get to go to jail because he was too embarrassed. It's embarrassed.
It was so embarrassing that he didn't have to go to jail. What?

Speaker 2 That's absolutely fucking weird. Anyways,

Speaker 2 I'm going to see how far this goes by committing murder and then having my pants fall down. And, like, well, Judge, look, yes, I did stab that man 47 times, but then everybody saw my underpants.
Yeah.

Speaker 2 I pee-peed myself so I feel like that's a square. Yeah.

Speaker 2 Can we just zero this one out?

Speaker 2 Man, I love the Beanie Babies story so much. I'm surrounded by my beans, feeling safe.
Wow, that's good. You do literally have one on your shoulder right now.
Yeah, Patty the Platypon.

Speaker 2 Just like I have this rifle next to me. I think that we both have our comfort objects at the ready.
That's right.

Speaker 2 So, Jamie,

Speaker 2 speaking of... Elizabeth Holmes, because the person we're talking about today is going to be the next story like that.

Speaker 2 By this time next year, there probably is going to be an HBO documentary about this guy. Oh, God.

Speaker 2 Maybe Taylor Kitch could probably play him,

Speaker 2 actually, if he wanted to really like Ralph.

Speaker 2 Taylor Kitch played hot David Koresh in the Waco show. Oh, Jesus.
I walked into that one day.

Speaker 2 Yeah, they'd have to give him like a belly suit or something. That's not anti-fat.
I'm just being accurate. But he could do it.

Speaker 2 Maybe that is. I don't want to see this man ever again.
No, I'm mad. Taylor Kitch? You don't want to see Taylor Kitch again? No.
You don't want to see those cum gutters again? Unbelievable.

Speaker 2 God damn it, Robert.

Speaker 2 There's plenty of. In this town, Robert, there's a million cum gutters.
I don't need those. I don't need those in my.

Speaker 2 Oh,

Speaker 2 that is true. But anyway.
He runs through the street.

Speaker 2 That is true of Los Angeles and no other city. Today we are talking about a guy who absolutely never comes.
Sam Bankman-Freed.

Speaker 2 Do you know this guy? Do you know this guy? I don't know this guy. You don't know this guy.
You don't know this guy.

Speaker 2 Have you caught any news in the last week about how a massive cryptocurrency exchange has collapsed, plummeting all the time? I did hear about that. This is that guy.
Oh, my God.

Speaker 2 This is the guy with his polyamorous sex ring that was running a big crypto bank in the Bahamas and it all fell apart and now billions of dollars are gone. You've lost me again.
Oh, great. Okay.

Speaker 2 Well, I'll try to. This is still breaking.

Speaker 2 We are, because this is a Thanksgiving week episode, we only do one episode on Thanksgivings. I needed a single one.
So I just want to give everyone background on this guy.

Speaker 2 We may come back to this story because there's a lot we don't fully understand about how he did what he did and the degree to which. But I hate that.
The gist of this is that

Speaker 2 this guy ran a trading service called Alameda Research and a crypto exchange. An exchange is basically like

Speaker 2 a bank, right?

Speaker 2 It's a cross between a bank and like a trading platform called FTX, which was one of the largest cryptocurrency exchanges in the world and was also considered by most people to be the most stable and like ethical and legitimate, right?

Speaker 2 People who are just kind of on the outside looking it. When everything collapsed earlier this year, right? You remember that? We had that.
I mean, no, I was engaged in that.

Speaker 2 It's just that I get a lot of my news from journalists on Twitter and they've been busy this week. Yes.
So

Speaker 2 when crypto like fell apart, when a lot of crypto fell apart earlier this year and like a bunch of places went under, FTX was one of the ones that stayed stable and actually were buying up a bunch of like failing crypto companies to try to like prop up the industry.

Speaker 2 They just collapsed and like the value of all everything has been plummeting for the last several days. It's a big disaster.
It is very like, yeah.

Speaker 2 In words that will annoy me as little as possible, can you explain why FTS remained solvent and other

Speaker 2 solvent. Oh, now

Speaker 2 why did it outlast?

Speaker 2 Because they lied.

Speaker 2 So they were operating. The short end of how to describe it, and we may, there will be more details to come.
But at present, it seems fair to say that it was a giant Ponzi scheme where

Speaker 2 they were taking in money, promising unreasonable returns, using other investor money to gamble on stuff to try to provide. Anyway, and it wasn't.
Unlike all the other crypto guys,

Speaker 2 they were dishonest. Yeah, it is very likely, what differentiates this is the scale, because this is very likely a financial crime on the level of what Bernie Madoff did.

Speaker 2 We are talking in the $10 to $20 billion stolen

Speaker 2 range.

Speaker 2 A lot of money. This is a serious financial crime.
I'm going in on this pretty cold. Yeah.
So I'm listening. And I'm listening.
So

Speaker 2 the other kind of mass

Speaker 2 touchstone of this is that it has led to a class action lawsuit against Larry Davids, Shaquille O'Neal, Tom Brady, and a number of celebrities who were all in a Super Bowl ad for FTX.

Speaker 2 I remember that ad. That was so embarrassing for my man, Larry.

Speaker 2 Yeah, so

Speaker 2 the lawsuit is basically

Speaker 2 this was a high-dollar Ponzi scheme, and you guys were using your name recognition to sell unregistered securities, which they were. Which they were.
Which they definitely were.

Speaker 2 Sorry, I just want to circle back to Shaquille.

Speaker 2 Shaquille O'Neal will put his name on anything to the point where, to the the point where very funny I worked at a haunted hayride this year which we don't talk about because it was a bad idea but the rival

Speaker 2 what you told us you told us bad idea

Speaker 2 guess what I'm alive

Speaker 2 I lived I support

Speaker 2 I lived to tell the tale it's very unclear who is right in the side of should I work at a haunted hayride or not I still haven't really landed on an answer point being our closest rival haunted Hayride-Wise, was Shacktoberfest.

Speaker 2 It was

Speaker 2 Shack-themed, haunted attraction in which the only Shaq-related thing was a gigantic inflatable Frankenstein that looked like Shaq, which did sound awesome.

Speaker 2 That sounds actually like the best time anyone's ever had. I love Frankenstein.
Shaq will put his name on anything, including crypto and Halloween. He should have been supportive of.

Speaker 2 What a king.

Speaker 2 Probably not. I'm sure there's horrible things about Shaq that have come out.
That seems almost unavoidable.

Speaker 2 Anyway, Sam Bankman Fried is the guy behind this gigantic financial crime that is still unraveling as we do this episode.

Speaker 2 And I want to talk about less about what happened on the exchange, because none of us want to talk about how somebody carries out the nuts and bolts of a cryptocurrency scam. But

Speaker 2 I want to talk about the social elements of this scam. I want to talk about how he conned the media, how he conned celebrities, and how he conned regulators.

Speaker 2 And I just want to talk about also the way some of these people talked and wrote about him, because there's a lot before about,

Speaker 2 I don't know, a week or so ago, we did an episode on the daily show we do what could happen here about ethical altruism, which is in brief, a theory that like the instead of trying to help people just because they need help, you should only help people after you consider the way to help people that is like the absolute most beneficial way for like the least amount of, you know, effort.

Speaker 2 It's utilitarianism, right?

Speaker 2 What can I, how can I do the greatest good with the the the the least resources and what the least amount of yeah and it's it's the way a lot of these like it and it's merged with this kind of thinking towards what billionaire types call long-termism and the gist of this is like

Speaker 2 It's not worthwhile for me to do stuff like pay taxes to have a society or guarantee like universal health care.

Speaker 2 Instead, the most ethical thing that I should do is make as much money as I personally can and then put that money into things that I believe will save the world, like research to stop AIs from from killing everyone and getting to Mars and shit.

Speaker 2 It's a way for billionaires.

Speaker 2 It's a way for billionaires and the other mega-rich to justify like continuing to do exactly what they want and feel like they're saving the world. Anyway, Sam Bankman Fried.

Speaker 2 You know what the Beanie Babies billionaire did to improve the world?

Speaker 2 He made a lot of beanie babies. And then he bought the Four Seasons Hotel and kept making Beanie Babies.
He didn't do shit. That's, well, you know, that's, I'm fine with that compared to these guys.

Speaker 2 Because they're all doing the Elon Musk thing where they're pretending. Anyway,

Speaker 2 Sam Bankman Fried is one of these guys. And we're going to get into that.

Speaker 2 But we did this episode on It Could Happen Here, where he was kind of a tangential character in this very unsettling and insidious movement that is behind guys like Elon Musk who are claiming to be saving the world while just fucking over people.

Speaker 2 And then like four days after it came out, his entire life unraveled and his fortune disappeared overnight because he was a giant con artist. What a treat.
It's very funny.

Speaker 2 So that's why we're talking about him right now. Yeah,

Speaker 2 he's like 30 years old and looks like Mark Zuckerberg and David Dobrik's love child. He's 30 years old.
That's so great about myself right now. He's a Mark Zuckerberg and David Dobrik's love child.

Speaker 2 Look, I shouldn't call anyone a schlub, but he looks like a schlub.

Speaker 2 I forget what David Dobrik looked like because my brain protects myself.

Speaker 2 Respectfully, I understand. Two villains.
Two villains, love child. Yeah.

Speaker 2 Anyway, so I uh, yeah, Sam Bankman-Fried was born in 1992 on the campus of Stanford University, uh, continuing a long and proud tradition of absolutely nothing good ever coming from that hellhole.

Speaker 2 His parents are both extremely prominent Stanford professors. His mother, Barbara, is a lawyer

Speaker 2 who clerked for the Second Circuit Court and graduated from Harvard. She founded Mind the Gap, a somewhat shady and mysterious democratic fundraising group.

Speaker 2 I think it's shady in that people don't exactly know where all the money comes from or like what their goals are. She also pinned shady.
Yeah, yeah.

Speaker 2 She also pinned an essay in 2013 that the right wing is going nuts about because she was basically arguing that like

Speaker 2 it good and evil are less a factor in what people do than environmental factors and all that stuff. Like when people do things that are bad, it's more often a product of their environment.

Speaker 2 It was kind of a

Speaker 2 oh God, what's that fucking psychologist? It was like a Skinner type argument where it's like, well, if people have bad inputs in their youth, then that's going to determine. Anyway,

Speaker 2 I think that's funny given what happens.

Speaker 2 I'm going to guess she sucks at what she's she she's she sucks uh and so does his dad Joseph Bankman okay Joseph is also a lawyer he is a graduate from Yale uh his big claim to fame was developing a proposal for an overhaul of the California tax return system that would have filled out citizens tax returns in advance and I know I just said he sucked but actually that sounds like a good thing

Speaker 2 I think that that's actually a cool thing to advocate for. The measure failed by one vote after heavy lobbying from Intuit, a tax prepped prep software company.

Speaker 2 Vote. No shit.

Speaker 2 Yeah, it kind of is. It's total bullshit because stuff, it's the thing everybody agrees with on paper, but nobody will actually fight the tax prep companies, which is like, hey, the IRS like knows.

Speaker 2 more or less what I make and like knows more or less what I owe. Why don't I just get a thing from them? Why do I have to go through this? Like, anyway.
There's no need.

Speaker 2 But it's like, that's the only other countries do it that way. We don't, though.

Speaker 2 Incredible, because there has to be a convoluted system that's expensive and where they can charge you if you make the tiniest mistake because you can't read size one font.

Speaker 2 Well, and more to the point, because I don't actually think the IRS is advocating to keep it a pain in the ass.

Speaker 2 I think it's these tax prep companies because they have an entire industry based on charging people to do the thing that they have to do to avoid going to fucking prison.

Speaker 2 Anyway,

Speaker 2 I said he's an asshole, and I'm sure he is, but he was right about this. and I don't know what to say about that.
Like all of us, Joseph is also a podcaster.

Speaker 2 He is the host, the co-host of the Stanford Legal podcast. Oh, and Sufferable Times, too.
And he's a nerd.

Speaker 2 If it wasn't the holiday season and I wasn't like getting ready for friends and family and all that good stuff, I would have listened to his podcast and we would probably be making fun of him.

Speaker 2 But you can do that on your own. Oh, my goodness.
I believe in it.

Speaker 2 Doesn't it feel so horrible when you think of how many people do what we do, but they're the worst person you've ever heard of? It's so sad. It's embarrassing.
Yeah, it's it's like, I don't know.

Speaker 2 I avoid self-identifying as a podcaster as it is. It's still not a system.

Speaker 2 But then on top of that, they're like, oh, like what, like, what?

Speaker 2 I mean, you know, the only, you know, the only thing that, that I can compare it to is like when I started making a living as a writer 15 years ago, and I would say that at like a, at like a, at a, a party or something, someone would ask, like, well, what do you do?

Speaker 2 And I'm like, well, I'm a writer. And like, four other people would say, yeah, me too.
Uh, and then you wind up listening to everybody's pitches for their novels that they're never going to finish.

Speaker 2 Um, oh, it's, I mean, this is. And so eventually I just started lying and saying that I still worked at special ed.

Speaker 2 Well, I like, I mean, it's the same thing with like, if you say you're a comedian in a party, you're going to be a fan of the public. Oh, God, no, never, never identify as a comedian in public.

Speaker 2 Oh, me too. And I've done one whole open mic, and my joke was very offensive.
And it's not a comedian's job to push boundaries.

Speaker 2 Oh, tell me your joke. You know how Lenny Bruce

Speaker 2 read that list of curse words? Well, I just do that with slurs. Here, let me show you.
Yeah, you're like, yeah, like,

Speaker 2 Lenny Bruce was not funny in that period of his career, even a little. Anyways, anyways, our jobs are embarrassing, is what I'm saying.
Anyway, our jobs are indeed embarrassing.

Speaker 2 So as you might guess from all of that, Sam was born into what amounts to America's like liberal aristocracy. He is a fucking coastal elite, right?

Speaker 2 This kid grows up on the Stanford campus to Stanford professors. One of his aunts teaches at Columbia University as like a professor there.

Speaker 2 He has close family connections to employees at Yale and at Harvard,

Speaker 2 as well as Stanford. Like his parents both go to Harvard, I think.
He is

Speaker 2 a, yeah, he's that. He is as,

Speaker 2 you do not get much more of a rarefied like intellectual air.

Speaker 2 He's wearing linens around. This is how I think about.

Speaker 2 Yes. This is a child who at age eight has strong opinions on Immanuel Kant.

Speaker 2 of cheer for him at the table. No.
Oh, we're about to get into that, Jamie. Love this.

Speaker 2 I just had a vision of a child sitting at like a holiday dinner and saying derivative. And then someone's going, oh, that's amazing.
Wow, he is really coming along, isn't he?

Speaker 2 Yeah, this is a little kid that, when he likes sits down at the doctor's office, pulls out a fucking, I don't know, Derida or something book. Just just so you know.

Speaker 2 Just so you know, he knows fancy philosophers. Yeah.
God damn it. Board book.

Speaker 2 So his parents raised him and his brother to be utilitarians.

Speaker 2 One of the articles about them I found

Speaker 2 into Spongebob.

Speaker 2 Okay. Yeah.
Yeah. I was

Speaker 2 raised to hassle cows in our back 40.

Speaker 2 His parents, nights are so this article notes that nights around the family dinner table often focused around debates about how to do the greatest good for the greatest number of people.

Speaker 2 In later interviews, with I'm going to get to this guy in a second, the absolute dick writingist journalist to ever write dick, Sam would claim that his most formative moment came at age 12 when he was weighing arguments around the abortion debate.

Speaker 2 So, first off,

Speaker 2 on point one,

Speaker 2 no.

Speaker 2 Because not only, no, also like in the context of like,

Speaker 2 where would he have been doing this?

Speaker 2 I'm guessing at like around the family table or when they have the, all, you know, everybody's got their brandy and he's drinking some sort of fucking tea that's insufferable and they're all talking about

Speaker 2 people's rights as if it's like a fun intellectual problem, like how to fix it. Because for them it is, because wherever they land, the rules aren't going to apply to them anyways.
Yes. Yes.

Speaker 2 Where does he fall? Where does he fall in the debate? That's a great question.

Speaker 2 So I'm going to quote now from an article previously published by Sequoia Capital and written by Adam Fisher, who should never be allowed to lift this article down.

Speaker 2 When I say the dick writingist, like fucking PR flak journal,

Speaker 2 it's shameful. Quote.

Speaker 2 A rights-based theorist might argue that there aren't really any discontinuous differences as a fetus becomes a child, and thus fetus murder is essentially child murder.

Speaker 2 The utilitarian argument compares the consequences of each.

Speaker 2 The loss of an actual child's life, a life in which a great deal of parental and societal resources have been invested, is much more consequential than the loss of a potential life in utero.

Speaker 2 And thus, to a utilitarian, abortion looks more like birth control than like murder. SBF, that's what they always call him, the kid, Sam.

Speaker 2 SBF's application of utilitarianism helped him resolve some nagging doubts he had about the ethics of abortion. It made him feel comfortable being pro-choice, as his friends, family, and peers were.

Speaker 2 He saw the essential rightness of his philosophical faith. So that's very fucked up.
That is, that is so deep.

Speaker 2 Like, the term choice is used at the very end there, but it's clear that, like, he's not thinking about this in terms of like the actual value of human bodily autonomy.

Speaker 2 That does not weigh in the utilitarian calculus for him whatsoever. No, that is

Speaker 2 to pull it arguably. My friend Robert, no.
No. No.

Speaker 2 And again, even, like, look,

Speaker 2 I shit reflexively sometimes on utilitarianism, not because of the inherent value or disvalue of thinking that way, but about the way it gets talked about by these people.

Speaker 2 But like, if you're actually a utilitarian...

Speaker 2 And you care about the greatest good for the greatest number of people, then bodily autonomy should factor into that, right? Like human bodily autonomy should be hugely important to you. Yes.

Speaker 2 But no, that's not logical. All that matters is like, well, how many,

Speaker 2 if less resources than this have been invested in the fetus, then it's not a person. So abortion makes, that's fucking bullshit logic.
Fuck you. You're doing too much math.
Stop.

Speaker 2 This isn't a math problem, Sam. Like, this is not a fucking math problem.
Not everything's a goddamn math problem. Robert, he won't listen to you unless you call him SBF.

Speaker 2 And I was like, why is Robert talking about sunscreen?

Speaker 2 SBF? Yeah.

Speaker 2 We'll get that. They all call him fucking SBF.
And I hate it, but also as this went on, I started using it more and more because it's a pain in the the ass to type his whole fucking last name out.

Speaker 2 All right.

Speaker 2 Look, this is one where I'm not going to give him a pass, but I get it. If you write about this fucker a lot, it does make it easier.
So

Speaker 2 anyway,

Speaker 2 all of this is very bad. But you know what's not bad, Jamie? Well,

Speaker 2 the products and services that support this podcast. No, that's not true.
They are. That's, well,

Speaker 2 I've checked.

Speaker 2 Hold on. I just ran a quick check on that, and you can't guarantee that even 1%.

Speaker 2 But what about the greatest good for the greatest number of people? And given that I'm a people, so

Speaker 2 it works out pretty well.

Speaker 2 It works out very well for me. I think that if you actually have more advertising revenue, you will actually build a really fast train like you've been promising me you will.

Speaker 2 Yeah,

Speaker 2 I'm going to build the Hyperloop.

Speaker 2 Yeah. Yeah.
And you've been saying that. I'm going to promise you one thing.
It's going to kill a hell of a lot more people than that Simpsons monorail did.

Speaker 2 And that, and, and I'm going to, and look, not everyone is going to hold you to task for that, but I am. Thank you, Jamie.
Thank you for keeping me honest and ensuring that

Speaker 2 we really make a memorable disaster. Look, I'm available anytime I'm not visiting my friend Liz in jail.

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Speaker 2 We are back.

Speaker 2 What a good time. So, Sam Bankman Fried is above all else a numbers guy.
And I guess as a kid, he was a numbers kid.

Speaker 2 His parents sent him to Crystal Springs Uplands, a fancy prep school in Hillsboro, California.

Speaker 2 I looked through the website because I wanted to make fun of it, but it just kind of seems like a really fancy school. I don't know.
I'm sure it's a great place to get an education.

Speaker 2 They make, they put a lot of, I will tell this, they devote a lot of screen resources to letting you know that they are not racist and that most of their students aren't white.

Speaker 2 They also have a French, they also have a French cinema class for sixth graders, which is fine, but the cranky asshole in me that still has a little piece of my soul raised by right-wing radio wants to say shit about it.

Speaker 2 I was raised by left-wing people, and I still think that that's some loser shit, man.

Speaker 2 I think that that's fucking dorky and goofy and like, should it's like, what?

Speaker 2 You know, you meet, because you meet people like that in the wild, and they're sometimes very, and maybe even often very sweet people but I'm like trying to be like oh you know who Plankton is and they're like no and then they're but they've been watching French movies since they were like seven and I just don't

Speaker 2 expect that if I meet a sixth grader with yeah if I meet a sixth grader with strong opinions about French cinema like

Speaker 2 I'm just gonna leave. I'm gonna leave.
I'm just gonna walk away. Wow, right, Robert, that's really brave of you to march out of a conversation with an 11-year-old.

Speaker 2 I am not, I'm not putting up with that shit. Absolutely not.
I'm leaving this sixth-grade class. My name's Robert Evans, and I think

Speaker 2 you're doofuses. Fucking

Speaker 2 go watch your what? Renoir, is that one of them? That sounds like one of them. Cloud Renoir.
Is he a painter or he music? Renoir is a painter.

Speaker 2 I know the one you're looking for, and I was looking for it too, but I don't remember. But guess who? Do you know who Plankton is? Of course, you do.

Speaker 2 I know who Plankton is, and I also know that at least one of the directors they study is a pedophile. Just knowing a little bit about French cinema.

Speaker 2 That's unavoidable.

Speaker 2 So

Speaker 2 he does well. Again, the school's probably fine.
He does well at the school.

Speaker 2 He was notably

Speaker 2 insular.

Speaker 2 He avoided most of his classmates to play StarCraft, which is good, and League of Legends, which objectively sucks.

Speaker 2 He also played a lot of Magic the Gathering, so I am confident he did not get laid in high school.

Speaker 2 This is based on extensive personal experience.

Speaker 2 Like, I just actually did some field research.

Speaker 2 Yeah, about four years of it.

Speaker 2 Okay, interesting. Yeah.
For college, he was accepted to and attended MIT, which marked out his family's elite North American University punch card.

Speaker 2 They really hit them all now now that they've got an MIT kid in the family. They get a free coffee.
There used to be an MIT. So when I was doing comedy in Boston, there was like

Speaker 2 MIT had like a secret comedy club that was just for MIT students, and it was awful. Oh, I'll bet that's oh God, yeah.

Speaker 2 They paid you okay, but it was like they're like, if you like, knew someone who like met someone who went to MIT and they came to your shows and they were like, oh, we've, we've, we did the math and you are allowed to come to our, they called it their speakeasy.

Speaker 2 I wonder if it's still around. It was so,

Speaker 2 it was, I mean, in substance.

Speaker 2 Yeah. Not a fun crowd,

Speaker 2 I will say,

Speaker 2 but best of luck to whatever was going on there. Yeah.
So he goes to MIT. He goes to MIT.
He might have been at one of those shows where he's,

Speaker 2 because he joins a fraternity there.

Speaker 2 An MIT. Well, Jamie, it's an MIT-specific co-ed nerd fraternity.
So nice. It's what could go wrong.
Epsilon Theta.

Speaker 2 And here's how Adam Fisher, the guy I hate, described them in his article, which was bad. Quote, a co-ed fraternity of super geeks, similarly interested in magic and video games.

Speaker 2 Thetans are fond of debating math, physics, computer science, linguistics, philosophy, and logic problems for fun at alcohol-free parties.

Speaker 2 Now, I do know a little bit about MIT, and I know another thing these nerds often do is kill themselves using nitrous oxide because they will try to flood entire rooms with nitrous to do like a 20% nitrous to O2 ratio and kill themselves.

Speaker 2 It's a thing that happens. Look it up.
MIT nitrous death.

Speaker 2 Yeah. Man, Man, all I did in college was drink too many blue moons.

Speaker 2 It's quite a thing.

Speaker 2 Yikes. So, I don't know.
What are you doing over there? I don't know. I don't know.
I don't know. I don't know how much I believe that they were always alcohol and drug-free parties.

Speaker 2 Because if there's one thing I know from nerds, it's that they do a shitload of drugs. I definitely didn't hear of this one because I went to a couple of MIT frat parties and they were

Speaker 2 not sober. Fun fact,

Speaker 2 one of the MIT frat parties I went to, for some reason when I was in college and when I would get really drunk, I would always, I would like, I would like to like steal things from wherever I was.

Speaker 2 And so I stole two critical pool balls from an MIT frat house and someone was able to trace it back to me and they demanded their pool balls back.

Speaker 2 And I

Speaker 2 embarrassingly, I think I capitulated. I think I did give them back.
I shouldn't. Wow.
Wow.

Speaker 2 Actually, so this one kid I'm finding in 99 died because he put a bag over his head to inhale nitrous, which is the fuck, man. How did you get into MIT?

Speaker 2 I don't know any.

Speaker 2 I don't know what we shouldn't be making fun of this guy. I don't know anything.
But

Speaker 2 don't put bags over your head, kids.

Speaker 2 Yeah. Fucking.
I learned that in public school, no less. So many other ways to do whippets than putting a plastic bag over your head.
Anyway, whatever.

Speaker 2 According next, according to the popular Sam Bankman-Freed endorsed version of the story, he pivoted towards an almost obsessive devotion to ethics in his freshman year. He went vegan.

Speaker 2 He organized a protest against factory farming. And he worried obsessively over how he could change the world for the better.

Speaker 2 And it was at this point that Sam met a man who was going to change his life forever. William McGaskill.

Speaker 2 If you want to learn more about this guy, I do recommend the episode of It Could Happen Here on effective altruism.

Speaker 2 This guy is today the

Speaker 2 pop philosopher of effective altruism and long-termism. He is in Elon Musk's text messages that we all got as a result of the Twitter lawsuit.
Oh.

Speaker 2 At this point, he was also at MIT, and he met with Sam at a cafe in Cambridge, Massachusetts, where McCaskill explained. Which one? Which one? Which one?

Speaker 2 I don't know. I'm sure it's out there somewhere, Jamie.

Speaker 2 I'm sure you've gotten a hot dog there.

Speaker 2 That seems likely. No, any place this guy's going, it doesn't have hot dogs.
They're not ethical. They're famously unethical.
So, yeah, you're probably right.

Speaker 2 So McCaskill explained the concept of effective altruism to him, which is, again, this idea that like what matters is

Speaker 2 you should like think kind of coldly and robotically about how you do help to make sure that your charity money does the most that it can do.

Speaker 2 But one of the big like arguments about it is that like, okay, well, what if you, you know, should you save a drowning child instead of saving like three kids from a burning building?

Speaker 2 And it's like, That's a nonsense choice. Nobody's ever been presented with that choice at any point in the history of the human race.

Speaker 2 It is not a reasonable, that is not a, there's no point to that ethical argument. You're not smart for debating it.
People have just dropped Robert. Yeah.
And it makes no sense.

Speaker 2 Yeah, it makes no fucking sense.

Speaker 2 There's like bits of it that are reasonable, which is that like, well, you know, it makes sense to like look at the best thing you can do financially, you know, in terms of donating money is, you know, malaria prevention because it winds up being the most cost-effective thing.

Speaker 2 But it's like, okay, does that mean we shouldn't put money into making the water in Flint, Michigan drinkable? And a lot of these guys will say no, because that's not the best use of money.

Speaker 2 And it's like, well, we can do many things with money, especially if we tax billionaires and put it towards rebuilding infrastructure.

Speaker 2 A number of things can be done.

Speaker 2 What?

Speaker 2 Sorry, I was going to say that. Anyway, to my frame Elon's shitty machine.

Speaker 2 McCaskill kind of pills this guy on effective altruism. He frames it as a strategic investment whose success...

Speaker 2 was measured in populations worth of human lives. He estimated using back of the envelope math that $2,000 could save one life, and so $1 million could save 500 people.

Speaker 2 A billion could save half a million, and a trillion dollars could theoretically save half a billion lives. Based on that totally legitimate math, people are math, Robert.

Speaker 2 If people are math, it all works out that way.

Speaker 2 Based on that absolutely real math, the only ethical way for a genius like Sam to use his time and talents is to become the world. world's first trillionaire.

Speaker 2 And I'm going to quote again from that article that I made.

Speaker 2 SBF SBF listened, nodding as Ms. Caskill made his pitch.
The earn-to-give logic was airtight. It was, SBF realized, applied utilitarianism.

Speaker 2 Knowing what he had to do, SBF simply said, yep, that makes sense. But right there, between a bright yellow sunshade and the crumb-strewn red brick floor, SBF's purpose in life was set.

Speaker 2 He was going to get filthy rich for charity's sake. All the rest was merely execution risk.

Speaker 2 His course established, McCaskill gave SBF one less navigational nudge to set him on his way, suggesting that SBF get an internship at Jane Street that summer. And so for the good of mankind.

Speaker 2 For the good of mankind, get in the finance industry and gamble like a motherfucker. Fatal asshole.
I swear to God. I fucking hate these people so much.

Speaker 2 What? Oh, God. Makes sense.
Yeah. You know, look, I think that...
Airtight. Airtight.
I can't debate that. There's no argument to be made about that logic, Jamie.

Speaker 2 I mean, I know that this is the wrong person to be turning on in this moment but this is the dick ridingist uh language this is the dick jamie's like he has not begun to ride dick this is this is joking he is joking on the man

Speaker 2 this man's got no gag reflex and no sign of slowing down jamie i'm gonna read you some passages from this that are going to make you gag it is unbearable so

Speaker 2 and it's like this article is like 10 000 fucking words it took me like an hour to get through this thing it's massive who is he's like maybe if i do it he'll give me a kiss on the mouth. We'll see.

Speaker 2 Well, basically, this was published by Sequoia, which is a massive like investment fucking fund thing on their website. Journalistic entity.
Yeah.

Speaker 2 It looks like that. It looks exactly like an article from like Wired or something.
Like they clearly laid it out like that. But I think it was done because they put like $200 million into his company.

Speaker 2 So they needed to justify it by making him look like a genius.

Speaker 2 So it's like those articles that like are occasionally, I mean, it's more scary when they're on actual journalistic outlets.

Speaker 2 And then there's just a little tag saying like, hey, this is sponsored by RuPaul's Fracking Farm or whatever the fuck.

Speaker 2 And it's like, why?

Speaker 2 Why fracking farm? RuPaul and ExxonMobil.

Speaker 2 LGBT icons. So

Speaker 2 Sam Bankman Fried gets into finance and he's a very good trader. I mean, I have no way to judge this, but Sequoia says he was a good trader.

Speaker 2 He was good at making a lot of money for other people and also a lot of money for himself. Besides,

Speaker 2 he gave away 50% of his income to his favorite charities, but those charities were mostly the Center for Effective Altruism and 80,000 Hours, which is also an effective altruism charity.

Speaker 2 What are they doing?

Speaker 2 That's a great question, Jamie.

Speaker 2 It allows guys like McCaskill to live very well while also saying they only take $30,000 in salaries and give away the rest because their lives are heavily subsidized by these organizations that allow billionaires to pretend to be heroes.

Speaker 2 Oh, so like so like charity. So like charity, yeah.

Speaker 2 So he remains there there happily for years until 2017 when he begins to feel as if something is not right. Now, spoilers.
He's having a quarter-life crisis. He is having a quarter-life crisis.

Speaker 2 And this kid absolutely is a con artist.

Speaker 2 And what I am giving you is the polished, press-friendly version of the story for a guy whose entire life, as far as I can tell, was one long setup for an ambitious con.

Speaker 2 So when I say stuff like he gave a lot of money to charity, because there's like other charities he gives to, some of which sound reasonable, but I have actually no evidence that he did.

Speaker 2 Like I have no evidence that he did, and I haven't seen it.

Speaker 2 So, when I say stuff like he felt like that, or when I say stuff like he felt unfulfilled at Jane Street, that doesn't mean he actually did, because we are at present reliant on a lot of reporting from back when this kid was the toast of Wall Street.

Speaker 2 Now, after his life fell apart and his company crashed and it became clear that he was a financial criminal, it also came out that the guy who wrote the big short has been following him for six months.

Speaker 2 So,

Speaker 2 I suspect at some point,

Speaker 2 that's going to be fun. We're all going to be in for a real treat when that book hits.

Speaker 2 I love when you're like, and guess who is following him around? You're like, oh, he's got Michael Lewis on his tail.

Speaker 2 And also, if you're an investor, shouldn't, like, somebody involved in one of these companies probably should have been able to find out, like, oh, hey, the big short guy's hanging out with him.

Speaker 2 That probably means this is a giant financial crime. That guy's not going to just hang out with a dude who's good at legally making money to write about how good he is at making money legally.

Speaker 2 That's not Michael Lewis's beat. I'm kind of going for like a change of pace this time.
Just kind of try to see a guy who's like doing something right. Yeah.

Speaker 2 Michael Lewis, aren't you the guy who only writes about financial crimes on like a gigantic scale?

Speaker 2 No, no, no. I think that this is, he's just probably just trying to network.
Yeah. He just just, she just really liked this guy's attitude towards altruism.
So anyway,

Speaker 2 yeah. Anyway, here's how that, again, very dick-writing PR flak motherfucker wrote about what happens next.
Quote-ha. He was, he realized, too secure.

Speaker 2 SBF's mind had been trained almost from birth to calculate.

Speaker 2 As a schoolboy, the hedonic calculus of utilitarianism had him trying to maximize the utility function, measured in utils, of course, for abortion.

Speaker 2 During his teenage game, I know, I know, that's a sentence.

Speaker 2 Doesn't he say, of course?

Speaker 2 No, no, I said that.

Speaker 2 Oh, wait, no, he does say, he does say, he does say, of course. Yes, measured in utils, of course.
Of course. Of course.
Oh,

Speaker 2 suck my ass, you fucking

Speaker 2 loser.

Speaker 2 During his teenage gaming years, his mathematical abilities allowed him to sharpen his tactics and win. And of course, every trade SBF ever made at Jane was the subject of a risk-reward calculation.

Speaker 2 All of it boiled down to expected value. The formula is fairly simple.

Speaker 2 If the amount won multiplied by the probability of winning a bet is greater than the amount lost multiplied by the probability of losing a bet, then you go for it, irrespective of units.

Speaker 2 Utils, Euros, dollars, we're all subject to the same reckoning. But at Jane, SBF Osmost another trading principle.
He learned to be risk-neutral.

Speaker 2 In simple terms, a trader, given a choice between a $50 and a 50% chance at $100, must be agnostic if they want to maximize the expected value of earnings over a lifetime.

Speaker 2 Those who prefer the sure win are risk-averse, and those who would rather gamble are risk-lovers.

Speaker 2 But both risk-lovers and the risk-averse are suckers equally, because over the long run, they lose out to the risk neutral who take both deals without prejudice. That makes no sense.

Speaker 2 That makes no sense at all because like you're assuming you have to like choose between one. Can you just take both? Is that like the is that the offer?

Speaker 2 Because it seems like the whole thought experiment is about choosing between one. None of this makes very much sense.

Speaker 2 I had a brain hemorrhage in the middle of that. And then I was thinking, I couldn't stop thinking about

Speaker 2 do you think that utilitarians, how do utilitarians feel about kissing with tongue? Do you think?

Speaker 2 How many utils does it take to kiss with tongue? Or don't waste your fucking time. Let me write the equation out, Jamie, and try to sketch out the math on.

Speaker 2 I think they wouldn't be into it. I think they would be like, what's the point? Yeah,

Speaker 2 that seems real. I only have five utils.
Sorry. Okay,

Speaker 2 Jamie, I got to continue this. What the fuck did that sentence say?

Speaker 2 I don't know, but we have to read another one.

Speaker 2 Quote, here, SBF realized, was the rub. When he applied this principle to his own life, life, he came up short.
There was little chance he'd get himself fired from Jane Street.

Speaker 2 Thus, the decision to stick with Jane was a risk-averse preference. It was the logical equivalent of being offered a choice between $50 and 50% of $100 and saying, give me President Grant.

Speaker 2 SBF was risk-neutral on behalf of Jane Street, but not, he realized, for his own life.

Speaker 2 To be fully rational about maximizing his income on behalf of the poor, he should apply his trading principles across the board.

Speaker 2 He had to find a risk-neutral career path, which, if we strip away the trader jargon, actually means he needed to take on a lot more risk. Now we're stripping it away.
Oh, JB, you need to hear this.

Speaker 2 Which, if we strip away the trader jargon, actually means he felt he needed to take on a lot more risk in the hopes of becoming part of the global elite. The math couldn't be clearer.

Speaker 2 Very high risk multiplied by dynastic wealth. Trump's low risk multiplied by mere rich guy wealth.
To do the most good for the world, SBF needed to find a path on which which he'd be a

Speaker 2 coin toss away from going totally bust.

Speaker 2 So

Speaker 2 the path is risk neutral, but that means taking a lot of risk because the most risk is the only way to become the wealthiest person in the world.

Speaker 2 And only by becoming the wealthiest person in the world can you avoid risk. You get it, Jamie? Yeah, and that's the most ethical thing you can do, right?

Speaker 2 That's clearly the most logical, ethical way to live.

Speaker 2 So do you think that they kiss with tongue or not?

Speaker 2 I mean, I think what he's saying is in order order to avoid the risk of catching an STD, you have to take on a job as the bathroom mat at a brothel.

Speaker 2 Oh, I see. That's the risk-averse, yeah, or risk-neutral presentation.
I'm frantically rubbing my final brain cells together, trying to make heads or tails of that. And just like

Speaker 2 nothing is sparking.

Speaker 2 It is howling clown shit. It is absolute sparking nonsense.

Speaker 2 It is like a vortex of bullshit to be like, so anyways, it's really clear and the math couldn't be clearer that he has to be the most richest guy or everyone is going to die.

Speaker 2 It's actually really urgent.

Speaker 2 You know, it's one of those things because I have known a number of rich guys in my life.

Speaker 2 And some of them are in late.

Speaker 2 There's two kinds.

Speaker 2 There's people who were poor at one point. And some of those people are unhinged.
And some of them still remember being poor enough to talk like normal people.

Speaker 2 And then there's people like this, who Sam was never rich as a kid, but he lived in this rarefied air where finance and like the

Speaker 2 concept of worrying about money or his economic status was not a thing because everyone around him when he was a kid was so high status. Right.
And he like he's just lived in this.

Speaker 2 It's not even a, it's not even a bubble. He grew up on a different planet.
Like the world does not exist to him the same way it does to everyone else.

Speaker 2 And so he's like, that's the only way you can talk about things in this way.

Speaker 2 That or you're a giant sort of sinister thing where you're talking about everything. Like it is very my

Speaker 2 thinking is like it's so easy for him and people like this to think of other people as theoreticals because they've never had a problem before. So it's like

Speaker 2 a game of chance.

Speaker 2 He's never met a person.

Speaker 2 Right, right. Like he has never known a human being.

Speaker 2 Just Stanford professors. Exactly.
Just Stanford professors and problems in his video games. So

Speaker 2 not that all nerd, I mean, I'm not,

Speaker 2 I'm afraid of nerd, you know, people who identify as nerds coming into my mentions. I'm not saying that that's everybody, but I'm saying like he's not

Speaker 2 socialized like a person. And that usually has to do with class.

Speaker 2 Yeah.

Speaker 2 God damn it.

Speaker 2 So the next thing that SBF did after deciding he had to quit Jane Street is start pondering how he might change the world in a way that minimized his risk by maximizing his risk or some shit.

Speaker 2 Anyway, as he told it, he considered four career fields.

Speaker 2 And

Speaker 2 these are his notes on the four things he might do after being a trader. Number one, journalism, low pay, but a massively outsized impact potential.

Speaker 2 Number two, running for office, or maybe just being an advisor. Number three, working for the movement.
EA, effective altruism, needs people. Number four, starting a startup, but what exactly?

Speaker 2 Number five, bumming around the Bay Area for a month or so just to see what happens.

Speaker 2 Again,

Speaker 2 sounds like a a bad bumble date. Like,

Speaker 2 so what do you do? He's like, um, well, um, so startup, maybe, but what is a startup, really? What is a startup? I don't know. So, again, he spent years working in finance.
He's got plenty of money.

Speaker 2 He came from the Bay Area. So, five was an option, and it's one he took.

Speaker 2 Um, and by the way, like, as a general rule, if you decide to quit your job and you have the financial ability to putter around for a month or two and think things through, not a bad idea. Sure.

Speaker 2 Um, but Sam is going to do this in the worst way possible. Uh, he eventually hits upon his great next idea, which is to make a shitload of money in crypto.
Now, when he quits Jane Street, it's 2017.

Speaker 2 And if you guys can remember back that far, that's the first big winter when cryptocurrency boomed.

Speaker 2 Like kind of all throughout the last quarter or so of 2017, Bitcoin was just sailing up, like massive rises. Ether had a big rise too.
Just kind of went around to

Speaker 2 early 2018. A lot of Bitcoin nerds who people had been making fun of for years became overnight multi-millionaires.

Speaker 2 And this was kind of the first point at which normal people started to think, shit, maybe I should get into this. Maybe I can make a lot of money, right?

Speaker 2 This is the thing that blew up Bitcoin. And there was a crash after this, but it recovered.
Yada, yada, yada.

Speaker 2 Sam was savvy enough to look at this and know that these moments where this thing, where a lot of funny money is on the table, but there's no regulation, and regular people have started to get interested because they think they might get rich.

Speaker 2 This is the point at which an unethical person can make the absolute absolute most money in a financial market, right? And you can be unethical.

Speaker 2 To quote one of the greats, you can be unethical and still be legal. That's the way I live my life.
Ha ha. And you know who else lives their life that way, Jamie Loftus? You and your tossing the ads.

Speaker 2 Yeah, that's right. I am indeed.
I am indeed, baby.

Speaker 2 Here we go. All right.

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Speaker 2 And we're back.

Speaker 2 So, J

Speaker 2 Jaloftis.

Speaker 2 Yes, it's actually J-Lo. It's the first, I'm the first person to use that.
And it's really starting to catch on. Bold.

Speaker 2 Oh, shit. Ben Affleck's calling me.
One sec, Jamie. Let me take this call.
Oh, that's my boyfriend. Oh, no, he's just weeping outside of a dunk and donuts and pocket dialed me again.

Speaker 2 Normal, normal Ben stuff, am I right? Oh, Ben.

Speaker 2 Look, Ben, sometimes

Speaker 2 I meet up with my friend Ben at the Atwater Dunks, and I really set him straight. It's nice.

Speaker 2 Yeah, Ben Affleck, sober for years, and looks like he's hungover in every single photograph. Oh, well, what a king.

Speaker 2 I know, I do, I do. I have a lot of, there's just something about him that warms my heart.
It's his back tattoo. It's his tattoo.
I was going to say you love his back tattoo.

Speaker 2 It's just, that takes courage, you know, moral courage. I just think he's so amazing.
He's fucked up.

Speaker 2 I think we need to have that back tattoo

Speaker 2 and still got to marry Jennifer Lopez.

Speaker 2 I think

Speaker 2 we should put his name on the Vietnam Memorial in honor of the courage that it took to get that back tattoo. I mean, he is braver than the troops.

Speaker 2 And he did for a while hold the status of most divorced man in America.

Speaker 2 But that is now. But he fixed it by hiring.

Speaker 2 I feel like the contest.

Speaker 2 I was going to say,

Speaker 2 they did get married at a plantation. I don't know.
Yeah, I mean, that's all very fucked up. But I do feel the contest for most divorced man.
Did you ever watch Dragon Ball Z as a kid, Jamie? Yes.

Speaker 2 I didn't. No, I didn't grow up with Dragon Ball Z.
Well, there's this thing.

Speaker 2 Dragon Ball Z would always do this thing where like you have this guy and he's like the most badass person ever that everybody has to figure out how to fight and it's this big problem because this is the most terrifying thing in the universe.

Speaker 2 And the next season, like there's something that's like a thousand times scarier. It's just this like power creep kind of thing.

Speaker 2 I feel like we've all been dealing with that with a divorced guy because divorced guy Ben Affleck doesn't even register on the divorced guy. Stale next to Elon.

Speaker 2 We're living in the edge of Kanye and Elon. There's some really divorced guys.
And look out because Tom Brady is about to fucking hit the World Trade Center.

Speaker 2 Tom Brady's going to go super Saiyan divorced. It's amazing.

Speaker 2 That is going to, a third divorced man has hit the World Trade Center. It is bad.

Speaker 2 It's bad.

Speaker 2 Oh, incredible. So back to Sam Bankman Freed.
All right.

Speaker 2 He has just decided to get into crypto.

Speaker 2 Now, the first way to make money in crypto that occurred to him, because he spends a bunch of time looking into the market, and he sees that there's this thing called, I think it's like the Kimchi

Speaker 2 premium or whatever like that. They come up with some weird kind of racist name about it, which is basically Bitcoin is worth a lot more in Japan and Korea than it is in the United States, right?

Speaker 2 It's like worth 15 grand in Japan and Korea, and it's like 10 grand in the United States, something like that.

Speaker 2 Why is that? There's a variety of complicated factors.

Speaker 2 Basically, there's a bunch of different laws around banking and who can and cannot hold accounts and execute trades in those areas that leads to this premium.

Speaker 2 Because like normally, if a premium like that, if the markets were kind of accessible to each other, if Bitcoin's worth 15 grand in Asia and 10 grand in the U.S., then you buy Bitcoin in the U.S.

Speaker 2 and you sell it in Asia and you get free money, right?

Speaker 2 Very obvious.

Speaker 2 If you can, but you can't do that because you can't get access to the, as an American, you can't like get a Chinese account in order to to buy Bitcoin there, right?

Speaker 2 Or a Korean account or a Japanese account. There's all these laws.
So you can't just do like a banking VPN. No, you can't.
You cannot do that.

Speaker 2 And no one can figure out how to do it, how as a Westerner to sell Bitcoin. over in these parts of Asia and get that premium, right? And like just get a bunch of free cash.

Speaker 2 Sam figures out a way to do it,

Speaker 2 which is basically like picking up a pile of free money, right? If you're buying Bitcoin for 10 grand and other people want to pay 15 grand for it, you're just making cash, right?

Speaker 2 Um, and primarily the way he does that is through friends in the effective altruism community who are like placed in banks and stuff over in Asia who like help him figure out how to do this.

Speaker 2 I'm not going to go into details.

Speaker 2 They, I mean, this fucking dick writing article spends a long time explaining how he figures this out. And it might even have been legal.

Speaker 2 He may not have broken the law to do this, although it's kind of hard to know because all of this is complicated finance gibberish.

Speaker 2 By the way,

Speaker 2 I'm honestly, I'm not getting a word of this.

Speaker 2 Finance guys call this an arbitrage, and it's basically the ideal that if you can, if there's a resource that's worth a bunch more money one place than it is the other place, you buy it where it's cheap and you sell it where it's expensive and you get free money, right?

Speaker 2 That makes sense. Yeah.
Yeah. Yeah.
Yeah. If I am, Jamie, Jamie.

Speaker 2 If my drug dealer sells me ketamine for like 40 bucks a gram, right?

Speaker 2 And I don't know, at a house party, you're hanging out at a couple of blocks away. Somebody

Speaker 2 says that they'd pay $70 a gram for ketamine. You can make 30 free bucks by taking the ketamine you bought for 40 bucks and selling it at that other house party, right?

Speaker 2 Okay, so that was you speaking to me in terms that you would understand, but I do think I got it. Yeah, yeah, yeah.
Ketamine makes everything make sense. Yeah.

Speaker 2 So you just gave it to me in Robert Speak. I got it.
I got it.

Speaker 2 He makes a shitload of money doing this, and he decides to roll this money into a company, which will allow him to hire employees to gamble with cryptocurrency at scale, to try and find different fucked-up little areas like this where they can make a bunch of money by executing trades.

Speaker 2 He picks members of the EA community as his first employees, including Carolyn Ellison, a former

Speaker 2 co-worker at Jane Street, who we will be talking about in a little bit, and Nishad Singh, a former Facebook employee.

Speaker 2 Industrial scale dick writer Adam Fisher lets you know that Singh is an incredible, almost impossibly good human being by describing him this this way.

Speaker 2 He often wears a t-shirt with the words compassionate to the core printed in diminutive all lowercase font over his heart.

Speaker 2 Do you think that this guy, this writer, like just, it's at this point, he's on like a bucking Bronco of SBF's dick? Like it's just absolutely ridiculous.

Speaker 2 He is 50% this guy's dick by weight. It is unbelievable.

Speaker 2 What does he think is going to happen for him?

Speaker 2 He's going to get paid by Sequoia to write a 10,000 word article that they then pull from their website when it becomes clear this man is a massive financial criminal. He's like, no, my greatest work.

Speaker 2 It's extremely funny. Now, look, I don't know Singh, but based on the description that guy gives, I am convinced he's murdered a child with his bare hands.
And that is my head cannon for this man.

Speaker 2 No one else would wear that shirt. So.

Speaker 2 These

Speaker 2 EA nerds all form a trading firm called Alameda.

Speaker 2 And in doing so, they came down on one side of probably the biggest split within the crypto community.

Speaker 2 See, the core of the idea that's not bad that exists within cryptocurrency is that decent is that centralized state-controlled money is like, has problems, right? You know,

Speaker 2 there's things about that that are bad.

Speaker 2 And it could be cool and useful to be able to separate the money from the state if you could do that, right?

Speaker 2 If you could do that in a way that reduced the state's power to like, you know, just lock down the bank accounts of dissidents and stuff like that. There's there's cool benefits to it.
Well, what if

Speaker 2 I just had an idea? What if we did that, but then we gave all the money to one guy?

Speaker 2 Well, that's kind of what keeps happening.

Speaker 2 So,

Speaker 2 but also, like, SBF's on the other side of this argument, right? Because

Speaker 2 obviously, most of the actual benefits of a truly decentralized online currency are just you can buy drugs with it over the internet. But still, that is a real value.

Speaker 2 People do, in fact, buy drugs using cryptocurrency, and that's fine.

Speaker 2 And the committed ideological crypto people tend to keep their money offline in a wallet only they can access, right?

Speaker 2 So you basically you have like a hard drive that has all of your crypto on it and that that only touches the internet when you plug that into your computer and you use it to make a transaction, right?

Speaker 2 And otherwise it's completely offline and so people can't just take it from you, right?

Speaker 2 Right.

Speaker 2 That's the smart people. This is a pain in the ass though, right? Like keeping it in this thing, like there's all these security, you can lose your password.

Speaker 2 People actually do lose their money this way too. But anyway,

Speaker 2 there's a...

Speaker 2 a measure to which it makes sense and is secure, but most people don't want to go through that pain in the ass.

Speaker 2 So they put all of their crypto currency in what are effectively crypto banks, these exchanges. And these exchanges are places like Mt.

Speaker 2 Gox, which a few years ago all of the money got stolen from, and FTX, which Sam Bankman Fried makes, which also all of the money gets stolen from, right?

Speaker 2 The people who are like, no, you shouldn't do what Sam is doing you shouldn't make an exchange because that's not decentralized and we like this because it's decentralized they are the ones who get robbed less often because because they're a little smarter um and that's part of the point these exchanges they're meant for people who don't see crypto actually as like well i i want to fight the state by removing my money from the banking system they're for people who are like i want to try to get rich quick by gambling right and that's why those people are also the most vulnerable to scams um Robert anytime you explain crypto with me to me even though I know I need to understand it for the context of the episode I just feel like I'm in a corner at a house party and I'm holding a clammy bud light and it's mostly empty and you're like just one more thing though because

Speaker 2 I mean the important thing to understand is that what Sam has done

Speaker 2 So crypto is like unregulated, right? It is detached from any state, okay? Right, which is why people like it, which is why people like it. Yes.

Speaker 2 Sam has what Sam has done is come in and he's not the first person in the Lampus to do this, and said, I have built a place where you can keep all of your crypto and you can trade it with other crypto to try to make money the same way people do with the stock market, right?

Speaker 2 Where it is more secure.

Speaker 2 No, because here's the thing, Jamie. He says it's secure, but here's the thing.
So you know how the banking system, how banks used to just go bust and everyone would lose their money?

Speaker 2 And it caused a Great Depression? You get that part of the history of finance, right? Oh, yeah. One of the characters from Titanic killed themselves over that.
Exactly, exactly.

Speaker 2 So that was a big problem. And we developed a bunch of regulations so that

Speaker 2 I know this part, Robert. So what Sam has done is he's built a bank that has none of that so that people can gamble on the internet.
Right? Okay, so he can't. That's all you need to do.

Speaker 2 Crypto Great Depression. Yeah.
Got it. Yeah.
Got it. Exactly.
That's all you need to understand is that Sam has built a big unregulated bank for people to gamble with.

Speaker 2 Yeah. Anyway,

Speaker 2 and this is, this is, it is, it could not have been clearer that this was a Ponzi scheme. In 2018, they put out an advertisement to investors, and I'm going to read it right now.

Speaker 2 I think you'll be like.

Speaker 2 We offer one investment product, 15% annualized fixed-rate loans. We can accept both fiat and crypto and can pay interest denominated in either.

Speaker 2 These loans have no downside. We guarantee full payment, the principal and interest, enforceable under U.S.
law and established by all parties' legal counsel.

Speaker 2 We are extremely confident we will pay this amount. In the unlikely case where we lose more than 2%, anyway, again, I'm not a finance expert.
Neither are you, Jamie.

Speaker 2 Banks offer like a 3% return on like a fucking,

Speaker 2 if you're like putting a pile of cash in a bank and you're getting 3% back, you're doing okay. 15%'s nonsense.

Speaker 2 No one can guarantee that. It's not a real product.
I was pretty struck by their use of the language, like, we're pretty confident we're going to be able to play.

Speaker 2 That just sounds like someone who is not actually very confident. And also, if this is, if you are, if you are investing in a mark in the stock market, right?

Speaker 2 And someone says this investment has no downside. It's impossible for it to fail.
That person's lying to you and breaking the law because it could and often does.

Speaker 2 Oh, right. Because then you're just, you're, you're making an almost guaranteed false profit.
Yes. Yeah.
Yes. You cannot do, you cannot say this stock can't go down, right?

Speaker 2 If you're a stockbroker, you cannot tell a client it is impossible for your investment in this company to fail because that would be a crime.

Speaker 2 But with crypto.

Speaker 2 But with crypto, it's uncharted territory, David. It's uncharted territory.
You can do anything. This is also a Ponzi scheme, right?

Speaker 2 What fucking Madoff was doing is he had this investment portfolio that was, I forget what the exact, but it was promising an unbelievably high return and guaranteeing that people would get it, right?

Speaker 2 And what he was doing is as new people put money into the investment, he was using their money to pay the old investors so that nobody noticed that things were fucking up.

Speaker 2 But eventually, new people stopped putting money into the thing, and it all fell apart, and a lot of people lost billions of dollars, right? Like,

Speaker 2 okay,

Speaker 2 I'm back. He was also using a lot of that money to live, you know, an incredibly lavish, rich guy life.

Speaker 2 Anyway, sorry, I only understand financial concepts when Selena Gomez breaks the fourth wall and explains it to me.

Speaker 2 I'm doing my best to be your Selena Gomez, but I do. Do you know who Selena Gomez is? Yeah, she's that chick from the thing.

Speaker 2 Nailed it.

Speaker 2 She's kind of in the middle of a fun scandal right now where she's in a feud with someone who donated her a kidney.

Speaker 2 What? Which is a very funny online feud. How do you have a feud with that person?

Speaker 2 Because she,

Speaker 2 okay, if you asked, Robert, this is something I can explain to you.

Speaker 2 So what happened was Selena Gomez needed a kidney donated.

Speaker 2 Her close friend who works in the industry, I didn't know who it was, but I guess she's like sort of famous, gave her a kidney a couple years ago.

Speaker 2 Then Selena Gomez turns around a couple weeks ago and says, I have no friends in the industry except Taylor Swift.

Speaker 2 In comes her kidney donor, being like, Oh, that's interesting because I'm one kidney lighter, dude. Like, I'm not quoting it, but yeah.

Speaker 2 And then, geez, and then Selena, instead of apologizing, Selena Gomez is like, Oh, sorry, I didn't thank every person I've ever met in my life. Yeah, but I mean, Selena, she did give you a kidney.

Speaker 2 Yeah,

Speaker 2 I, that's a special kind of friend. You guys weren't just like drinking buddies.
She literally gave you a kidney.

Speaker 2 And now

Speaker 2 she did the thing that you would use as like a joking description of someone who'd done a lot for you to like

Speaker 2 to hyperbolically say that you owed them a lot. You know who's done, and implying that Taylor Swift has done more for you than your kidney donor is so

Speaker 2 I just think it's the funniest feud of all time. All right.
We were talking about cryptocurrency. We weren't.

Speaker 2 We were talking about something.

Speaker 2 on this.

Speaker 2 Let's get back to cryptocurrency. Okay.

Speaker 2 So to talk about what came next after establishing Alameda, I'm going to quote again from that Sequoia write-up. At this point, mid-2019, SBF decided to double down again and scratch his own itch.

Speaker 2 He would bet Alameda's multi-million dollar trading profits on a new venture, a trading exchange called FTX.

Speaker 2 It would combine Coinbase's solid, stolid, regulation-loving approach with the kinds of derivatives being offered by Binance and others.

Speaker 2 He only gave himself a 20% chance of success, but in his mind, SBF needed extreme risk to maximize the expected value of his lifetime earnings, and therefore the good his earn-to-give strategy could do.

Speaker 2 The fact that he was, by his own lights, overwhelmingly likely to fail was besides the point. The point was this.

Speaker 2 When SBF multiplied out billions of dollars a year a successful cryptocurrency exchange could throw off by his self-assessed 20% chance of successfully building one, the number was still huge.

Speaker 2 That's the expected value. And if you live your life according to the same principles by which you'd trade an asset, there's only one way forward.

Speaker 2 You calculate the expected values, then aim for the largest one. Because in one, but just one alternate future universe, everything works out fabulously.

Speaker 2 To maximize your expected value, you must aim for it and then march blindly forth, acting as if the fabulously lucky SBF of the future can reach into the other parallel universes and compensate the fail sun SBFs for their losses.

Speaker 2 It sounds crazy or perhaps even selfish, but it's not. It's math.
It follows the principle of risk neutrality. Yes, it actually is crazy.
That's not math. I'm sorry.
That's actually not math.

Speaker 2 That wasn't math, but that was a lot of words all at once. That is like,

Speaker 2 oh my God, the spiraling logic of this. You are using hundreds of words and high-minded bullshit rhetoric to be like, gambling is the best way to make money.

Speaker 2 He used fabulously three times in one sentence. Yeah, man.
You know who I've heard this basic argument from?

Speaker 2 My friends Drunken Las Vegas explaining explaining what they're trying to play at the crap stand. Why they don't want me to leave the little horsey game.

Speaker 2 This is some, yeah, someone's like, no, don't leave the sex in the city slot machine. No.
And here's what I'm saying.

Speaker 2 You want to hear my mathematical thinking on gambling, Jamie Loftus? Because this will make more sense than anything that happens in the Sequoia article. Okay.

Speaker 2 When I go to Las Vegas, I find me the penny slots where I can see the most waitresses walking around with those little trays that they have the drinks and stuff on.

Speaker 2 Then I sit down at them and I don't start to play until one gets close to me. And then I press the button as soon as she walks past and I like catch her attention and then I get a free drink.

Speaker 2 And the way that it works out is that as long as I can get more free drinks than I'm spending at the penny slots, and mostly I'm just reading a book and hiding it while I'm at the penny slots.

Speaker 2 And I only press it when the waitress gets near.

Speaker 2 I don't like the other Vegas guys. I can drink effectively for free, right? It works out to be like 25 cents a drink if you're really smart about it.
That is that's my financial advice to all of you.

Speaker 2 I do respect that. How you make it even better.

Speaker 2 I used to go with a bag because when I was poor, what I would do is I would go to Vegas once every couple of years, usually for work, and I would get all the free drinks, which came in glasses a lot of the time.

Speaker 2 And I would keep the glasses. And so I was able to furnish my apartment with stolen Las Vegas glasses.
I love stealing glasses. I've stolen no fair share of glasses in my life.

Speaker 2 Sometimes I would get up to the floors where there were the nicer hotel rooms and I would find all the people who'd set out their plates and stuff from like room service.

Speaker 2 And I would just take those and take them back to my house.

Speaker 2 I respect that.

Speaker 2 I'm trying to think. I was like, I don't have a real system for well, actually, when I go to Vegas, I always stay at the hotel with a roller coaster on top.

Speaker 2 And here's what I do: I go on the roller coaster once, sometimes twice. Then I go see one show.
Usually it's horrible. The last time I went to see the Backstreet Boys, and guess what?

Speaker 2 I found out one of the Backstreet Boys isn't QAnon. And then I got bummed up from this.

Speaker 2 It was a real bumpy. That was a threat.

Speaker 2 The point I want to make, Jamie, is that what I just described to you, my Vegas strategy, has made me

Speaker 2 infinitely more money in net profit than Samuel Bankman-Freed is actually going to make in crypto curtsy. Oh, fun foreshadowing.

Speaker 2 So he would never hang out near waitresses, though, because he's probably afraid of women.

Speaker 2 He's probably afraid of them, but I am fine with asking women for a free drink as long as I'm paying at the penny slots, you know, so it's not weird. Wow.
Feminist icon, Robert Evans.

Speaker 2 Feminist icon, Robert Evans,

Speaker 2 getting those shitty Vegas Irish coffees because they come in the glasses I want the best. Those are nasty.

Speaker 2 Yeah, but I like the glasses they used to come in. They do have, I know, but then there's the consequence of having to drink what's inside.
Well, you know, Jamie, that's why they call me a hero.

Speaker 2 Nobody does. I'm a hatma Gandhi of the West, they call me.
The Jesus Christ of podcasting. These are all things people call me.

Speaker 2 If you're going to lie, make it realistic.

Speaker 2 So, James Sof. Anyway, let's continue.

Speaker 2 That's right.

Speaker 2 I'm like, yeah.

Speaker 2 I think it's hard to justify being risk-averse on your own personal

Speaker 2 impact, SBF told me when I quizzed him about it, unless you're doing it for personal reasons.

Speaker 2 In other words, it's selfish not to go for broke if you're planning on giving it all away in the end anyway. Again, just clown shit.
So

Speaker 2 all of this is a con, spoiler. So you don't have to think that much about it.

Speaker 2 In a recent series of text messages with a Vox journalist after his entire exchange exploded and everyone found out he was a financial criminal, Sam Bankman Fried more or less admitted that everything he'd had to say about effective altruism was a con, meant to get people to trust him and invest in his company.

Speaker 2 And I'm going to read the texts. Yeah, I'm going to read the texts to you between him and this journalist, who, by the way, he put money in the Vox.
So he helped fund this journalist.

Speaker 2 Wow.

Speaker 2 So the ethics stuff, this is the journalist. So the ethics stuff, mostly a front.
People will like you if you win and hate you if you lose, and that's how it all really works. Sam.
Yeah.

Speaker 2 I mean, that's not all of it, but it's a lot. The worst quadrant is sketchy and lose.
The best is win plus question mark, question mark, question mark. Clean plus lose is bad, but not terrible.

Speaker 2 He also misspells terrible, but whatever. The journalist then replies, You were really good at talking about ethics for someone who kind of saw it all as a game with winners and losers.
Yeah, he he.

Speaker 2 I had to be. He he.

Speaker 2 It's what reputations are made of to some extent.

Speaker 2 I feel feel bad for those who get fucked by it, but this dumb game we woke Westerners play where we all say the right shibboleths and so everyone likes us. And that's the actual truth here, right?

Speaker 2 That's the thing that's honest about it. It's like, yeah, man, it was all of this talk for everyone.

Speaker 2 That's the entire, this Miss Caskell motherfucker, the only reason his effective altruism thing exists as a funded thing is as a fucking shibboleth for billionaires who don't want to pay taxes and want to let the world crumble around them while sucking as much value out of the working class as they can and want to pretend like they're heroes at the same time so that people ride their dicks in articles like that fucking Sequoia piece.

Speaker 2 That absolutely fucking ridiculous text actually is like a very important document. It's incredibly important.
It's deeply crucial.

Speaker 2 I hate that there's such a crucial document that also includes he in it. Yeah, there's nothing to be done about that one, Jamie.

Speaker 2 Look, there's, it doesn't feel good, but you know, our previous most important document to that effect was an IM that said ha ha. So a text with he he is kind of the logical progression.

Speaker 2 That is fascinating. Do you have any like insight into like why he would so freely admit that now? I don't actually.
One of two things has to be happening.

Speaker 2 Because again, the spoilers, this all falls apart. His exchange goes from worth $32 billion to worth basically zero dollars in the space of literally my head anytime you say it like falls apart.
Like

Speaker 2 24 hours this happens. His net worth falls 94% in a day.

Speaker 2 Like it is, it all it collects because they realize that all of the money is gone, that he'd been taking money from one business and using to gamble in another and also to pay him and his friends.

Speaker 2 And all of the money that the investors had put in when they tried to withdraw it, like their money that was supposed to be in there on paper, none of the money existed because, again, he'd stolen it.

Speaker 2 Anyway, the context of this article makes it clear that he felt like, I don't know,

Speaker 2 whatever. This was all a confidence game, right? That's the key.
Yeah. All of this could work.
And the balance sheets, because people were looking at their balance, she's, I'm making money.

Speaker 2 I'm making money. These returns are great.
And that money existed on paper until they tried to take it out because then it actually wasn't there because he had already frittered it away.

Speaker 2 It's a confidence game. And we have an, you know, that's the way it actually worked.

Speaker 2 We also know, and this is all still coming out, so I'm not going to get too much into it, but we know that he had FTX loan himself, Sam Bankman-Freed, about a billion dollars.

Speaker 2 Like his paper value was like 22 billion, but he gave himself basically a billion dollars in other people's money.

Speaker 2 Although he may have gambled that away. It's really unclear how much money he actually has liquid at the moment.

Speaker 2 Okay. Do we think he has any? I have no idea.

Speaker 2 Either he was like actually a gambling addict and a narcissist and he really did lose it all, or this was a con from the beginning, knowing it would all collapse and he got as much as he could out of it and he's going to wind up someplace without extradition, right?

Speaker 2 Like that was the goal.

Speaker 2 If you asked me a couple years ago, I would have said it's the latter, but I feel like the last couple of years have demonstrated so often that like people are just straight up not smart and don't have a plan.

Speaker 2 And it is all a narcissist shell game.

Speaker 2 It's unclear at the moment. I'm going to read you some things at the end here and you can kind of make your anyway, whatever.
So after

Speaker 2 starting FTX, the company moves to Hong Kong and then the Bahamas.

Speaker 2 And they use, they buy these very, like a $39 million mansion that he lives in with his friends using FTX tokens, which is like internal cash that his company.

Speaker 2 company issues based on the perceived value of the company. They don't, how many rooms is that?

Speaker 2 It's a shitload. And they're able to buy it because everything's like they're paper.
On paper, they've gone from nothing to worth $32 billion in like a year or two.

Speaker 2 And these idiot like property owners in the Bahamas are like, well, clearly the best thing we could do is buy this building using the fake money they created for their own company that they tell us is worth a lot of money.

Speaker 2 This is worth it.

Speaker 2 So since everything collapsed, some people that SBF had like reached out to as early investors have commented about why they didn't invest in this company in the early days.

Speaker 2 And most of them, it's because like what they could see of his investments, the tens of millions that he promised to charities and the long... positions in risky crypto companies didn't make sense.

Speaker 2 They would look at like the things he was buying with the company assets and the things that like he was investing in and be like, well, there's no way he could have that kind of liquidity if this is a legitimate exchange, right?

Speaker 2 He can't have that kind of cash on hand. It doesn't make any sense.
Rich fucking assholes always always telling themselves like that. Yeah.
That's funny.

Speaker 2 And what's funny is that, like, I found one of these guys who, like, yeah, I didn't invest because I could tell it was a con and then was like, but I didn't tell anybody because I didn't want to get yelled at.

Speaker 2 No.

Speaker 2 That's

Speaker 2 that's unfortunately. I do see myself in that statement a little bit where I was like, oh, someone might be, someone might send me a rude text.

Speaker 2 I guess I won't say anything about this. Yeah.
Oh my God.

Speaker 2 It's very funny. It's spineless, goofy bullshit.
I don't know. I'll tell you one thing, Jamie.
He's a spineless guy who still has his fucking money.

Speaker 2 Wow, you're in love with him. That's what?

Speaker 2 Wow. Yeah, you know, whatever.
It's the finance industry. They're all ghouls.

Speaker 2 They're all ghouls.

Speaker 2 From what we can actually tell now, because again, this fucking Captain Dick writer, the bad writer, like, I have to read you another quote that I didn't have in my script.

Speaker 2 To give you an idea of just how much he fucking

Speaker 2 how much he loves SBF. Here's a quote

Speaker 2 from him.

Speaker 2 Okay, yeah, this is actually Jamie. Oh boy.

Speaker 2 This is when the writer, Captain Dick Ryder, is hanging out with him in the Bahamas at his office.

Speaker 2 And he's like, what if we kissed?

Speaker 2 Sensing an opportunity for connection, I chip in with my own two Satoshi, which is

Speaker 2 two cents, but a Bitcoin term. Anyway, whatever.
I'm going to walk into the ocean. Wow.
Okay.

Speaker 2 I don't pay any attention to social media.

Speaker 2 Not because I have any moral case against it, I say, but because for me, reading books is the highest bandwidth way I know to get quality information into my brain, which just craves the stimulation.

Speaker 2 I'm addicted to reading, which explains how I ended up being a writer. Oh, yeah, said SBS, says SBF.
I would never read a book. I'm not sure what to say.
I've read a book. Oh, my God.

Speaker 2 I hate them both because I'm not sure what to say. I've read a book a week for my entire adult life and I have written three of my own.
I'm very skeptical of books.

Speaker 2 I don't want to say no book is ever worth reading, but I actually do believe something pretty close to that, explains SBF.

Speaker 2 I think if you wrote a book, you fucked up and it should have been a six-paragraph blog post.

Speaker 2 Meanwhile, this guy's writing a 10,000-word article writing a stick that he will not read. Oh, this is a good thing.

Speaker 2 It's like two guys whose heads are made out of rocks just

Speaker 2 clonking against each other repeatedly. Just waiting for it.
Just wait, Jamie.

Speaker 2 Jamie, it hasn't gotten as bad as it's going to get. Oh, no.

Speaker 2 Whatever the case.

Speaker 2 I hate books.

Speaker 2 Whatever the case, I find myself sad for the man. And it occurs to me that my reaction is exactly what might be expected from a beta in the brave new world crypto is creating.

Speaker 2 Whoa.

Speaker 2 How can you write that and not leap off the top of a building?

Speaker 2 He literally self-identified as a beta tool.

Speaker 2 What I love about this is just like these. Well,

Speaker 2 we have to take it as given that crypto is creating a brave new world and none of us has any choice in that. It's inevitable.
It's unstoppable. It's going to dominate everything.
Which is like.

Speaker 2 Yeah. So I think again, what I wonder does he think? I think.
Wouldn't someone with IQ points to spare realize that dismissing books, all books, is essentially worthless might rile a writer?

Speaker 2 Was he playing with me? Is this fun? Is this humor? I'm satisfied with my meta-analysis until I realize that one can always increment the level of strategic play in this sort of game. It's like poker.

Speaker 2 Level one is just thinking about how to strengthen your own hand. Level two is thinking about what your opponent's hand is.

Speaker 2 Level three is thinking about what your opponent thinks your hand is, and so on.

Speaker 2 And since SBF is obviously a genius, I should simply assume that, compared with me, SBF will always be playing at level n plus one,

Speaker 2 which makes my analysis of the intent behind SBF's Books for Losers idea spiral into infinity and crash like a computer.

Speaker 2 Is this how you write about me in your diary?

Speaker 2 No, Jamie, because do you know what the only ethical, speaking of ethics, you know what?

Speaker 2 If you think this way about conversations, the ethical thing to do is fill your pockets with rocks and walk into the ocean. Wow, you're wolfing this guy.
Yeah, I absolutely am.

Speaker 2 Him and Sam Bankman Fried. I could not hate these people more.
I mean, they're both,

Speaker 2 there's never been two wronger people having a conversation. And of course, it came out, he's just like, well, obviously he's a genius.
We have to assume that because he became a billionaire.

Speaker 2 So in his

Speaker 2 billionaire, Robert, in his defense, that's math. He did that.
He kept a balance sheet. Like, we've now gotten access because he had to like go into bankruptcy and step down.

Speaker 2 So like now there's a caretaker trying to get people's money out of the company. And we know shit.
Like we've seen the Excel files where they kept their financial records.

Speaker 2 And it's him being like, this is basically bullshit. Like, sorry about this.
We fucked this up. We weren't weren't actually keeping records here.

Speaker 2 The company balance sheet, there was no accounting department.

Speaker 2 People would file their like, like, when they would spend hundreds, tens of hundreds of millions of dollars on things, they would just message each other on Signal about it to get approval and had

Speaker 2 deleted messages on. So there's actually like no record of a lot of the accounting.
They did at one point hire an outside accounting firm to handle their accounting of this $32 billion company.

Speaker 2 And the firm they hired is the first, it bills itself as the only metaverse-based accounting firm.

Speaker 2 Oh,

Speaker 2 God.

Speaker 2 The accounting firm for this $32 billion company exists entirely within a crypto-themed video game called Decentraland.

Speaker 2 It is so fucking stupid. You're stupid with everything you're saying.
Okay, so this is really, this is bad, and this feels bad to hear.

Speaker 2 I have a question. Yes, Jamie.

Speaker 2 Who is, I guess, because I am kind of back in Lizzie Holmesland because that whole last, I mean, like departments that should be, you know, taking care of shit don't even exist, which is very Theranos adjacent to me.

Speaker 2 Theranosi, yeah.

Speaker 2 Theranosian, if you will. As

Speaker 2 we've both written books, we can just make up writing books. Yeah, of course.
Yeah, that's mostly what writing a book is, for sure.

Speaker 2 I view myself as the beta of this conversation, and so I feel comfortable asking you, Robert.

Speaker 2 Who is ultimately affected by this like what is the like trickle down of this what happens

Speaker 2 um

Speaker 2 is it just other rich

Speaker 2 assholes or it does it affect regular like does it affect uh

Speaker 2 probably there will presumably be some here's the thing and here is why there's that lawsuit against like larry david and all those other guys who appeared in the ftx ad yeah

Speaker 2 presumably a bunch of regular people got suckered into putting their money on ftx and those people have probably lost some money.

Speaker 2 That said, for the most part, it's fine because most of the people who lost money are like gamblers who probably suck as much as this guy did.

Speaker 2 And it's one of those things, there's just an article, I think, at Financial Times, where someone was like, Actually, and I think they actually had a good point.

Speaker 2 We shouldn't regulate the crypto industry because if we regulate it, it will be brought in closer to the actual financial industry as it exists.

Speaker 2 And banks will put more investments into crypto and it will get seen as like legitimate and backed by the state.

Speaker 2 And so when these conmen destroy tens of billions of dollars overnight and cause panic in the industry, it will affect the real economy. And right now it doesn't seem to.

Speaker 2 And like, yeah, I guess that is kind of, that's not a bad point. Maybe we just let it die on its own.
I don't know.

Speaker 2 It seems like there's more, like, we'll, we'll know more. Yeah.
So, yeah, we will continue to learn more.

Speaker 2 One of the things that's funniest about this is that Sequoia, this investment firm, put like $200 million into the company, which they have all written off now. They're accepting it as a total loss.

Speaker 2 Oh,

Speaker 2 they're going full back girl on this. Okay.
Now, when you hear this very serious investment firm put $200 million into this business, you probably assume, Jamie, wow, I bet he had a good pitch, right?

Speaker 2 I actually, I don't know. If we're talking Theranos, I actually don't think that that is, that's not disqualifying to have a dog shit pitch.

Speaker 2 You know who can make this clear for us is Captain Dick Ryder. Oh, thanks.
SPF told Sequoia about the so-called super app.

Speaker 2 I want FTX to be a place where you can do anything you want with your next dollar. You can buy Bitcoin.
You can send money in whatever currency to any friend anywhere in the world.

Speaker 2 You can buy a banana. You can do anything you want with your money from inside FTX.
Suddenly, the chat.

Speaker 2 It's also like

Speaker 2 a banana cost. I don't know.
I feel like I can do anything I want with my debit card. Like, I've never run into a thing I wanted to buy and been like, ah, I cannot.

Speaker 2 No, how do I I actually do that? Even I could even buy drugs with it by going to an ATM. If I were to be a person who buys drugs, which I'm not, I could go to an ATM and take out cash and purchase.

Speaker 2 Support your local drug dealer and banana vendor for crying out.

Speaker 2 So he gives this banana pitch. Quote, suddenly the chat window on Sequoia's side of the Zoom lights up with partners freaking out.
I love this founder, typed one partner.

Speaker 2 I am a 10 out of 10, pinged another. Yes, exclamation point, exclamation point, exclamation point, exclaimed a third.
What Sequoia was reacting to was the scale of SBF's vision.

Speaker 2 It wasn't a story about how we might use FinTech in the future or

Speaker 2 crypto or a new kind of bank. It was a vision about the future of money itself, with a total addressable market of every person on the entire planet.
I sit 10 feet from him, and I know it's.

Speaker 2 These people are just

Speaker 2 showing like three executives doing lines of Coke and one swallowing a banana with the peel still on. They're like, yes.

Speaker 2 Yep.

Speaker 2 Oh, my God. Okay.
Yeah. So it's,

Speaker 2 I mean, which does kind of continue with the trend of like, you know, SBF has never had a problem or a, like, anything to overcome.

Speaker 2 Like, if it's this easy for him to con people into shit, like, of course you would have a God complex. You've never.

Speaker 2 You've never been told no. Yep.
Yep. Yep.
Yep. Yep.
It's cool. So what Sequoia was reacting.
Yeah. Sorry.
sorry, I have to continue this, this fucking quote.

Speaker 2 And next he's going to talk about a person who works at Sequoia and is in the room for this. I sit 10 feet from him and I walked over thinking, oh shit, that was really good.

Speaker 2 Remembers Aurora. And it turns out that fucker was playing League of Legends through the entire meeting.

Speaker 2 And this is framed in the article and in all the coverage before everything fell apart is like so awesome. He's so cool.
This writer talks a bunch about how like Sam never stops playing video games.

Speaker 2 When he's talking to this writer, when he's having corporate meetings, he's playing video games basically 100% of the time.

Speaker 2 Um, and this is always mentioned as like, he's always working, he's always in the office, he sleeps in a beanbag chair at his desk.

Speaker 2 And it's like, no, dude, he's not always working, he's conning you, and he plays video games all the time and pretends that that's a fucking job, um, which is great, great con. Good for you, buddy.

Speaker 2 Always working and always there, two very different flavors of things happening.

Speaker 2 Exactly. Yeah, um, it's all part of the fucking con.
So is the fact that he he always wore like ratty old athletic shorts and like a wrinkled t-shirt.

Speaker 2 Because like that's for if you are a young man in the tech industry, that makes people think you're a genius, right? Because geniuses dress like shit.

Speaker 2 Yeah, he's like, now, if I bring a real stink into the room, people are going to like jack up my already fake IQ score about 20 points. Yeah, this is fucking horseshit.

Speaker 2 And it's what, you know, who else dresses like shit? The guy I used to buy weed from. Oh.

Speaker 2 Yeah. Yeah.
Yeah. Does he also get a bad thing?

Speaker 2 You know who wears the same outfit as Sam Bankman Freed? My old buddy, who once at a party got into an argument with a guy and broke 15 bones in his face because they were both drinking.

Speaker 2 Not a corporate genius. I do like that shared aesthetic where it's like, really, the difference is the pet snake.
That is, that's the, that's, that's how you truly can sniff out

Speaker 2 the millionaire

Speaker 2 from the average. Yes.
So anyway,

Speaker 2 he's the same kind of person as Elizabeth Holmes. And he was, again, he's a confidence man.
And this gets us into the Larry David shit.

Speaker 2 Because the thing about being a confidence man is that as long as people are convinced their money is safe and most of them don't try to pull it out, then you can keep the con going and you can keep the fake numbers increasing and everyone will think you're richer and you can actually get real money out of this.

Speaker 2 So one of the things that he did is he would pour shitloads of money into sponsorship deals and to other ventures to make his company seem legit. One way he did this, come in.

Speaker 2 Yeah, he spent $17.5 million through FTX to sponsor the athletic teams at UC Berkeley. He launched a $20 million ad campaign with Tom Brady and Giselle Bunchen.
He offered NFTs at Coachella.

Speaker 2 And he spent $135 million on the naming rights for the Miami Heats home arena. And the purpose, this is all to build confidence, right?

Speaker 2 You see, you see it's the fucking, it's the same thing crypto.com did, by the way, with the arena in yellow.

Speaker 2 I was about to say, I was like, I feel like the crypto.com arena is not long for this world. And

Speaker 2 we don't

Speaker 2 recognize that as an actor. Is my money safe in this thing that's a bank but not a bank? Well, their name is on the arena, so it's probably legit.

Speaker 2 Here's the thing is like, yeah, it's like now walking into the crypto.com arena, I couldn't feel less safe. I couldn't feel less secure.
Nobody couldn't. Unlike when it was the Staple Center.

Speaker 2 I'm like, oh, you know what's never going to go out of style? Little notebooks. People have been using Staples since we were cavemen, I assume.
So

Speaker 2 just like the worst

Speaker 2 fucking name on earth.

Speaker 2 It infuriates me. These people.
Sophie has a dog in the fight. I do.
In his interview with Vox, Sam basically admits this, albeit in a slightly careful way. Journalist.

Speaker 2 So FTX technically wasn't gambling with their money. FTX had just loaned their money to Alameda,

Speaker 2 who had gambled with their money and lost it. And you didn't realize it was a big deal because you didn't realize how much money it was?

Speaker 2 Sam responds, and also I thought Alameda had enough collateral to reasonably cover it.

Speaker 2 Journalist says, I get how you could have gotten away with it, but I guess that seems sketchy even if you get away with it. Sam, it was never the intention.
Sometimes life creeps up on you.

Speaker 2 He literally said, Life comes at you fast. Yes, life comes at you fast.
So Sam's net worth taps out at around $22 billion on paper.

Speaker 2 In reality, neither Alameda nor FTX had ever taken taken in even close to that much money.

Speaker 2 The valuation was based entirely on nonsense calculations that were themselves based on lies from FTX's extremely cooked books. There's a lot more about this than we're getting into.

Speaker 2 People are still finding this all out. There is one thing I should probably read, which is: so, you know, when his company collapsed, he had to step down from running it, right?

Speaker 2 And because a lot of money is still in there and a lot of like investments are still tied up in that,

Speaker 2 they put a guy in charge of the company again, right? And there's like, there's specific dudes in the business world

Speaker 2 whose like job is to come in when a company fucks up like this and like try and get as much money back out for the shareholders as possible to minimize the bleeding.

Speaker 2 So they kind of have like a like how they they had in like old Hollywood. They have like a fixer guy.
Yeah, yeah, yeah. They have a fixer guy.
And this is this fixer guy specifically.

Speaker 2 He is the guy that they brought in

Speaker 2 when Enron, he took over Enron after it fell apart in order to try and like minimize the damage from it.

Speaker 2 So he is the guy who got brought in to deal with the fact that this massive fucking crime happened with Enron. One sec.

Speaker 2 My favorite Enron memory, not that you asked, Rude,

Speaker 2 was

Speaker 2 the Women of Enron Playboy spread that I got to archive during my time there. Oh, God.
Boy, did those Enron girl bosses have their...

Speaker 2 Second only to Women of 7-Eleven, which is my actual favorite spread. Continue.
First off, Shane, this company has about a million creditors.

Speaker 2 So about a million people possibly lost their entire investment in this company, which is a stunning amount of people to take money from.

Speaker 2 And again,

Speaker 2 we are probably looking at like five or ten billion dollars stolen, something like that. It's kind of unclear the exact amount.

Speaker 2 But anyway, this is what the guy in the Delaware bankruptcy court filing, this is what the guy who was, the guy who took over Enron after it became clear that the whole company was a criminal enterprise?

Speaker 2 This is what that guy wrote about Sam's company. Oh, no.
Okay.

Speaker 2 Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.

Speaker 2 From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.

Speaker 2 Again, that's the guy who took over Enron. I was like, that is literally like Bill Clinton dropping a notes post being like, never have I seen a more cheated on my wife.

Speaker 2 That is so absurd. Well, I will say it's different.
This guy did not commit any of the Enron crimes, right? This is the guy who comes in. He saw them all.
No, no, no, no, no. This guy is after.

Speaker 2 He's brought in the it becomes clear that every.

Speaker 2 No, no, this is. That guy's starting a sentence with never in my career.
This guy, yeah.

Speaker 2 It's probably best to look at this guy as like an EMT.

Speaker 2 When it becomes clear that a company that has a shitload of money in it and is central in the economy has collapsed because people broke the law, he comes in to minimize the damage.

Speaker 2 But he was not working at Enron previously, right? Like it's not, he's not trying to like stop anyone from getting in trouble. He's trying to minimize how many people are hurt by this.
Yeah, anyway.

Speaker 2 No, of course. Yeah.

Speaker 2 I just want to make clear like that guy's job. Anyway, whatever.
Yeah, he's not the Enroner. He is not the Enroner.
He did not make Enron bad.

Speaker 2 He just was there afterwards and was like, this company's even worse. He bought the issue of Playboy and then he kept it pushing.
Yeah. So I should, God, there's, yeah, we're getting close to done.

Speaker 2 I should note that before everything collapsed, Sam, again, he's in the effective altruism.

Speaker 2 He promised to donate like a couple of hundred million dollars to these EA causes. A lot less than that actually

Speaker 2 got out. Some of them were good, but a lot of it was like, so he made a huge point that he was like, his, one of his major priorities was pandemic prevention, right?

Speaker 2 We have to to stop the next pandemic. I'm going to put as much money as I can into pandemic prevention.
That's the best effective altruist thing that I can do.

Speaker 2 To talk about how well that actually worked, I want to quote from the Washington Post here.

Speaker 2 FTX-backed projects ranged from a $12 million to champion a California ballot initiative to strengthen public health programs and detect emerging virus threats amid lackluster support the measure was punted to 2024 to investing more than 11 million on the unsuccessful congressional primary campaign of an Oregon biosecurity expert, and even a $150,000 grant to help Monclef Slough, the scientific advisor to the Trump administration's Operation Warp Speed vaccine accelerator, write his memoir.

Speaker 2 So that sounds like a giant waste of money, right? That sounds like

Speaker 2 none of it wrong.

Speaker 2 Even if it was like good, it sounds like it didn't account. Like even if the goals were good, like, well, the ballot measure failed, like, it got punted.
So it's not like it worked.

Speaker 2 And it gets worse because SBF's fund also put a lot of money, like $5 million into ProPublica. And ProPublica, they've done a lot of cool stuff.

Speaker 2 They also recently published an extremely flawed investigation that backed the lab leak hypothesis.

Speaker 2 The L.A. Times and their analysis of this deeply flawed piece of reporting.
And also, you know, we've got some notes for the L.A. Times as well.
Yes, nobody's perfect.

Speaker 2 The L.A.

Speaker 2 Times called it a train wreck, noting, the article is based heavily on Chinese language documents that appear to have been mistranslated and misinterpreted, according to Chinese language experts who have piled on on via social media since its publication.

Speaker 2 It also takes his gospel, a report by a rump group of Republican congressional staff members asserting that the pandemic was more likely than not the result of a research-related incident.

Speaker 2 And this has been the fact that ProPublica published this has like provided a shitload of fuel to the, it was all a fucking lab leak from China. It's China's fault.

Speaker 2 I was like, Republican shit.

Speaker 2 Yeah, Sam Bankman Fried funded that shit.

Speaker 2 Oh my God.

Speaker 2 Yeah, basically, none of the shit he was putting in money into that was supposed to be good really worked. And a lot of it was.

Speaker 2 So another thing the right is doing right now is they're talking about he was like the number one or number two donor to Democrats during the midterm elections. Right behind Seth McFarlane.
Yeah.

Speaker 2 Yeah. But none of his donations worked.
And also he gave, it was like 32 million he gave to the Dims. He gave like 24 million to the Republicans.
And the reason he was giving this money,

Speaker 2 number one, there were some like pro pandemic response candidates he wanted to back, most of whom didn't, you know, do well.

Speaker 2 But also, like, a lot of the money was towards Republican and Democratic candidates who were going to be part of the regulation of the crypto industry because he wanted to have a seat at the table and push regulations in a way that.

Speaker 2 Yeah, okay. So the candidate that would enable that is that he might be.
Yeah.

Speaker 2 Exactly.

Speaker 2 So anyway, in general, nothing at Alameda or FTX was as it seemed. In that dick writing Sequoia article, Carolyn Ellison, the CEO of Alameda,

Speaker 2 he talks about her a bit and like she frames her as like this quintessential innocent nerd girl, plucky and ethical and optimistic, to show like these are the kind of you know smart young ginsy kids that are you know building uh this this great company and like she showed up in larp gear to meet with Sam and talk about the future of their great financial enterprise and she's an ethical altruist.

Speaker 2 Um, since everything fell apart, it's come out that she and Sam were dating each other and possibly other members of the company. Um, and also people have found her.

Speaker 2 The full Liz Holmes look has

Speaker 2 Here we go. People have found her Tumblr.

Speaker 2 And boy, is she sketchy as hell.

Speaker 2 I'm going to quote from a report on her tumbler activity in Decrypt.com. Boy howdy.

Speaker 2 When I first started my first foray into Poly, I thought of it as a radical break for my trad past, the account wrote in February 2020.

Speaker 2 But TBH, I've come to decide that the only acceptable style of poly is it best characterizes something like Imperial Chinese harem.

Speaker 2 The account went on to detail how a polyamorous dynamic should ideally function as a cutthroat market of sexual competition and subjugation.

Speaker 2 None of this non-hierarchical bullshit, the account elaborated. Everyone should have a ranking of their partners.

Speaker 2 People should know where they fall in the ranking, and there should be vicious power struggles for the ranks. Oh my god.
It gets worse, Jamie.

Speaker 2 The Ellison-linked account also demonstrated a substantial preoccupation with HBD or human biodiversity, an online euphemism for the discredited fields of race, science, and eugenics popularized by the old rights.

Speaker 2 Oh, oh boy, give me one more paragraph, and then we can talk about this, Jamie. Ellison has, for years, vocalized her die-hard obsession with Harry Potter.

Speaker 2 In one post, her affiliated Tumblr account tied her love of online character quizzes to her pinchant for sorting Indians by their cast, which she presumed to indicate genetic distinction. Oh my god.

Speaker 2 Holy shit.

Speaker 2 Even J.K. Rowling wasn't thinking something that fucked up, and that's really saying something.

Speaker 2 Someone needs to tell me that. It's amazing.
astonishing.

Speaker 2 Tumblr is exclusively for Sherlock fan fiction and things that trigger my eating disorder. That's it.
I cannot fuck, like,

Speaker 2 oh, that's so dark. It's, I almost can't fathom it, right? And again, there's so much.

Speaker 2 We probably will do a follow-up at some point because, like, the fact that the fact that it was this easy for like some fucking crypto rag, they're not the only ones who reported on it, to find her Tumblr where she talks about race science makes me think these guys were all probably into a lot more fucked up shit shit than they let on.

Speaker 2 Yeah.

Speaker 2 So we'll see. God.
We'll see.

Speaker 2 I just,

Speaker 2 I, we don't have the hour for me to decompress the way I need to after hearing that sentence specifically. Yeah, I am, I need a cigarette.

Speaker 2 I'm going to start smoking today. And I hope she's fucking happy.
Oh my God. That is

Speaker 2 a brutal place to land. Thanks for fucking nothing, Robert.

Speaker 2 Anyway, hopefully they're all of their money's gone, but they probably squirreled away millions and stuff for themselves.

Speaker 2 Although, at least one of the articles I've read says that, like, his net worth is effectively zero now.

Speaker 2 But I don't think anyone actually knows what his net worth is right now, like, and how much he got.

Speaker 2 Like, his company went from valued at $32 billion to most recently, there's something like $650,000 in actual assets left.

Speaker 2 But I also kind of think he and the others probably have millions or tens of millions that they set aside

Speaker 2 in shady ways for themselves. Wow.
Yeah. I mean, well, that does sound

Speaker 2 like what

Speaker 2 the beanie babies guy would do, and that is my yardstick for morality. That is so,

Speaker 2 that is very, very scary to consider. I feel like guys like that, the thing that is,

Speaker 2 I mean, I don't know, whenever you hear about, like, it is so karmically satisfying to know that someone like SBF can be completely bottomed out and, like, destroyed by something like this.

Speaker 2 But the thing is, like, when rich guys like that lose everything, they just come up with worse, more hateful ideas and then come back. And that is, like, always what kind of scares me about that.

Speaker 2 Yeah, it is

Speaker 2 so funny.

Speaker 2 I don't know, Jamie. I don't know what the solution is.
That's not like I want them to have money again. I just, you know, what, how can you make someone say less? Again, I think the solution.

Speaker 2 Podcaster's dilemma. I think.

Speaker 2 Look,

Speaker 2 here's where I'll land on this. You know,

Speaker 2 I don't think people should be thrown into cages generally unless there's literally no other way to stop them from harming folks.

Speaker 2 And I don't think that's the case with these people.

Speaker 2 So instead, I think the actual solution is to close from the outside all of the doors to that the fucking rich person apartment complex they occupy in that Bahamas development lock it from the outside and once a week drop in food and necessities via a helicopter and never let them leave or use the internet again Yeah, have them all just be with their friends in their in their weird little compound going increasingly insane with their Chinese harem shit.

Speaker 2 I don't know. I guess that's another kind of prison.
But if we film it, we can make money.

Speaker 2 But then SBF might may have to face his worst fear, which is reading a book. Yeah, I guess like my serious answer is what do you do to people like this?

Speaker 2 Is you stop them from ever being able to have access to money again or start companies again? And hopefully eventually they find something to do that actually helps human beings and is like

Speaker 2 of any kind of use. Like working at a grocery store, that's a real benefit.
People need to get food and people need like that's a respectable, honest way to make a living.

Speaker 2 And if any of these people were to get a job working in a safe way, they would be providing an infinitely greater benefit to the human race than they could ever have performed with.

Speaker 2 Perhaps a bit more of that ethical side of the ethical altruism you were looking for. Yes.
I'll be honest, I did not come to the recording today with a solution for the prison industrial complex.

Speaker 2 I don't know how to do it. But I still don't like it.

Speaker 2 I still don't love it.

Speaker 2 Yeah.

Speaker 2 Yeah, I have no solution.

Speaker 2 But you know what I do have, Jamie?

Speaker 2 What? Your pluggables.

Speaker 2 No, you don't. I have those.
Well, you have them, but I'm letting you have them. Oh, my God.
I don't know if I can do it. I am giving them.

Speaker 2 I mean, I could probably do them if nobody wants to take this job.

Speaker 2 I'll do them. Sophie, do you want to do them? Yeah, I mean, you can pre-order Jamie's book.

Speaker 2 And that is linked in her Instagram bio.

Speaker 2 That's true. You can follow her on Instagram at JamieChrist Superstar.
And you can follow her on Twitter at Jamie LoftusHelp if Twitter's still around.

Speaker 2 She has a podcast that she co-hosts with Caitlin Dorate called The Vectal Cast. You should listen to her many limited-run series, including her most recent run, which is Ghost Church.

Speaker 2 Which Sophie produced along with the Vectalcast and everything. Every podcast on the planet.
This has now become a plug for me.

Speaker 2 Do I get everything, Jamie?

Speaker 2 Yeah, that's exactly what I would have said, except worse. Yeah, so

Speaker 2 pre-order raw dog.

Speaker 2 Yeah. Thanks, Sophie.
Yeah, pre-order raw dog. If you listened to the hot dog episode of Bastards and didn't like it, you did like it.
Now buy the book. Yeah, legally you did like it.

Speaker 2 And if you disagree with that statement,

Speaker 2 we will send the CIA to kill your family. Yeah, and that, and let's make sure to attribute that quote to Robert Evans specifically.
There we go.

Speaker 2 And speaking of Robert Evans specifically, Robert Evans specifically, Margaret Killjoy specifically, and myself will be doing a Behind the Bastards virtual live stream show on December 8th.

Speaker 2 You can get tickets at moment.co slash btb.

Speaker 2 Love it. Yeah.

Speaker 2 Also, I have a sub stack now because Twitter's not doing great. So that makes me so sad.

Speaker 2 Why? I like writing things. I got to write a thing last night.
Sophie, don't you want me to write more things? I subscribe. Better for me than being on Twitter all the goddamn time.

Speaker 2 Yeah, you can find it at shatterzone.substack.com. Go there, and I will be writing.
I'll try to write something every week. Maybe I won't.
Maybe all of this will

Speaker 2 fall apart, be lost in time like tears in the rain. Or maybe you'll get a new thing from me every week.
There's no way to know.

Speaker 2 Every time, half the time when I get something from someone's substack, because I subscribe to quite a few, but every time I get a message from someone's substack, it's always like, I'm so sorry.

Speaker 2 I'm like, i didn't notice just give me the content and i'll send you out yeah yeah it's fine look we all we i don't know i've been meaning to write more stuff uh as opposed to just tweeting posts so maybe it'll happen maybe it won't there's no way to know perfect bye

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Speaker 2 Welcome to the movies you liked as an adolescent and are now ashamed of Shamecast. I'm Robert Evans, and today in the seat of eternal self-hatred, Jamie Loftus.
Jamie, you have just admitted.

Speaker 2 Prior to the show starting, that you once loved the Dana Carvey vehicle, Master of Disguised. What do you have to say for yourself? I feel fucking sick with myself, Robert.

Speaker 2 I haven't been able to sleep in the 20 years since its release.

Speaker 2 In my defense, it came out on my birthday, which I feel like had a lot to do with why I considered it my favorite movie. I felt a kinship with it.
Yeah.

Speaker 2 Birthdays are like a performance-enhancing drug for movies that you see when you're 11.

Speaker 2 Absolutely true. It's a blood doping of positive movie memories.
And furthermore, it's the most famous children's movie that was shooting on 9-11.

Speaker 2 And so I think in that way I also felt like it would have been disloyal to my country to say a word against the Master Disguise, particularly the Turtle Turtle scene.

Speaker 2 However, you know, I think the movie certainly doesn't hold up and I feel fucking sick with myself every single day. Yeah.

Speaker 2 I wonder, because famously, Dana Carvey was dressed as the turtle man when those planes hit those towers, and James Cameron was 20,000 feet below sea level

Speaker 2 exploring the bottom of the ocean. And I wonder if they ever crossed paths at like a Hollywood event and started talking about 9-11.
So what were you up to on that day?

Speaker 2 And then Mark Wahlberg just leans in apropos of nothing and is like, if I was there. I would have stopped it.
Oh, Jamie. You know,

Speaker 2 I can honestly say 9-11 was the first time I felt like this country let me down because it delayed the release of the seminal Tim Allen film, Big Trouble, which

Speaker 2 features a classic Patrick Warburton performance, by the way. It sure does.
God damn right. You see his ass, everybody.
If you want to see Patrick Warburton's ass, it's in that movie.

Speaker 2 He is so underrated. I tell you,

Speaker 2 I love that. I love that man.
A total kid. What a talent.

Speaker 2 What a card, friends. Just to say.
This is behind the bastards. This is behind the bastards, a podcast about none of the things that we were talking about.

Speaker 2 And today, actually, Jamie, I've got you back in the hot seat, back in the office, which is more of an ephemeral feeling than a physical space.

Speaker 2 Making me answer for my sins right off the jump. Yeah, by talking again about our friend Sam Bankman-Freed, who you and I chatted about right after his life collapsed last year.

Speaker 2 And I felt like we should do an update. I think we should too, because I'll be honest, I have done truly everything I can to avoid knowing more about him.

Speaker 2 So I would say I know basically nothing about him since we last spoke. Yeah, it's amazing because normally, you know, I'm an empathetic being.

Speaker 2 Like Sam has a face that I've just always wanted to hit from the first time I saw a picture of him. And normally when somebody goes through this much shit, when like their life is this ruined, right?

Speaker 2 Like I might, I feel a little less like hitting them because the world has hit them, but I still kind of want to sock him in the fucking jaw

Speaker 2 every time I see this guy.

Speaker 2 Um,

Speaker 2 let me just check it. Has his face

Speaker 2 changed? He wears suits sometimes now when he goes to court. He's not wearing the basketball shorts.
Helpful.

Speaker 2 Well, oh, that's true. God.
Yeah, that's like two different versions of an embarrassing, desperate way to present. Okay,

Speaker 2 he's wearing a suit now. Yeah, he's wearing a suit now.
It looks like shit, but whatever. Of course he is.

Speaker 2 I try not to judge people on how they look unless that's part of their con.

Speaker 2 And Sam is a guy for whom the dressing like a slob was always part of his

Speaker 2 like tech bro genius, you know, persona that he was putting on.

Speaker 2 Did we get fooled everybody? Did we get sure?

Speaker 2 Oh, yeah, yeah. There's good.
I believe there's a mug shot of him out at this point. Certainly when he went at the Bahamas.

Speaker 2 So when we last left our buddy Sam in November of 2022, he had been arrested in the Bahamas and extradited to the United States, where he was charged with so many financial crimes that he might theoretically spend more than 115 years in prison.

Speaker 2 Wow. Now, in the days and months since, a lot has happened and a lot more has come out about how the former crypto mogul behaved before and after his fall.

Speaker 2 I want to start with some of the latter information, because by far the most entertaining story to drop as a result of these seried legal filings against Sam is that he was using the non-profit arm of FTX to attempt to buy a sovereign nation he could use as an apocalypse shelter.

Speaker 2 That is by far the funniest story that's dropped about these guys in the days, months since.

Speaker 2 What was the plan there? Oh, that's a

Speaker 2 great

Speaker 2 question, Jamie. So let's talk about the island of Nauru.
It's an island in the southwest Pacific.

Speaker 2 I think it's about 2,100 miles away from the coast of Australia, which given the fact that Australia is really out in the middle of nowhere is pretty close to Australia.

Speaker 2 It is presently the world's smallest island nation. It's got a population of about 12,000 or so, not a ton of people.

Speaker 2 And as an incredibly tiny country, one of its primary assets is simply the fact that it is a sovereign nation. Because there's things that countries can do.

Speaker 2 that nothing else can do, like issue certain kinds like passports and visas and do certain kinds of things with banking, right?

Speaker 2 So if you're a really tiny country that doesn't have like a shitload of natural resources, one thing you can export is the benefits of your sovereignty to say really rich people who might want certain things that you can do as a country.

Speaker 2 Plan is coming together.

Speaker 2 So

Speaker 2 there's a number of ways in which NARU has kind of taken advantage of this to get by.

Speaker 2 One of them is that they've sort of sold access to their land to Australia to use so that Australia has used them for years as an offshore processing center for asylum seekers.

Speaker 2 I think this stopped most recently in 2019, but there's been a couple of waves of this, and it was not a pleasant place, right?

Speaker 2 Conditions were so brutal in sort of the offshore processing center on Nauru from 2012 to 2019 that several residents carried out like deadly forms of protests, sewing their own lips shut or lighting themselves on fire as a protest of the conditions they were facing.

Speaker 2 Pretty ugly scene.

Speaker 2 In the late 1990s, kind of prior to this period, Nauru was the chief money laundering location for the emerging Russian oligarch class.

Speaker 2 They helped a lot of these oligarch types you've heard about in the context of Putin launder about $70 billion in the ill-gotten funds during the early stages of the Russian Federation.

Speaker 2 I love a good bastard's cameo. Oh, yeah.
No, Naru.

Speaker 2 Naru's adjacent to a whole lot of shitty people. Great.
Yeah, here it's a lovely place.

Speaker 2 Naru was also designated a money laundering state by the U.S.

Speaker 2 Treasury in 2002, which led to sanctions, which I think is probably why they moved to like letting Australia offshore migrants there for a while.

Speaker 2 And since Australia stopped doing that in 2019, Sam Bankman-Fried and his fellow effective altruists felt like they might have had an opportunity there, right?

Speaker 2 Like Naru is kind of looking for some new cash flow. They're looking for a sovereign nation to do some things for.

Speaker 2 It's an opportunity to be effective. Yeah, yeah, to be effectively altruistic towards yourself.

Speaker 2 Specifically, Sam and his brother, Gabriel Bankman-Fried, is actually the guy sort of like organizing this attempted endeavor using FTX's charitable donations arm.

Speaker 2 And their goal was to purchase the entire island in order to construct what Gabe called a bunker shelter that would be used to, quote, ensure that most effective altruists survive in the event that between 50% and 99.99% of the world population perish in a catastrophe.

Speaker 2 Jesus. And that's like a pretty common, this, I feel like the gabe of the situation is a very common character in bat, like just the devious brother.

Speaker 2 I mean, I hate the bastard most of all, but I really detest the devious brother as well. There's just, it just reeks of insecurity.
Well, it's your own grift, man.

Speaker 2 Especially since they're framing it not as, look. You know, when you got like a guy like Peter Thial, right?

Speaker 2 And everybody knows Peter Thial's got like an evil rich guy bunker to wait out the end of the world if it happens. And like, fuck Peter Thiel.

Speaker 2 But at least that's Peter Thiel's not pretending I have a bunker to like save the world by putting aside just the best people he's like no I'm a giant piece of shit and I'm gonna save myself if things go wrong okay like fuck you Peter Thial but at least it's honest they're framing it as like blood bunker for just boys yeah it's me and my blood boys Jabe is like no we have to in the event there's an apocalypse we have to save all the EAs because they're the best people and that's what's best for the world that we'll do we're utilitarians right the greatest good for the greatest number of people is to save all of the best people, which is me and my friends, the other finance kids who call themselves effective altruists.

Speaker 2 So they don't have to feel bad for the fact that all they do is play the stock market like every other piece of shit. Anyway.
So lucky that they all met each other. So lucky that they're all friends.

Speaker 2 All the good people.

Speaker 2 I would love, I would love, honestly, like. Look, when the strike is over, somebody at a network, bring me on.

Speaker 2 I will write you a banger fucking script about an apocalypse where just the EA guys are left left in their bunker trying to figure out society.

Speaker 2 Okay.

Speaker 2 Another incentive to end the strike. That would fucking rip.
Yeah. Yeah.
We could do, we could do quite a tale. We could have some fun with this one, Jamie.

Speaker 2 And you know, I don't, I think that there would be some effective altruists

Speaker 2 like ridiculous enough to do cameos. Oh, I believe it.
We could get, we could get fucking William McCaskill in there, no problem. Bring his Scottish ass on board.
Yeah.

Speaker 2 Vain little perverts, each and every one of them.

Speaker 2 And

Speaker 2 they're all, I'm going to be honest, kind of stupid. So I bet we could trick him.
Like, you don't have journalistic ethics with an HBO show.

Speaker 2 Yeah, we could just say we're bringing them on for an interview. We could like film around them.
Like in, what was that fucking movie

Speaker 2 with

Speaker 2 Steve Martin where they

Speaker 2 have to film a fake movie around, what is it, Chris Rock? Shit.

Speaker 2 Oh, it's the, it's, um, um, um, um, um, oh,

Speaker 2 see, now you're, now, now, now it's, I know, it's driving me nuts. We have to figure this out.
Uh, I re-watched it recently. It holds up.
It does hold up. It's like one of the best movies.
Bowfinger.

Speaker 2 Fucking dope.

Speaker 2 We could do a Bofinger with William McCaskill, where he thinks he's getting interviewed for a documentary, and we're really making him the bad guy of our HBO series.

Speaker 2 Bring in Steve Martin, too. Fuck it.
He's still, he's still got it. Yeah, he's got good politics.
He'd be great. Yeah.

Speaker 2 Glad we remembered it. Watch Bofinger, guys.
It holds up. Truly.
If you take anything away from today, it really does. I was shocked at how well it helped.
Yeah, startlingly good movie.

Speaker 2 Pretty good, like Scientology joke.

Speaker 2 So Gabriel Bankman-Fried ran FTX's charitable donations wing, which included a ton of money for what many people have characterized as political bribes.

Speaker 2 I'm not saying that he was bribing politicians for FTX. I'm saying that's what a lot of people have characterized what he was doing as.

Speaker 2 Now, that much has been known for a while, but it was not until the current management of what remains of FTX sued Sam.

Speaker 2 Because again, there's new management that's trying to recover as much money as possible. And they're throwing Sam under the bus because why wouldn't they?

Speaker 2 And that's how all this stuff got revealed because they have all of FTX's internal communications. So they found a bunch of shit, like that Sam was having Gabriel try to buy the island of Nauru.

Speaker 2 Now, it is unclear how serious their attempt to buy this island was. A representative of the island's government has been like, no, no, no, we were never putting our island for sale.

Speaker 2 This was never a thing that was going to happen.

Speaker 2 And maybe that is the case. Maybe they were just being idiots fucking around.

Speaker 2 But in a memo between Gabriel and an FTX officer, the discussion was centered around the idea of buying the island, of being in control of it as a sovereign country, not just purchasing land.

Speaker 2 I mean, that's a lot of work for a bit. Not that I put it past him, but I'm just like, it's not sounding like it.
Yeah. No, and I think I don't put it past.

Speaker 2 It's possible that Naru, whatever is telling the, whatever government official is telling the truth, they were never considering selling the island, but it's also possible that Gabe et al.

Speaker 2 believed they could buy the island, right? Right.

Speaker 2 They may in fact be that dumb. Yeah.
Yeah. Yeah.
Now, there were discussions between these FTX guys about using Naru as a base for human genetic experimentation.

Speaker 2 You get the feeling that their goal was to create modified post-human godlike bodies for their fellow effective altruists so that they could live forever and dominate mankind after the collapse as undying immortals.

Speaker 2 That just sent the ugliest photoshopped image. Like, it was involuntary how quickly the like

Speaker 2 no-neck, huge chest

Speaker 2 Photoshop super soldier

Speaker 2 just came to mind. Absolutely.
Hey, okay.

Speaker 2 It sounds like a mix between

Speaker 2 that one video game with the big robot dinosaurs and

Speaker 2 those sci-fi books by that guy who wound up being real anti-Muslim.

Speaker 2 But yeah. Oh,

Speaker 2 there could be a lot of guys. I wonder which guy.
Oh, it's, I think, Ilium and Olympos.

Speaker 2 Okay.

Speaker 2 I forget the name of the author, but the premise of the book is that like in the future, a bunch of rich guys turn themselves into gods and decide to like recreate the Trojan War with themselves as the Greek gods.

Speaker 2 And they like resurrect a bunch of dead archaeologists to make sure that they get the details right. It's, it's fun.
It's, it's, it's quite a series, except for the weird moments of bigotry. Um, oh,

Speaker 2 that'll happen. Good stuff.
Dan Simmons, I think, is the author. Anyway,

Speaker 2 so yeah, they're talking about we want to create a human genetic experimentation base.

Speaker 2 And they're like, we want to figure out what the sensible regulations around human genetic enhancement are, but we also want to build a lab.

Speaker 2 And while they're talking about this, Gabriel adds cryptically, probably there are other things that's useful to do with a sovereign country. I don't know what he means by that, but yeah, probably.

Speaker 2 So that could be as banal as just like money laundering, which Nauru obviously has quite a history of, or issuing things like passports.

Speaker 2 But given the fact that all these dummies are permanently poisoned by a mixture of sci-fi fandoms and weird futurist cults, I think it's safe to say we all dodged a bullet by the fact that they never got too far in this scheme.

Speaker 2 Now,

Speaker 2 my favorite thing about this whole idea is how dumb it is on its face. There are some countries that could act as really good apocalypse shelters for the super rich, right? Switzerland is one.

Speaker 2 A lot of rich people have their apocalyps shelters in Switzerland. New Zealand is another.
But the problem for that is that like Switzerland and New Zealand are both functional states.

Speaker 2 Obviously, if you're a billionaire there, you can have some outsized influence, but you're not just going to run everything because there's other interests and like a functional system of government in place in all of those places.

Speaker 2 I think Sam and them were hoping that since Naru's small enough, they could just utterly dominate the government.

Speaker 2 But they ignored the fact that it's like one of the worst places imaginable to have an as an apocalypse shelter.

Speaker 2 For one thing, the island does not grow much food, which means it has to import 90% of what it needs to sustain its very small population.

Speaker 2 It's all good. We have so much money.

Speaker 2 It's okay. We'll just keep importing it.
Yeah.

Speaker 2 It also has very little freshwater, and most of its infrastructure is on the coast and vulnerable to both rising sea levels and hurricanes.

Speaker 2 It is very close to the bottom of places that you would want to have as a shelter.

Speaker 2 So very funny. All these people are silly.
Now,

Speaker 2 Jamie, the main reason current FTX is revealing all this is that they are suing the old management of the country, a company, i.e.

Speaker 2 Sam, to try and reclaim a billion or so dollars they argue was funneled illegally into nonsense like this and into the pockets of Bankman Fried and his lieutenants in the months before FTX collapsed due to insolvency.

Speaker 2 The lawsuit against Sam also includes some more confounding lines, described in this paragraph from an article on the suit by crypto news site Decrypt.

Speaker 2 The lawsuit further says that the projects run by the FTX Foundation were frequently misguided and sometimes dystopian.

Speaker 2 These included a $300,000 grant to an individual to write a book about how to figure out what humans' utility function are, as well as a $400,000 grant to an entity that posted YouTube videos related to rationalist and effective altruism material, including videos on grabby aliens.

Speaker 2 Now,

Speaker 2 does that all seem like nonsense to you, Jamie?

Speaker 2 I don't know, Robert. Let's hear them out about the grabby aliens.
Don't worry. I'm going to explain all of this horseshit to you.

Speaker 2 Oh my God, what kind of rick and morty ass nonsense?

Speaker 2 It is some rick and morty ass nonsense. It's much dumber than anything in rick and morty, because at least some of the people there story structure.

Speaker 2 And at least understand that it's a joke. That it's a bit, yes.

Speaker 2 So if you aren't terminally adhered to one of the stupidest subcultures in the broader tech sphere, that probably does seem like nonsense. And it is.

Speaker 2 But let's start with the bit about paying someone 300 grand to write about what a human's utility function is. Now, what is a utility function? Great question.

Speaker 2 In economics, a utility function is the measure of welfare or satisfaction of a consumer as a function of the consumption of real goods, like food.

Speaker 2 In simple terms, it's a way of describing the satisfaction or other benefits gained by consuming a specific resource.

Speaker 2 This is important to rational choice theory, which is a theory that states that individuals use rational calculations to make rational choices to achieve outcomes aligned with their own objectives.

Speaker 2 Now, Most people who aren't economists think that talking about the economy this way is silly because people are not, in fact, rational actors.

Speaker 2 And in fact, we make shitty decisions decisions all the time guided by misinformation or pressure that causes us to inaccurately interpret the potential value of something like a college education versus the cost of, say, student loans, right?

Speaker 2 One could argue that Sam Bankman Freed and co. are a great example of a wonderful example of the irrationality.

Speaker 2 But

Speaker 2 that's economics. This is not an economics podcast.
I'm not an economist.

Speaker 2 And the way that Bankman Freed and his fellow EAs talk about utility functions is not the same as how economists talk about it, right?

Speaker 2 So when economists are talking about this, it's part of how to kind of figure out why people might make rational choices by understanding like the value of sort of their, the ranked like preference they give to certain things that they might expend resources on, broadly speaking.

Speaker 2 When Bankman-Fried and EAs talk about utility functions, what they mean is something even more abstract. And I'm going to...

Speaker 2 quote from a summary from a write-up on effectivealtruism.org, a website you should avoid at all costs.

Speaker 2 Quote, I'm really not looking looking forward to finding out how this somehow relates to the grabby aliens. Okay, sorry.
Yeah.

Speaker 2 In a very dumb way, Jamie. Quote.
Okay, good. EAs and rationalists love dropping the term in every conversation.

Speaker 2 Using the term utility function can be immensely helpful when aiming to maximize positive impact or do the most good.

Speaker 2 The concept of a utility function provides a systematic way to quantify and compare the potential benefits of different actions, thus helping to guide decision-making toward the most effective outcomes.

Speaker 2 By representing values, goals, or beneficial outcomes numerically, utility functions allow for a structured comparison and prioritization of actions.

Speaker 2 If, for example, your goal is to alleviate global suffering, you could assign values to different charitable actions based on their estimated impact, thus creating a utility function.

Speaker 2 This function can then guide you to allocate your resources like time or money where they will generate the greatest utility or good.

Speaker 2 Now, that just seems like you're saying you should try to figure out how your money is going to be spent best, right, before you spend it. But that's not actually what they're saying.

Speaker 2 What they are doing here is they are, they are saying like a utility function in this context is a way of assigning a number that you have made up. There is no objective value to this number.

Speaker 2 There's no rigor to this. You are making up a number to

Speaker 2 like determine the value of spending your money in certain ways.

Speaker 2 And you are doing this so that whatever it is you want to do with your money, you can justify numerically as the scientifically best way to spend your money. So I see.

Speaker 2 And you can, you could argue in this way by assigning these values in whatever wonky way you want.

Speaker 2 No, me paying taxes to fund roads and the healthcare system is a shitty use of my money because it doesn't optimize this thing that I consider to be of higher long-term value.

Speaker 2 And the thing that's of higher long-term value to me is spending money on fucking space travel research so that I can be a demigod on Mars, right? That's best for human beings in the long term.

Speaker 2 So in utilitarian speak, you know, the greatest good for the greatest number of people is us getting to Mars as opposed to feeding starving people right now.

Speaker 2 You know, the utility function of getting to Mars is much higher. So that's where my money ought to go.
Well, it's all, yeah, it just like comes down to like the great, the greatest good is me

Speaker 2 smiling a little bit. Yeah, exactly.

Speaker 2 There's literally some writing on that, in that vein.

Speaker 2 So it is through math like this that EAs are able to look at at a world where millions face death by famine or disease or rising sea levels and say, the best way to help the planet is for us to become finance bros and then spend our money investing in ai companies or whatever the fundamental selfishness of this whole community is made clear when you read the essays these people write on their websites like less wrong a blog founded by self-declared ai ex yeah eliza yudkowski yudkowski is a rationalist which is a related subculture to the eas there's a lot of bleed over Sam and a lot of his people were rationalists irrationalists adjacent.

Speaker 2 And

Speaker 2 yeah, to give you an idea of how these people talk about utility functions, I'm going to read an excerpt from an article on this website titled, Your Utility Function is Your Utility Function by David Udell.

Speaker 2 I've been thinking a lot lately about exactly how altruistic I am. The truth is that I'm not sure.

Speaker 2 I care a lot about not dying and about my girlfriend and family and friends not dying and about all of humanity not dying and about all life on this planet not dying too.

Speaker 2 And I care about the glorious transhuman future and all that. and the 10 to the 50th power or whatever possible possible good future lives hanging in the balance.

Speaker 2 And I care care about some of these things disproportionately to their apparent moral magnitude but what i care about is what i care about rationality is the art of getting more of what you want whatever that is of systematized winning by your own lights you will totally fail in that art if you bulldoze your values in a desperate effort to fit in or to be a good person or to or in the mod in the way your model of society seems to ask you to so you see what he's He's saying, if you read between the lines there, what the most rational thing for me to do is whatever makes me feel best.

Speaker 2 Whatever gives me a little smile. Don't let people shame you for spending your resources, you know, entirely on yourself and your own whims.
Like, you're actually a hero if you do that.

Speaker 2 It is, it is so fascinating to me to watch, like,

Speaker 2 I don't know. It seems like this self-conscious reflex where they feel the need to

Speaker 2 define

Speaker 2 rational by something that is more closely

Speaker 2 aligned with reality, and then immediately be like, but what that actually means is yeah exact opposite

Speaker 2 the core of it is always being able to say that like well if you suggest that number one i have a responsibility to other people and that that responsibility is to some extent out of my hands which is what we all say when we're in a society right i don't have kids I don't have a choice not to spend some of the significant amount of money I pay in taxes educating other people's kids.

Speaker 2 Now, I'm not a complete piece of shit, so I'm fine with that because like I've, I've done very well for myself and kids need educations. That's just a nice way for the world to work.

Speaker 2 But these people are more of the feeling that like, no, I should do whatever is possible to avoid paying for, you know, a public school system.

Speaker 2 And in fact, I'm often going to advocate for some sort of like weird voucher-based system that allows me to not fund public schools.

Speaker 2 Because the greatest good for the greatest number of people is for me to ensure that like me and my rich kid friends all get to send our kids to special schools where like, what, you know, fuck anybody else.

Speaker 2 Like I don't have any other responsibility for the broader population. All that actually matters is like me maximizing, you know, my own personal happiness.

Speaker 2 But I still want to feel like I'm a hero for doing it, right? If I avoid paying taxes in order to like spend all of my money investing in open AI so that I can like take people's jobs away.

Speaker 2 Like I want to feel like a hero for doing that because what I'm arguing is that it's best for, you know, the people 500 years from now and there's going to be more of them than there are today so i'm a hero for like getting rich off of this company today you know yes well because there's first of all there's definitely going to be people in 500 years

Speaker 2 sure for sure definitely guarantee

Speaker 2 if these eas get their way sure yeah yeah yeah if if we are doing the most good there

Speaker 2 that that's so fucking exhausting i mean it does like your peter teal example not that you know doing evil is good in any capacity, but the most exhausting kind of evil is the one that also insists on you validating that it's not actually evil.

Speaker 2 That it

Speaker 2 deserves to be. Shut the fuck up and ruin my life or don't.
It's the same thing with a lot of these fucking right-wing media grifters where like, it's not enough for them to be rich.

Speaker 2 It's not enough for them to like get their way politically.

Speaker 2 They feel like they have like an ethical, they're owed, like being cool and respected. And it's the same thing with like these people are all finance ghouls.

Speaker 2 They are all like actively fighting to avoid paying taxes and to be able to concentrate ever more power in an ever smaller number of people to destroy the lives of, you know, artists and people who are like working folks in order to like make more short-term profits.

Speaker 2 This is all what they actually care about personally.

Speaker 2 But they want to feel like Gandhi while they do it. Right.

Speaker 2 Because what they're doing is guaranteeing what they'll argue, Jamie, is that like, well, you know, this may hurt this company, you know, me getting involved in this company.

Speaker 2 Sure, we may destroy a lot of jobs in the short term. But by doing so, we'll be able to make sure that the AI we build that eventually becomes our God

Speaker 2 is one that cares about the future of humanity. And that's better for the most people in the long run.

Speaker 2 Yes, and history should remember me as the greatest man to ever live. And people will, you know, that'll be on television someday when my computer is writing every television show.

Speaker 2 I fucking hate these people. So,

Speaker 2 yeah, it's cool stuff.

Speaker 2 And I think the the fundamental selfishness of these people, because all that effective altruism and rationalism are really about is by is creating a made-up system of numbers to justify you pursuing your own benefit as like science, right?

Speaker 2 As like scientifically rational. This is really

Speaker 2 it's not as if that doesn't, you know, like math problems to serve a very small group's self-interest. It's not as if that

Speaker 2 doesn't exist outside of this circle, but it's just like bizarre how uniquely like

Speaker 2 they lack any sort of self-awareness or

Speaker 2 I don't know. It's just, they're so fucking annoying is what I'm trying to say.
That's very true, Jamie. And

Speaker 2 this is all really clear when you look at how the movement, the EA movement, treated Sam Bankman Freed before and after his fall from grace.

Speaker 2 If effective altruism can be said to have a pope, and it can, because all of these Silicon Valley philosophical movements are just Kirkland brand Catholicism.

Speaker 2 That pope is Will McCaskill, an Oxford moral philosopher and co-founder for the Center for Effective Altruism. When FTX collapsed and Sam got arrested, he was quick to put out a statement of outrage.

Speaker 2 I don't know which emotion is stronger, my other rage at Sam and others for causing such harm to so many people, or my sadness and self-hatred for falling for this deception.

Speaker 2 Now, the only reason I would hesitate to call this horseshit, Jamie, is that horseshit, by virtue of being an animate waste, possesses a fundamental honesty that McCaskill is incapable of. He and SBF.

Speaker 2 Yeah, fuck. Yeah.
Robert, that's the bitchiest thing I've heard you say in a while. That's awesome.
Thank you. He and SBF met back at MIT when Sam was an undergrad.

Speaker 2 McCaskill convinced him that he could maximize his impact in humanitarian causes by earning to give, you know, making as much money as possible so that he can give it away in a way that presumably will help the world.

Speaker 2 Now, when Sam ultimately launched Alameda Research, it was an EA project from the start, staffed by Sam's friends in the community.

Speaker 2 One software engineer told Time, almost everyone who came on in those early days was an EA. They were there for EA reasons, says Naya Buscal, a former software engineer at Alameda.

Speaker 2 That was the pitch we gave people. This is an EA thing.

Speaker 2 I know. I'm once again thinking about sports video games, and I know it's not sports video games.
It is. It is basically a sports video game.
I just had the flashback to the

Speaker 2 interview you did.

Speaker 2 I was thinking, okay,

Speaker 2 it's true. It's true.
In the early days, Sam's pitch was that 50% of the company profits would be donated to EA causes.

Speaker 2 And the initial round of investing that got the company off the ground was funded entirely by rich EA types.

Speaker 2 Publicly, McCaskill asked about, talked about Sam like he was the EA messiah, probably because FTX's future fund provided a huge amount of support for his movement.

Speaker 2 And just nine months in 2022, the future fund, run by Nick Beckstead, a moral philosopher who used FTX money to support various causes, gave more than $160 million in other people's money funneled through FTX to effective altruism, including $33 million to organizations that McCaskill had a direct interest in.

Speaker 2 So that's why McCaskill spoke so positively about Sam, which is, it's made even more fucked up when you realize that like Other people in the EA movement had started warning McCaskill about Sam Bankman-Fried and about him being a con man as early as 2018.

Speaker 2 And I'm going to quote again from Time. This is about from like the very start of Alameda research.

Speaker 2 Within months, the good karma of the venture dissipated in a series of internal clashes, many details of which have not been previously reported. Some of the issues were personal.

Speaker 2 Bankman Fried could be dictatorial, according to one former colleague. Three former Alameda employees told Time he had inappropriate romantic relationships with his subordinates.

Speaker 2 Early Alameda executives also believed he had reneged on an equity arrangement that would have left Bankman Fried with 40% control of the firm, according to a document reviewed by Time.

Speaker 2 Instead, according to two people with knowledge of the situation, he had registered himself as sole owner of Alameda.

Speaker 2 So basically, Sam has unethically taken control of the firm and all of the money invested in it, and he is like fucking his subordinates.

Speaker 2 And he's also a sex pest. He's also a sex pest.
He's a most surprising thing that I've ever heard in my entire life. Taking

Speaker 2 money from people's, what are effectively bank accounts and FTX, and he's using it to prop up the value of different different crypto tokens on Alameda to make shit look like it, which is money laundering, right?

Speaker 2 That's all, it's like theft and money, it's fraud, you know? Um, or is it the future, Robert? Remember that horror? I mean,

Speaker 2 yeah, remember what Larry David taught us all.

Speaker 2 I know there were some really unforgivable.

Speaker 2 It's pretty funny. It is of all, it is like I am on team.

Speaker 2 Like, I can't be angry at Larry David because honestly, if Larry David advertises a financial product and you decide he seems like a good guy to

Speaker 2 advise

Speaker 2 this seems like a credible company to me. I don't know.
That's a little bit on you, right? That's a little bit on you. Who else was in that commercial?

Speaker 2 There was that was a that was a damning commercial.

Speaker 2 Yeah, it is. It is.
I still say arrest Larry David, but that's for a variety of reasons.

Speaker 2 So I'm curious what your other reasons are, but that's for another day. Yeah, that's for a different day.

Speaker 2 So this caused, so again, all of this shit, that is why this is like everything that the, it was obvious in Alameda in 2018.

Speaker 2 This is all the stuff that he gets arrested for in 2022.

Speaker 2 And when they become aware of this, of the fact that he's fucking his subordinates and money laundering, a bunch of EA people start raising alarm bells.

Speaker 2 In 2018, several Alameda executives try to force him out of the company and accuse him of gross negligence.

Speaker 2 Sam wins the power struggle, though. And so most of the EA management team and half of the company resign.

Speaker 2 Now, this might be, you could see this as like, well, maybe those effective altruist types were just in it for the altruism. And once they saw Sam was shady, they packed up.

Speaker 2 And that's true for those individual people. You know, there's some decent people who just got caught up in the movement, and they clearly had some degree of moral integrity.

Speaker 2 But the broader effective altruism movement is

Speaker 2 incredibly low there.

Speaker 2 Including

Speaker 2 Will McCaskill, it's Pope, never disaffiliated from Sam. McCaskill was saying, talking about Sam, like the second fucking coming up until late 2022.

Speaker 2 And in exchange for laundering Sam's reputation, Sam sent tens of millions of dollars, 160 million, to EA causes in 2022 alone. And that's why McCaskill maintained movement ties with Bankman-Fried.

Speaker 2 Quote, In the weeks leading up to that April 2018 confrontation with Bankman-Fried and in the months that followed, Macaulay and others, who was one of the executives that left, warned McCaskill, Bexted, and Karnofsky about her co-founder's alleged duplicity and unscrupulous business ethics, according to four people with knowledge of those discussions.

Speaker 2 Buscal recalled speaking to Macaulay immediately after one of Macaulay's conversations with McCaskill in late 2018.

Speaker 2 Will basically took Sam's side, said Buscal, who recalls waiting with Macaulay in the Stockholm airport while she was on the phone. Will basically threatened her, Buscal recalls.

Speaker 2 I remember my impression being that Will was taking a pretty hostile stance here, and he was just believing Sam's side of the story, which made no sense to me.

Speaker 2 So, Will, again, perfectly willing to like throw down against, you know, the more honest people in his movement and personally threaten them in order to keep the money flowing to his fancy cause that he can, he can.

Speaker 2 Right. And then the second that it becomes, you know, PR inconvenient to keep the associate.
There should be some, maybe there is like a term.

Speaker 2 for that of just like even the cadence of what you read earlier of just like the disingenuousness of like oh i had no idea like you're like okay no you knew damn well what was going on and you knew that that's you were willing to continue pretending he was a good guy and aligned with your movement as long as the money kept flowing.

Speaker 2 Right. It no, yeah, no, it no longer serves your best interests to stand by him.
So yeah. So yeah, now you'll yeah, anyway.

Speaker 2 So

Speaker 2 Sam, we don't actually know if he's completely bankrupt. We know he took about a billion in payments and loans from FTX.

Speaker 2 He claims not to really have any of that money and that he's he's working on getting what assets he does have to like get, try to make a few more of the investors that they had whole.

Speaker 2 That said, we know that a big chunk of the money that he made was funneled into real estate in his parents' names.

Speaker 2 So that's fun.

Speaker 2 Speaking of his parents, one of the big early mysteries of his case was that when he gets out on $250 million bond, his parents are signed on to the bail agreement with their house as collateral.

Speaker 2 But there were also two mystery co-signers. And their house, we'll be talking about this in a second, is on the Stanford campus.

Speaker 2 The two mystery co-signers were Larry Kramer, a family friend and the former dean of Stanford, and Andreas Popke, who signed a $200,000 bond.

Speaker 2 Popke is a senior research scientist at Stanford and an advisor to several Valley startups.

Speaker 2 So Stanford is very invested, primarily because of who Sam's parents are in this case, which is interesting to me. And

Speaker 2 that is my, outside of his parents i guess

Speaker 2 realistically what is in it for them by taking that risk i think it's actually just that these people are close with his parents who are professors at stanford and deeply tied into that community um i can i mean i can very much see like bougie bougie parents with influence being like sam's just a boy anyone could have made this mistake he thought he was doing the right thing he got mixed in with the wrong

Speaker 2 this has to just be

Speaker 2 like some sort of crazy mistake because they can't imagine he just, it's so dumb and blatant. Like all he did was rob people in order to like gamble, right?

Speaker 2 Like fundamentally, there's not a difference between like him taking people's money, claiming that he's like got a sure stock tip and then gambling it in Vegas.

Speaker 2 Like legally, there's no difference between that and what he did.

Speaker 2 But they can't, because his parents are like ethicists, basically, at Stanford. And I don't think any of the people they are social with can imagine that his crimes were that venal and foolish.

Speaker 2 But you know whose crimes are not venal and foolish, Jamie.

Speaker 2 Oh, tell me, Robert.

Speaker 2 The products and services that support our podcasts.

Speaker 2 I never encountered a product I didn't love. No, that's uh, that's exactly right.
That's exactly right.

Speaker 2 And

Speaker 2 we are

Speaker 2 back.

Speaker 2 So initially, the reason why these other Stanford people are secret signers on to this bail agreement is because they were afraid that they would be attacked because of how angry people are at Sam.

Speaker 2 And there was a reason for this. Shortly after he was sent to house arrest at his parents' home, someone drove their car into a barricade set up outside of their house on the Stanford campus.

Speaker 2 Now, as I stated earlier, both the elder Bankman Freeds are former Stanford professors, and their home is on campus, which has created issues for the school.

Speaker 2 The university still will not officially acknowledge that one of the world's most famous accused felons currently resides in their prestigious walled academic garden. One Washington

Speaker 2 Stanford, like, really

Speaker 2 fumbles shit constantly. Oh, yeah.
Yeah. Like, it's absurd.
It's because they're not really that smart.

Speaker 2 Well, yes, this is, again, another great case for it. It's also like, I don't know, just the arguing, like, well, his parents are like ethicists.
How could he be fucked up?

Speaker 2 It's like, have you ever met someone raised by a therapist? No offense, but like... One of the most fucked up people of the world.
The most fucked up people are

Speaker 2 not trying to call out any of the lovely, but like they know. They know.
They have the language. Yeah.
Yeah. So one Washington Post article I found noted.

Speaker 2 Stanford Law School didn't respond to requests for comment.

Speaker 2 When asked whether they could confirm a rumor that nearby student co-op had attacked the bankman-freed home with eggs, Stanford campus police did not respond.

Speaker 2 Socially, however, Bankman Freed is a source of deep fascination. There are party flyers with his likeness.
He's a punchline in campus comedy sketches. Students ride their bikes by on dates.

Speaker 2 The campus community is well aware he's there. An annotated map locating the Bankman Freed home was posted on a student-only social network.

Speaker 2 Okay, I be honest, if someone asked you out and they're like, here's my concept for a first date, we're going to go watch

Speaker 2 Samuel Banquin Freak be on her.

Speaker 2 We're getting married that night, Jamie. Right.
I was like,

Speaker 2 we're going, like, bring a flask, watch one of history's stupidest villains,

Speaker 2 and then go finger each other at a parking lot. Absolutely, Jamie.
That's that's the dream. That's the dream.
It's true. None of this.
That's effective altruism right there.

Speaker 2 That's the greatest good for the greatest number of people. Sam could stand to learn a thing or two from these

Speaker 2 theoretical Stanford students.

Speaker 2 Yes.

Speaker 2 So

Speaker 2 if you've, so again, Sam's parents are both well-respected teachers and experts in different fields of ethics.

Speaker 2 Both were recruited to the university in the 1980s and they almost immediately hooked up. Barbara Freed made a name for herself as a, she's like a philosopher, basically.

Speaker 2 Her big thing was she wrote a paper dissecting the ethics of the trolley problem. Whereas Joe Bankman is a finance ethics guy.

Speaker 2 He writes a lot about like, again, like not breaking the law with finance shit. It seems to be a big focus of his.

Speaker 2 This is a very obvious thing to say, but I do,

Speaker 2 in defense of the Bankman family, I do appreciate when someone really rolls with their last name. I think that that is a very fun quality.

Speaker 2 This is an example of it not working out. I think it's also equally bizarre when someone has a last name where you're like, why are you not doing that job? For example,

Speaker 2 maybe I've told you this before. It's one of my favorite facts I've learned in my life.

Speaker 2 My childhood dentist's name was Dr. Vigenis.

Speaker 2 And he...

Speaker 2 Great. Nevertheless, he persisted in going into teeth for some reason.
And I found it infuriating. I'm like, just roll with it, man.
That's your last name.

Speaker 2 An ethics board needs to go after this guy. No, I'm sorry.
I know you don't know how to do this job, but that's your life now. People will trust you until you figure it out.
I do

Speaker 2 the labia doctor. Speaking of nominative determinism, Joe Bankman would be it.
I wouldn't trust Joe Bankman as a drug dealer, but

Speaker 2 I would trust Johnny Cocaine as a financial expert.

Speaker 2 Like as a stockbroker. Johnny Cocaine, yeah, let him invest my money.
He knows what he's doing.

Speaker 2 I just, you know, say what you will about Joe Bankman, and I'm sure you should. I know nothing about this man, but at least he got into the right business.
Yeah, he does. He does.
Now,

Speaker 2 people talk with like awe about this guy. Like, he's so ethical.
He's such like a decent man. He thinks so much about doing the right thing.

Speaker 2 When the Washington Post is like giving examples of noteworthy things in his past, one of the ones they're going to talk about Ted Lasso.

Speaker 2 In 2002, he wrote a tongue-in-cheek suggestion on how to avoid a major league baseball strike.

Speaker 2 And his solution in this paper that's supposed to be a joke was to levy taxes on teams and players who struck that could only be avoided if the players donated money to charity or the teams agreed to sell nickel hot dogs to Giants fans.

Speaker 2 Now, I don't know what the joke is here, but it apparently tore it up among upper-middle-class Ivy League finance academics. They all talk about this as very funny.

Speaker 2 Wait, it comes up again as like, remember when he said hot dogs? It was in the Washington Post article about this guy as like, look at a, look at this.

Speaker 2 This is is like a noteworthy moment from his career, this like bad joke that he made. But I guess that's what fucking Stanford people find funny.
Imagine it's hilarious that Stanford.

Speaker 2 Yeah, I don't get it. Jesus Christ.
Maybe Stanford people were just like, think it's hilarious. Just like the word hot dog.
They're like, oh, poor people food.

Speaker 2 Like, I don't know. Now.
Everything you find about these people is like, wow, it taught like is their friends talking about like, it's so shocking that this could happen.

Speaker 2 You know, these were like the best people we knew they were so concerned about ethics they raised their sons like little adults and they were always talking about utilitarianism how could this have gone wrong i don't know i feel when i read anecdotes about them like it's pretty obvious why it went wrong and to kind of make that point jamie here's a quote from an excellent write-up by puck news quote Bankman, who once boasted to a friend that his father had dutifully recorded every cash receipt, wrote three case books on tax shelters and tax evasion, becoming one of the country's leading experts on the subject.

Speaker 2 One of Bankman's law students in those early years was Peter Thiel, who later told Bankman that his tax law class was his most valuable because he was able to put a lot of his Facebook stock in an IRA, as Bankman would later recall in a podcast.

Speaker 2 This modest feat of financial engineering would save Pete more than a billion dollars. So, ethics, Jamie! Avoiding a billion dollars in taxes so that Peter Thiel can spend it

Speaker 2 giving Joe Swastika money to write New York Times columns on racism. Hooray! I love ethics.

Speaker 2 Holy shit. Yeah, and I, and here I was, a clown, a fool, about to be like, well, everyone wants to rebel against their parents.
That's probably why he's a cartoon villain.

Speaker 2 When he talks ethics, it's not getting busted for being a piece of shit with money. That's what it seems like to me.
Not an expert on ethics. Am an expert on being a piece of shit, though.
So, yeah.

Speaker 2 But you're a far different piece of shit. Thank you, Jamie.
Thank you. And I celebrate that about you.

Speaker 2 That is, but I mean, I'm not, I guess, shocked that that is exceedingly ethical to the Stanford crowd, but

Speaker 2 wow, damning.

Speaker 2 So, anyway, Barbara Freed, being a good liberal, was horrified by the Trump election and chose to fight back by founding a political fundraising group, Mind the Gap.

Speaker 2 which was extremely successful during the Trump years and is rumored to have acted as the model for FTX's own political donation machine.

Speaker 2 Both of Sam's parents have seen their reputation suffer with his arrest, and I'm going to continue with a quote from Puck.

Speaker 2 Official property records show that Joe Bankman and Barbara Freed were the named owners of a $16.4 million beachside vacation home in Old Fort Bay, part of a broader real estate portfolio owned by FTX and senior executives, totaling hundreds of millions of dollars.

Speaker 2 They may have stayed there while working with a company sometime over the last year, Sam said, though he denied knowing any details about the $300 million worth of real estate that FTX and his parents bought in the Bahamas.

Speaker 2 Oh, okay, so they know about absolutely everything in the world. Oh,

Speaker 2 yeah, it sounds like it. Sounds like it.
Now, Joe and Barbara have said that they've been working to return the property to the company for some time. Working to.

Speaker 2 Joe Bankman, in particular, has hardly been a passive observer in his son's scandal and may now be exposed to some legal risk himself.

Speaker 2 Bankman interviewed and hired the first lawyers for Alameda Research back in 2017 and effectively served as FTX's first attorney.

Speaker 2 He handled the inbound that came and made the resulting introduction that helped FTX raise $130 million from his former law student, private equity mogul Orlando Bravo, spent his free time on FTX's charitable and regulatory efforts, and was ultimately in the room before Sam made the fateful decision to sign the documents that declared Chapter 11.

Speaker 2 So they seem very involved and shady themselves. I don't buy, oh, they're so innocent.
Their son just broke, you know, made a mistake or whatever.

Speaker 2 They're all, they all just didn't think that this was criminal because the people's money they were taking were poor and they're fucking Stanford brats. Like,

Speaker 2 I have no respect for them. I hope they lose their fancy Stanford house.
They hurt a lot of people.

Speaker 2 Yeah. Particularly because, I mean, it sounds like this was their MO from the start, anyways.
So, why would we now think that they would be above this behavior? If they're like, oh, no, here's a way.

Speaker 2 Like, I don't know.

Speaker 2 It seems like their definition of ethics is things you can technically get away with. Yeah.

Speaker 2 It's not illegal for Peter Thiel to get this billion dollars that he doesn't pay taxes on because, you know, fuckery. Anyway, Mr.
Bankman and Mrs.

Speaker 2 Freed have joined now the expanding cast of disgraced Stanford affiliates.

Speaker 2 This includes recently university president Mark Tessier Levine, currently accused of manipulating images on research papers in a way that is equivalent to falsifying lab data for Alzheimer's research.

Speaker 2 Obviously, there's also Bastards Pod alumni, the Theranos lady, another famous Stanford disgrace. And then there's the fact that their alumni can...

Speaker 2 My favorite Stanford disgrace. Yeah.
And then there's all their alumni who have created companies or helped run them that have shattered the foundations of our democracy in pursuit of a quick buck.

Speaker 2 Stanford's current reputation is so grimy that a Washington Post article on SBF's associations with the school ends with these lines. And this is very funny, Jamie.

Speaker 2 Adrian Dobb, a Stanford professor of comparative literature and German studies and the author of What Tech Calls Thinking, sees an encouraging sign in Stanford being only peripherally involved in the Bankman-Fried scandal.

Speaker 2 That might not have been the case 10 years ago, he notes, when the Silicon Valley hype machine operated at more of a fever pitch than it does today.

Speaker 2 Other than his physical location, it's actually not that connected to us for once, Dobb said. And that way, it's a sign of progress and also a little bit melancholy.

Speaker 2 Stanford was a place where the future was shaped, so it's quite possible that's not happening anymore, that it's happening in the Bahamas now and only comes to Palo Alto once it gets indicted.

Speaker 2 That's so funny.

Speaker 2 I'm hung up on other than its physical location. Yeah, other than the fact that he's here, he's not very involved.
That's a big one, babe. That's a big one.
That does seem significant to me.

Speaker 2 No, if they're happy, I'm happy. That's great.
It's funny. Yeah, we have to return to

Speaker 2 Elizabeth Holmes at some point because I'm very uniquely interested in her rebranding as Liz.

Speaker 2 Yeah.

Speaker 2 Genius. The Liz.
Because now I've forgotten her horrible crimes. Yeah.
I forgot about all of her crimes once she had a cool and relatable name and had cool and relatable babies.

Speaker 2 Or she moved and escaped. She scammed Henry Kissinger.
And then started going by Alan.

Speaker 2 That's true. We can't take away that she scammed Henry Kissinger.
Yeah, we can't. She scammed people out of her lives, but, you know.
Yeah. But the Henry Kissinger thing, we cannot forget.

Speaker 2 I say we give her six months off as a result of the Kissinger scam. Yeah, that's

Speaker 2 fair to me.

Speaker 2 So

Speaker 2 this brings us to the subject of what precisely Sam Bankman-Freed has been up to in the nine months or so since his fall from grace. The short answer is that he has not had a wonderful time.

Speaker 2 In January, a month or so after he was granted bail under house arrest, the Southern District of New York accused him of inappropriately contacting former and FTX employees in order to influence their testimony on his case.

Speaker 2 Sam tried to frame all of this as part of his ill-advised apology tour that he embarked on last year in the lag period between FTX collapsing and his formal charges. Yeah.

Speaker 2 Did he hit the notes app? What happened? Oh, he's like calling them. Actually, I'm going to read a quote from Puck in order to describe how he's illegally contacting people.

Speaker 2 On December 12th, the same day he was arrested in the Bahamas, Bankman Freed emailed FTX bankruptcy CEO John J.

Speaker 2 Ray III, offering potentially pertinent information concerning future opportunities and financing for FTX and its creditors, and asked to work constructively with Ray and the Chapter 11 team to do what's best for customers.

Speaker 2 No response. Then, after his extradition, the crypto mogul sent another email to Ray on December 30th, in which he offered advice accessing Alameda funds.
Still no response.

Speaker 2 Then, while being summoned to court in New York, SBF tried Ray again on January 2nd. Mr.
Ray, I know things haven't gotten off on the right foot, but I really do want to be helpful.

Speaker 2 As I'm guessing you've heard, I'm in NYC for the next day. I'd love to meet up while I'm here, even if just to say hi, right, and not take him up on this offer.

Speaker 2 And he has, oh shit, he's reached out to several people and it's always like, I just want to help, you know, get as much money as we can for the customers.

Speaker 2 I just want to, you know, help you deal with the confusing aspects of this.

Speaker 2 But it's, it's like, you're not supposed to be talking to people when you're in the Sam situation who were involved in the company like this because they're probably going to testify against you.

Speaker 2 I don't feel convinced that he understands that.

Speaker 2 I don't know. He's talking like a fucking spam email.
Yeah, he really is.

Speaker 2 And in general, Sam has opted to take all of the actions under house arrests that are likeliest to cause stress ulcers in his lawyers.

Speaker 2 In addition to repeatedly contacting FTX employees, he decided to start a sub stack where he planned to explain how FTX, and it's like there's that famous line from The Wire: Are you taking notes on a criminal conspiracy?

Speaker 2 But in this poem, it's like, are you publishing blog posts about your criminal conspiracy after being indicted?

Speaker 2 Sucks. Outgrowing an audience, Robert.

Speaker 2 It's all a part of the plan. Yeah, it's like if Al Capone had started a New York Times column on having people machine gun in alleys after he'd gone away to fucking Alcatraz.

Speaker 2 Hear me out, you guys. It actually makes way more sense when I explain it.
Yeah. So, neither he only writes like I think two posts before he gives up because they're they're bad.
He's bad at blogging.

Speaker 2 I tried to read him. He's a dog shit writer.
Look. Well, can I? I mean, not to be aggressive, but that's most substack people.
It's just two and then they're out. Wow.
By the way, find my sub-stack.

Speaker 2 Yeah, not you, Robert. There's more.
No, I know you have more than two, but I'm just saying, the average friend of mine that harangues me into

Speaker 2 know these damn emails.

Speaker 2 It's two

Speaker 2 and and then they're done. Anyways, I'm not, I'm probably gonna start one.
I'm just being insecure. I'm sure whatever I want to do in a couple of months.

Speaker 2 I think you'll beat Sam Bankman Freed. No, no question.
Robert, your sub stack is great. Thank you, Sam.
Robert, your sub stack is great. Thank you, Jamie.

Speaker 2 This has been wonderful for my ego.

Speaker 2 Those are two that I actually read.

Speaker 2 So

Speaker 2 Sam's is bad, though. And it's bad.
And part of what he's doing is like,

Speaker 2 he's been charged with a bunch of specific crimes, right? And the posts that he puts up, he does not acknowledge any of the charges against him. He doesn't like defend himself from them.

Speaker 2 Instead, he lays out a bunch of misleading and arcane spreadsheets to try and like argue that the company shouldn't have collapsed the way it did and that he like didn't realize like why he didn't realize it was so bad he's just he's doing it's the same thing as like the ea EA shit we opened the episode with, right?

Speaker 2 This throwing out like confusing piles of numbers in order to distract people, right? Like, this is just like chaff, you know?

Speaker 2 That's what he's doing, is he's throwing out chaff in the way of a bunch of poorly formatted spreadsheets.

Speaker 2 They don't convince anyone that he's innocent. I was about to say, but it sounds like it also, it did not work.
It did not work at all.

Speaker 2 You should not do this if you are being indicted for numerous financial crimes, BT dubs. So

Speaker 2 in early February, the judge overseeing Sam's case forbade him from using encrypted messaging apps like Signal because he was so frequently trying to talk to other people who were part of this case with him

Speaker 2 in secret, which is illegal. He also got in trouble because he was caught using a VPN, which could have potentially allowed him to hide his communications.

Speaker 2 Sam argued he was just using a VPN to access his international NFL Game Pass account. So he could pay attention to that.
I was like, did he just say he was trying to watch Canadian Netflix? Yeah.

Speaker 2 That would be fucking classic. Hey, officer, I just had a lot of shit to tour in, homie.
Like,

Speaker 2 you get it, my man.

Speaker 2 He has since been limited to a normal flip phone

Speaker 2 due to his repeated inability to abide by his bail conditions.

Speaker 2 Now, some might note that Sam has already gotten more second chances than most accused criminals get with their bail conditions.

Speaker 2 It seems accurate to say that the leniency he has received gave him reason to feel as if he could act with impunity, which is why a couple of weeks ago, he leaked his ex-girlfriend's diary to the New York Times.

Speaker 2 Witches...

Speaker 2 Take me through the witches. Why?

Speaker 2 That wasn't what I thought you were going to say. I know, I know.
Nobody thought it was going to head here.

Speaker 2 You know, I mean, it's although it seemed like we were due for another spiteful action against a woman for seemingly no reason. Oh, absolutely.
Absolutely.

Speaker 2 Now, I will say.

Speaker 2 I don't like this woman either. Carolyn Ellison is, I think, a pretty shitty person.
I remember that

Speaker 2 we we spoke about her last time right yeah yeah she unpleasant lady she was the former ceo of alameda i've been listening to this podcast called spellcaster which is like a wondery podcast about sam bankman freed i don't like it the woman who does it like was at a was at a bachelorette party with carolyn ellison right before the charges dropped and was like oh she's so smart she's so and she repeats the same bullshit everyone says about sam they were such they were like geniuses and it's like no they just like blew out a bunch of numbers you didn't understand and convinced you they were smart because they said numbers, right?

Speaker 2 Like there's nothing these people have done that is smart. With situations like that, I'm like, I guess I appreciate the disclosure, but like, why the fuck were you hired to do this show?

Speaker 2 Well, it's, it's because big media is just as tiny and insular a world full of rich people as finance.

Speaker 2 And in fact, a lot of the same families have people at the Times and people and fucking investment banks, which is why here at CoolZone Media,

Speaker 2 we exclusively hire people who used to sell ketamine on their college campuses in order to get by. You know,

Speaker 2 that's the cool zone guarantee. Or Adderall.
You know,

Speaker 2 Lucy's an Adderall. Yeah.
And I appreciate that you made an exception for some of us that you didn't have to be good at it. You just had to try.

Speaker 2 No, in fact, we will not hire you if you were good at selling drugs on your college campus.

Speaker 2 Why did you even apply to this?

Speaker 2 Mediocre part-time campus drug dealers?

Speaker 2 That's our hiring pool.

Speaker 2 Yeah, that's our like, I don't know, whatever. I don't know the names of enough fancy New Yorkers.
Really not that big of a stretch, let's be honest. And I'm fucking proud of that.

Speaker 2 So am I.

Speaker 2 So, Carolyn Ellison, former CEO of Alameda and also Sam's on-again, off-again bow. She immediately turns out.
I don't like you using the term bow, but continuing. Why not? That's what it is.

Speaker 2 Should I use Boo?

Speaker 2 I kind of like Boo.

Speaker 2 I was like, I was like, that doesn't really make sense, but I were. They were co-boos.

Speaker 2 So she immediately turned state's witness and admitted guilt for her share of the illegal activities committed by Alameda.

Speaker 2 And she apparently, as a reparte, as part of immediately rolling, handed over her diary. I think that's how they got her diary.
It was part of the terms of like the, yeah.

Speaker 2 So it gets introduced into evidence, which obviously Sam I think will get access to as a result of that because that's the way discovery works. I believe that's how he got her diary.

Speaker 2 Was she also a Stanford head?

Speaker 2 I don't think she went to, I think she, her parents were professors at MIT.

Speaker 2 Wow. Low losers over at MIT.
Yeah, yeah, yeah.

Speaker 2 Fucking Hobo University right there. And until it happens to me, I love when someone's diary is introduced into evidence.
And that brings me back to Elizabeth Holmes yet again when she, like,

Speaker 2 her creepy little sexts with Sonny Belwani, ooh, blade. Some of the worst sex.

Speaker 2 Some of the very worst sexs. That is maybe the moment that I felt closest to her.

Speaker 2 That's when she, that's when Liz almost got me because she was sending walls of text to this guy and then he was sending back, okay.

Speaker 2 And it's like, you know what? Oh,

Speaker 2 brutal.

Speaker 2 No, no,

Speaker 2 she deserved a man like Jeff Bezos who would call her the most unsettling nickname I've ever ever heard. You know,

Speaker 2 but at least he responded, a live girl. Oh, says nicknames.
That's right.

Speaker 2 That's right.

Speaker 2 Wow. Oh, I think I'm Jeff.
I think we,

Speaker 2 we, as we, we, we, we, we as a collective blocked that out intentionally. Yeah, it's very funny.
It does make it clear that he's not a robot because, like, nobody, nobody fakes that.

Speaker 2 That's, that's a, that's evidence that he feels something. What he feels is off-putting.

Speaker 2 it's frightening it's like profoundly unsettling but he does feel something but unfortunately yeah chat gpt could have outdone that in terms of sounding like a person absolutely yeah um

Speaker 2 so anyway sam gets access to her diary one way or the other uh and then he hands her diary to the new york times so that they can write an article about it now That is unethical as fuck and possibly illegal.

Speaker 2 The prosecution has asked that he be jailed, that his bail be revoked

Speaker 2 because of what he did here. Sam's, this is still going on as we talk.
I'll record a little update if he does go to jail as a result of this. Hey, everyone, Robert here.

Speaker 2 I just wanted to update you that since we recorded this episode a couple of days before you're hearing it, Sam Bankman-Fried was remanded to custody.

Speaker 2 He is incarcerated now, and he will remain in jail after violating his bail conditions until his trial in October at

Speaker 2 least and possibly well beyond that, depending on how the charges and sentencing and all that stuff go.

Speaker 2 I should note that kind of the most recent story after that is that his lawyers requested that he be allowed to have his ADHD medication and depression medication, which he ran out of soon after being taken into custody.

Speaker 2 The judge has ordered that he be given that medication. Obviously, I'm always in favor of people who are incarcerated having access to medication.

Speaker 2 If anyone's interested, I don't actually think putting Sam in jail is going to do much good. I'm a little bit more mixed on this than I normally am, just because of the case of

Speaker 2 Adam Newman,

Speaker 2 the WeWork guy who got off scot-free from his giant financial crimes and is now starting another giant grift company and will probably fuck with a bunch of other people's lives.

Speaker 2 But I do kind of think it's unlikely that we're going to get much benefit out of this. That said, I don't really feel for Sam.

Speaker 2 He had many, many chances not to be in in this situation, and he fucked all of them up. So, you know, fuck the guy.

Speaker 2 Sam's lawyers have argued he was not attempting to discredit a witness, but just to respond to a toxic media environment, which he says unfairly portrays him as a villain.

Speaker 2 And I guess we're part of that toxic media environment. Although, Sam, free tip here, handing your ex-girlfriend's diary to the New York Times is a bad way to seem like not the villain.

Speaker 2 That's kind of villain behavior, homie. That's.

Speaker 2 I hate to tell you.

Speaker 2 i uh again but it's like again you can imagine his like

Speaker 2 doofy loser logic of like no officer i was just being a petty

Speaker 2 is that against the law and you're like in this case yes yes it is actually sir

Speaker 2 bruh so humorously enough that is the legal argument his lawyers are making and they they kind of have a point because they're like look if you read the new york times article based on her diary he seems like a piece of shit so clearly we weren't trying to influence the prosecution.

Speaker 2 And like, they do have a point because he does come across as the bad guy in that article that he made happen. So that's funny.
He comes across as the bad guy in

Speaker 2 most things.

Speaker 2 Yeah. I'm going to quote from some of that New York Times coverage here.
Mr.

Speaker 2 Bankman Fried and Miss Ellison have started an unsteady, also started an unsteady romantic relationship with multiple breakups and reconciliations. At times, Miss Ellison worried that Mr.

Speaker 2 Bankman Fried thought she wasn't good enough. When he was around, she wrote in February 2022 in a Google document she had, an instinct to shrink and become smaller and quieter and defer to others.

Speaker 2 After one split, Miss Ellison cut off communication with Mr. Bankman-Fried.
I felt pretty hurt rejected, she wrote in the April 2022 Google document.

Speaker 2 Not giving you the contact you wanted felt like the only way I could regain a sense of power.

Speaker 2 Miss Ellison was compensated far less generously than other top executives at FTX and Alameda, though it's unclear whether she was aware of it.

Speaker 2 According to court filings, the exchange's founders and other key employees received $3.2 billion in payouts and loans.

Speaker 2 Of that total, $6 million went to Miss Ellison, compared with $587 million for Mr. Sing, FTX's head of engineering, and $246 million for Mr.
Wang, one of the founders. Mr.

Speaker 2 Bankman-Fried received $2.2 billion. So

Speaker 2 Ellison is definitely not innocent here. She has admitted guilt in this case.
But the reporting makes it seem as if her main role was to act as a patsy.

Speaker 2 Sam knew she was in love with him and deeply insecure.

Speaker 2 So he put her in charge of Alameda so that he could use it as part of his grift to manipulate the value of his crypto empire using customer funds.

Speaker 2 And this basically the $6 million he gave her, which is a tiny fraction of like the $3 billion they funnel to executives. That's like him paying her to be a smokescreen, right?

Speaker 2 She's not an equal partner in this enterprise.

Speaker 2 And one of the things that had happened right before this fell apart is he had, he had stopped paying attention to her and Alameda in order to start throwing money through another crypto exchange run from a woman he was fucking now.

Speaker 2 That he had like, so it seems like this was a path.

Speaker 2 Stop.

Speaker 2 What? I just, I'm not doing this. I'm just talking about what he did.
I just don't really. I just,

Speaker 2 well, it's bad. He's a bastard.
That's why we're talking about him. I just really, I just really need.
I don't know who needs to hear this, but we just really need people to stop fucking Sampankman.

Speaker 2 That's my

Speaker 2 point.

Speaker 2 This is very bad, gross behavior. It's gross and it's bad for the world.

Speaker 2 Yeah, yeah. So, you know, fuck this guy.

Speaker 2 One bit of Schadenfreude I can give you all is that according to Puck News, Sam's present situation is so unpleasant that he considers his trips across the country to go to court in New York the highlight of his life now.

Speaker 2 Because he gets to like go out in the street. He's surrounded by lawyers and private security.
So it's like he's got an entourage again. He gets to travel.

Speaker 2 This is like the closest he gets to feeling like what he used to be a billionaire.

Speaker 2 So that's kind kind of fun.

Speaker 2 The downside is from the perspective of an FBF hater, the downside is that recently one of his charges was dismissed, the campaign finance violation.

Speaker 2 This was not due to him being innocent, but due to some legal weirdness involving the letter of the extradition agreement the U.S. signed with the Bahamas.

Speaker 2 Basically, when we put together the agreements that they'd extradite him, that was not on the document. So the feds had to like drop the charge in order to not deal with a bunch of other bullshit.

Speaker 2 It's a technicality, but it means that his brother Gabe and several members of the philanthropic team at FTX probably will not be charged for very likely committing crimes.

Speaker 2 And I say they likely committed crimes because FTX executive Nishad Singh already pled guilty this spring to participating in a straw donor scheme.

Speaker 2 So he is, yeah, and he pled guilty before they drop this charge, which he's got to feel like an asshole for doing because now he is going to get punished for that, even though SBF is no longer being charged for it.

Speaker 2 Wow. That's, I mean, look, sometimes you do the ethical, altruistic thing, and it comes back to bite you in the ass.
What are you going to do?

Speaker 2 Yeah, what are you going to do? Hey, everyone. Just wanted to note that since we recorded this, the prosecution has noted that they will be seeking to add those charges back on that were dropped.

Speaker 2 So it's possible that both Sam and other members of his inner circle will be charged with all that stuff. We just really kind of don't know at this point.

Speaker 2 But I do want to note that the prosecution is at least saying, hey, like despite this

Speaker 2 little mess up, we are, we are not just giving up on this charge. So heads up about that.
Could change in the future. Well, Jamie.

Speaker 2 Yeah.

Speaker 2 How you doing?

Speaker 2 I really, well, I have a question for you. I have an answer for you.
Well, I sure fucking hope so. No, my question is that I'm curious, what do you see happening here?

Speaker 2 What feels plausible to to you at this time?

Speaker 2 You know, I've been seeing a lot of people be like, oh, he's going to get off. He's going to get all.
He's got too many connections, too many, you know, people who he could roll on.

Speaker 2 I don't think he has many people he could really roll on.

Speaker 2 I don't think he was like, especially since these finance charges have been dropped, I don't know that I really think he's got the savvy to have. Like a guy like John McAfee,

Speaker 2 I believe John McAfee killed himself. I don't believe there's anything shady there.
I know a lot about the guy. It makes sense to me that when his fucking running finally stopped, he would do that.

Speaker 2 But McAfee probably did have some dirt on some people. He was that kind of cunning, right?

Speaker 2 I wouldn't be shocked if John McAfee had put together some dirt on some people, right? I don't think Sam Bankman-Freed is that cunning. I don't think he was like smart enough to have dirt on anyone.

Speaker 2 who could get him out of this situation. I think there's a pretty good chance he does hard time.
I think he fucked with too many people.

Speaker 2 He fucked with the money and he fucked with it in too dumb of a way. So I think he's screwed.
Okay.

Speaker 2 That's, that was my instinct as well, because I feel like he doesn't even have, I mean, he doesn't have any sort of like, I think sometimes with, with these types, you get some sort of press narrative that it's like they're playing 4D chess.

Speaker 2 And like, even if that's not entirely true, there's like a media narrative that sticks to them that makes them seem more plausible.

Speaker 2 But I just feel like everything that's like all of his actions and all of the media surrounding him, except for a very, very small amount, seems to reinforce the fact that he's completely incompetent and malicious in

Speaker 2 every way.

Speaker 2 Yeah.

Speaker 2 I would say that.

Speaker 2 Well, good.

Speaker 2 I, God, I mean, not that I, you know, I don't know. I mean, it seems like he's fucked.
I certainly hope he's fucked. I hope he's fucked.
I hate him. I think he's a gross person.

Speaker 2 I hope Will McCaskill goes away

Speaker 2 or gets like eaten by eaten by a large fish would be my pick if I got it. If like God is like, what do you want me to do to Will McCaskill?

Speaker 2 I'm like, you, you remember that thing you did with a whale back in the day? What if he didn't get out? What if a whale just eats him, you know? And then God would be like, oh, amazing.

Speaker 2 I'm, I love playing the hitch. Oh, I love, great pitch.
You know what, Robert? I'm going to give you that HBO series you've been asking for. Robert, you are an amazing collaborator.
Oh, yeah.

Speaker 2 Me and God, co-creators of my HBO series. I am hoping if the strike goes on, they take my reality show pitch, Super Soaker Full of Piss, which I really think has some potential, Jamie.

Speaker 2 I have to do it. The premise is.

Speaker 2 No, go ahead. Tell me the premise of Super Soaker full of piss, Robert.
I'm ready. So I'm in a van.

Speaker 2 I filled a super soaker with my piss, and I drive around like Rodeo Drive, and I get out when I see someone who looks famous, and I squirt them with a super soaker full of piss.

Speaker 2 And then we film it, and then I leave very quickly. Okay, I mean, I'm on with that.
Yeah, I think it's a great, I think it's great. You know,

Speaker 2 we'll get, you know,

Speaker 2 I would be kind of pro, like, if you could get, I think the soundtrack is going to be really key there. Like, I think if you could get some like jock jam situation, like going

Speaker 2 all live, all live editions of Blink 182 songs. Wow.
Because you know, because they have, they are one of the worst live bands that ever played. So it's really

Speaker 2 just upsetting to the to the viewer that's the goal here and you know given who blink 182 like rolls with these days you may in fact run into travis on rodeo drive and oh yeah

Speaker 2 piss right in the face just a just a a full load of it you know just to say i hate this idea because it means that some fucking celebrity will murder you and then i and then she'll be gone and then i'll be sad i'm going to be honest i'm not great at recognizing celebrities So anytime I could just see someone in a suit and spray them with the piss.

Speaker 2 Yeah, Jamie.

Speaker 2 I know. I feel like we can sell this show.
Show me my other bestie. No.

Speaker 2 We just roll down the street. It's Nick Jonas, Robert.
Spray, spray, spray. Get the fuck out of here.
Wow. I'm like, no, no, no, no, that's the good one.
That's Nick Jonas, Robert. That's right.

Speaker 2 That's right. That's right.

Speaker 2 I'm going to rely on Jamie to recognize him, though. Oh, my God.
I did see that, Jamie. That's so cool.
Yeah.

Speaker 2 All right. Well, the Jonas brothers have their own vanity popcorn brand now.
Isn't that something? These are the amazing things I can teach you, Robert.

Speaker 2 And you've already taught me so much about hot dog through your best-selling book, Raw Dog.

Speaker 2 Wow. Perfect translation.
That is a fucking pivot. You're welcome.
What is this? Spicy plug, though. Gorgeous.
Nice job. Gorgeous plug.
Hey, it's never too late to start reading about hot dogs.

Speaker 2 It's never too late to start learning.

Speaker 2 Reading about hot dogs and also America.

Speaker 2 Fascinating story. Raw dog, find it wherever books are found.

Speaker 2 Yeah. Well, thank you so much.
I truly, I was, I mean, as you know, I did a bastards episode about hot dogs as I was writing that book

Speaker 2 so that I would remain focused. That's right.
It's the best way. And I have heard.
that the

Speaker 2 subject of that episode, George Shea,

Speaker 2 that the hot dog eating community is actively protecting him from its existence. He does not know it exists.
He does not know the book exists. Love to hear it.

Speaker 2 Everyone in his life is really actively trying, like every hot dog eater or many hot dog eaters I talked to were like, yeah, no, we know about the Bastards episode and we know about the book, but we really don't want George to know about it.

Speaker 2 I was like, okay, fair enough. Beautiful.
Thank you, Jamie.

Speaker 2 That made me feel great. You can sign up for this show and all other CoolZone shows ad-free at CoolerZone Media.
That's for Apple.

Speaker 2 Subscribers, we are working on the Android option.

Speaker 2 You can find my novel After the Revolution by typing After the Revolution into whatever book buying site you use, or just walk into a bookstore and demand it from the manager at SwordPoint.

Speaker 2 Anyway, goodbye. Goodbye.
Goodbye.

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CZM Rewind: How Sam Bankman-Fried Conned the Crypto World & The Sam Bankman-Fried Update

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Transcript

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