Ryan Salame: Facing Prison for Donating to Trump, His Journey With SBF, & Why the Banks Hate Crypto

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So I feel like kind of an idiot

as someone who is watching from afar this case

that it never really occurred to me

that the way it was prosecuted

would be determined by politics.

But of course,

because the justice system is inherently political now, it's openly political, and we're in an election year where Trump is running. So I was interested to note in reading about it and in our breakfast that we just had, that you were not indicted, and you're about to go away for seven and a half years to federal prison, but not for financial crimes, fundamentally, for campaign finance violations.

And so in one sentence, let me tell you the overview from my perspective. Correct me if I'm

wrong. Here you have Sam Bankman-Fried, who's in prison for a long time, but he's not been charged

with any campaign finance violations. He gave it to Democrats.
He helped get Biden elected.

You gave to Republicans, and you're going away on campaign finance violations. That's correct.
That's correct. Okay.
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So I initially assumed that the Justice Department was not sort of a political organization. And, you know, because I was new to D.C., I hadn't been around that much.
And you grew up in this country, correct? I grew up in this country. And, you know, you try to have faith in the system.
You try to have faith in how it all shakes out. Been there.
I'm now realizing that it is incredibly political. But you're not going to prison for making up a fake cryptocurrency or defrauding investors? No.
In fact, the Justice Department has sort of specifically noted and stated that they know I was not aware of the central fraud. So they introduced some evidence, some testimony during Sam's case that showed right up until the last minute Caroline Ellison was lying to me and to the rest of sort of people at FTX and Alameda about funds being stolen.
So that was, I mean, again, I'm coming at this as a non-finance person, just as a reader of the news, but I thought the crime at FTX was defrauding a million investors using investor funds for things like real estate. Right.
Completely agree that that is the crime that occurred. That's the crime, but that's not what you're going to prison for.
Correct. They, you know, in uncovering that crime, they manufactured a lot of other crimes and intent behind them that was just not there and never existed.
So the two things that I've pled guilty to are operating unlicensed money transmitting business and campaign finance fraud. The reality is the campaign finance fraud is everything that they wanted.
And then they sort of found some other things to lay at my feet and put pressure on me with. So let's just go through them.
Can you describe what the first crime is? Yeah. So you need a money transmitting license to operate a money transmitting business in the United States.
What is money transmitting? Is moving money from one place to another? Yeah. Essentially moving money one place to another.
I actually, when I arrived at Alameda, I went to our lawyers and questioned whether we needed money transmitting licenses or not, because I had just been at a company that had money transmitting licenses. So I knew of these licenses and where they were relevant.
And I got very specific legal instruction from good lawyers that we did not need money transmitting licenses. And those licenses are bestowed by the federal government, I assume.
Yeah, that's correct. And state governments as well.
Okay. So that's one, not getting a license, a government license to move money from one place to another.
Correct. Though I will note that the company that I ran, we didn't touch U.S.
customers. There was a separate U.S.
division that did touch U.S. customers, and they had money transmitting licenses.
Okay. So how could you be indicted for that? I mean, it's a great question.
Certainly, even if we needed MTLs, I was not a lawyer. I sought legal advice.
The lawyers that sort of ran the company, ran regulation, ran the licensing, noted that this was their responsibility, but it has been laid at my feet. So you're accused of not getting a U.S.
government license to move the money of non-U.S. citizens.
Correct. How can that be a crime? I've yet to have a lawyer explain to me why we needed MTL licenses.
Okay. All right.
Interesting. This is just sort of blowing my mind.
I mean, even when I was considering doing this interview, I was thinking, well, FTX, bad, fraud, bad. We did a whole documentary on why FTX committed fraud and why they're bad, which I still think.
And I just didn't know that you weren't charged for any of those crimes. And I don't think that most people reading the news coverage of your pleas would understand, like if you're just following Bloomberg News or Reuters,

would understand that you were never charged

with the crimes that FTX is famous for.

Yeah, that's correct, I think.

And that's a big part of why I'm here

and why we're talking about it.

Okay, interesting.

But there's a lot of misconception

around many aspects of the case.

Well, but this isn't in the realm of opinion.

These are just the facts, publicly available facts,

like what you were indicted for,

what you pled to, what you're being sentenced for.

Like those aren't opinions.

Those are verifiable facts.

Yeah, that's correct.

And none of these charges are in any way defrauding

any individual or taking money from them

or stealing from them.

You know, I had 98-ish percent of my net worth

on the platform. If I thought Sam was stealing money, I had 98-ish percent of my net worth on the platform.

If I thought Sam was stealing money, I would not have left all my money on FDX.

It wouldn't make any sense.

Okay, so you committed a crime that doesn't seem to be a crime, logically, but whatever.

And then there are the campaign finance violations.

The campaign finance violations are because I borrowed money from Alameda, which was Sam's company that he owned. Private company, no investors, all just lent money.
But I borrowed money, and then I went and did a lot of things with that money. And one of the big things I did was get involved in political contributions.
But I also bought a house with that money. I lived off that money.
So the real story there is when I decided to get involved in politics and take a lot of money off of the FTX platform, I again went to our legal counsel and I said, look, I'm going to sell off a large chunk of the money that I have on the platform. This is various crypto tokens.
This is, I think I had some equity I was looking at selling. I was going to cash out essentially.
And the lawyers advised that that is not the way to do it. The proper way to do it would be to borrow the money against these holdings.
It's a tax advantageous strategy. It's not a crime.
It's how most people borrow when they have sort of a large pool of equity. It's how a lot of prominent people get money out.
I would say right around 100%, actually. Yeah.
Well, the lawyers advise it. You know, you go to lawyers.
Because you don't want to get hit on the gains, correct? Correct. It will eventually be taxed.
Right, but you've got a low basis on this stuff. You know, you took possession of these assets when they were worth much less than they're worth now.
Correct. And so you borrow against it to cash out.
Correct. And then I use a bunch of that money to get involved in the political system.
But even before we get to that, I just want to confirm that that is not, not only is that not unusual, that is the standard for people in your position. Correct.
I happen to know that. Yeah, yeah.
And accountants advise it, lawyers advise. I mean, it is what you're told to do.
That is 100% true. Whether you agree with our system, our tax system, it doesn't even matter.
That is what everybody does. Legitimate people.
So, okay. So then, but the problem that you ran into arose from the fact that you used some of that money to give political campaign contributions.
Correct. Okay.
So what did that consist of? I believe in total, I donated about $20 to $30 million throughout the cycle to Republican candidates. Okay.
So anywhere from your PACs to individual donations to specific candidates up to the, I think it was $2,800 limit. And what percentage of that money went to Republicans? 100% of the money I gave went to Republicans.
I've always been a Republican. Yeah, it's just the party that makes the most sense for a plethora of reasons at this point.
Right, but it's consistent with your beliefs. It's consistent with my beliefs.
It's rare to be, I think, young in tech and a Republican, so it's a lot of why I got involved, but yes. At the same time, Sam Bankman-Fried famously was contributing to politicians as well.
Correct. He was running.
Yeah, he was giving primarily to Democrats, though he was doing some dark to Republicans as well. How much did he give to Democrats? I don't remember the exact numbers.
I want to say we're close to 60 to 70 million in total. Wow.

Yeah.

Okay, so one of the biggest donors in the cycle.

I think he was second or third, yeah.

In the 2020 cycle.

That's correct.

And he has not been indicted for campaign finance violations?

That's correct.

He was not indicted on the campaign finance violations. Only two of us got in trouble for campaign finance,

and that was Nishad Singh, who was part of the central fraud, and myself.

Hmm. So he gave, anyway to Democrats.
You gave to Republicans much less, but you get indicted he doesn't. That's correct.
How do you think that works? I don't understand how all of this works anymore. So I don't know what to say to that.
But it's strange, especially since, you know, he was the central political figure. Sort of, this is, yeah.
Huh. What was your crime exactly? My crime was, they accused me of being a straw donor for Sam Bagman-Farid.
So I was only doing, I was taking his money and spreading it out because it was borrowed from Alameda. But it was your money, though.
Well, it was borrowed against my money. And it would have been my money had I not gone to the lawyers and asked them the appropriate way to take money out.
Yes. Okay.
So, I mean, is that, I'm just confused by the concept a little bit. If I, you know, if my net worth is mostly borrowed, which is in the case, that's true for a lot of people.
Yep. And I donate to a political campaign.
Is that a straw contribution? It was in this case. It was considered a straw contribution.
Have you ever heard of that before? No, no. I mean, the sort of, the thing I have to wrap my head around, there has to be a why, right? You have to ask why for anything.
I don't know why I would make something a crime that didn't need to be. Right?

What does that mean?

Like, if I had just sold off my crypto and contributed the way I initially wanted to and planned to, there is no crime.

But because I sort of went, listened, and borrowed the money the way I was advised to, they've now turned it into a straw donor scheme.

So, it doesn't seem to make any sense, these charges, actually? Yes, I would agree with the fact that they don't. And I was, you know, I was very close to going to trial.
The government comes up with creative ways to get you to not go to trial. And they came up with a very smart way to get me to avoid trial.
Which was what? They told me that if I pled guilty to these two crimes, they would not pursue my loved ones and looking at anything that they had done or investigating them. Your loved ones? Yeah.
The mother of my child. Is she a criminal? No.
No, absolutely not. But, I mean, you know, as well as I did, an investigation can destroy your life regardless of whether you're innocent or guilty.

So they threatened the mother of your child in order to get you to plead to things that were not self-evidently crimes.

Correct.

What did your lawyer say?

My lawyers were pretty surprised by it. They said this inducement was incredibly strong, not something that they had ever done when they were prosecutors and not something that they had expected.
You know, they said it's up to me. I mean, they present all the information to you.
It's a very odd process for anyone who's never gone through an investigation, which I assume is most people. You never speak directly to the prosecutors.
It's all through lawyers who then give you sort of a readout of what's going on, you know, and they lay out your options, right? So if I went to trial, it was a jury in New York. I'm a Republican, heterosexual, white male, had accumulated a fair bit of money.
The jury's not going to love me already. So they- Did the lawyers tell you that? Yeah, they lay that out.
You know, the lawyers will tell you that even if you're completely innocent, it is hard to win at trial. The government has all of the, because of your demographic profile, demographic profile, and the government controls the entire narrative.
You know, people are scared. No one's going to get up and testify in my defense.
They're scared that the government's going to go after them if they do. Um, you know, this is a big problem I had with Sam Bacon-Fried's trial.
I'm not saying he's innocent by far, but I watched it and thought, if I'd been on the defense for him, a lot of that stuff was just not accurate the way they were describing it. But no one got up to counter any of the government's narrative, because then you get threatened with more time in prison.
You say one wrong thing on the stand in defense of someone, and will get you for perjury or your lawyers will tell you this.

So I flirted with the idea of being on the defense for Sam, not because I thought he was innocent of everything that they accused.

But there was no one up there providing a counter narrative to this narrative that the government had spun up.

And that's not how the justice is supposed to work.

So I note this to my lawyers and the lawyers said you could face an extra 10 years for doing that.

Thank you. that the government had spun up.
And that's not how the justice system is supposed to work. So I note this to my lawyers, and the lawyers said you could face an extra 10 years for doing that.
Do you really want to sort of risk that? It was clear Sam was going to lose ultimately, and I'm not saying that's wrong, but it's not the way the system is supposed to work. The government hands get out of jail free cards if you parrot the narrative that they want.
And then the, you know, everyone who would provide any counterpoint is frightened. It's just, that's not justice.
It's an odd version of it. It's not an American version of it.
It's not the point of our whole American system on it. You know, trial is also going to be 10 to, I think it was 8, 10, 12 million dollars.
Most of my money was gone, locked up on FTX. So, you know, I was operating from substantially less means than I had before.
You know, I don't know how anyone, I don't know how anyone does it. And you can't just go out and get a job.
No, can't go out and get a job. I mean, I'm not going to make $10 million overnight to defend myself.

So, you know, and the inducement, I think, was the ultimate decision maker. Putting the mother of your child in prison.
Right. I mean, you can get me to plead guilty to anything if that's on the table.
So your lawyers were explicit with you about that? They were explicit. Yeah.
Yeah. I mean, they explained the government's careful, right? I mean, I'll say that I think today or tomorrow I'm going to file an appeal to my guilty plea because the government has now continued to pursue the mother of my child despite saying that they wouldn't if I pled guilty.
So I'm going to use that in an attempt and appeal. Wait, so they got you to plead by threatening the person you love with indictment.
And so you pled on the basis of their promise that they would not indict her. Correct.
Not even not indict, not investigate. They would drop the investigation or any investigation into her if I pled.
What did she do wrong?

We,

uh,

we are not married currently.

Um, and we shared finances.

And,

uh,

so they're accusing her of also a campaign finance fraud violation,

um,

because our finances are commingled and intermixed.

Huh?

So,

um,

so your lawyers told you,

if you do this,

you're basically doing it for the mother of your child um she will not be hassled they'll leave her alone that's correct i mean and they went further than that they sort of put her her case into cold storage um which you know they they didn't have her um plead the fifth during times as she should have she's also going through a sort of difficult divorce proceeding. Which is why you're not married.
Which is why we're not married. So, you know, she should have pled the fifth during things.
Everyone thought the investigation was dropped into her because of this inducement. And then what happened? And then we found out, I don't know, a few months ago that it is not.
They have continued to pursue investigating her.

They don't acknowledge the inducement as being real.

And they're going to charge her.

The inducement being their promise not to do this.

Correct.

On the basis of which you pled guilty.

Correct.

To crimes that are not actually crimes.

Correct.

Right.

And then so they said they wouldn't hassle her.

And then once you pled, they indicted her anyway. Correct.
Well, yeah, a year later, a year and a half later. Why do you think they did that? I don't know.
It doesn't make any sense to me. So, I mean, just if you zoom out a little bit, if you lie to a federal agent, that's a felony.
Yes. But if a federal prosecutor lies to you, it's fine.
That's correct. And I think they know the public narrative around FTX is so terrible.
You know, they control the narrative, right? No one talks to the media more than the prosecutors and the government, even though they sort of lock people up on the other side if they talk to the media. The government sort of controls the narrative publicly, right? So they know how bad the FTX story is and how little the public wants to even think about any aspect of it anymore.
So I think that emboldens them to just sort of do whatever they want. How much did you spend on lawyers in this process? I've spent five or six million in totals so far.
On lawyers? Correct. So those lawyers made five or six million dollars from you? Correct.
And yet they brokered what seems like the worst plea deal like in the history of

plea deals. Yeah I mean they sort of counted as a victory.
I wasn't charged with the central fraud. They counted it as a victory.
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That's 1-800-780-8888. was there any suggestion that you could be charged with a central fraud no in which case i would just being honest with you i would have much less sympathy because you know if you're involved in a fraud that defrauds a million people like that's on no.
A lot of the government or a lot of, sorry, not a lot of the government. A lot of people just think everyone at FTX is involved in the fraud, right? There's this public idea that a hundred percent of the employees, the people at the company must have known and everyone should go to prison.
Yeah. People feel that way for sure.
Yeah. But there's no hint of that in your case.
There's the opposite.

There's literally Caroline Ellison, who was sort of the central to this entire thing,

saying we lied to Ryan right up until the last moment.

This came up in SBF's trial.

There's messages related to it of me messaging her.

Caroline Ellison was the girlfriend of Sam Bankman-Fried.

Yeah, and the CEO of Alameda Research.

Right.

Put her in, yeah.

How, is she in prison?

She's not yet. She's a cooperator with the government.
She's potentially going to get no jail time. No jail time.
But we don't know yet. It's up to Judge Kaplan.
But there's no, oh, Judge Kaplan. Yeah.
So there's no question that she was involved in, had knowledge of the fraud. Correct, correct.
She gave a interview sort of to the company, you know, right after it collapsed, noting that it was her, Gary, Nishan, Sam, that has sort of orchestrated this large theft or use of customer funds in an inappropriate way. Okay.
But she's, as far as you know, not going to prison, you're going to prison soon. Correct.
For seven and a half years. Correct.
And there, no one's even claiming you're a part of the fraud. But this chick who has admitted being part of the fraud is not facing prison.
She might go sometime. She's certainly not going.
As of right now. As of right now, correct.
What do you think of that? You know, I don't know what to think of it. You've reached some level of Zen acceptance here.
You enter this tw you enter this twilight zone in the whole process, you know, where like reality isn't a thing anymore and you either cope with it or you go mad. So, coping with it.
Now, what about, so Sam Bankman-Fried, so you just listed the officers of the company, but Sam Bankman-Fried was heavily involved with his parents, both attorneys. One's an ethics professor, I believe.
Correct. Who seemed remarkably sleazy.
I'm just judging from the emails that came to light. Greedy.
Pushing for more money, more real estate, whatever. And then his brother, Gabe.
Have any of them pled guilty to anything? No. No one else was charged outside of the Central Four and myself, and now, you know, Michelle.
So none of the Bankman-Fried family has faced any legal consequences from this? That's correct. Or any of the lawyers that advised a substantial amount of this.
I mean, in both of my fact patterns, the lawyers were heavily, heavily involved. You know, they make, I forget if it was my lawyer that said it, but it said you can't

go ask your lawyer if you can shoot someone in the head, have them say yes, and then shoot

them, right?

That's not a defensive, you can't say the lawyer told me I could do this, so I did it.

But I don't know what the point of the lawyer is then, right?

If I go to the lawyer and say, is this sort of MTL legal, or is this campaign finance thing we're legal? And they say, yes, you know, what am I just supposed to be a lawyer? Like, this is their purpose. This is the whole reason I, you know, you go to them or you talk to them or you ask them these questions.
So it's frustrating to be in trouble for things that you genuinely try to do legally and feel like you went the route you were supposed to, to do them legally. Also, I mean, if you, you know, if you're getting indicted for not having a U S government license to transfer the funds of people who are not U S citizens outside of the United States, like that's insane.
Like who would ever imagine that you would be indicted for that? That's correct. Yeah.
I, I couldn't imagine. I mean, could I, I don't know, could the FBI arrest a driver in Abu Dhabi for not having a U.S.
driver's license? Like, I think at this point, the government just does whatever it wants anywhere in the world. I think you're onto something.
I think you're getting warmer there, Ryan. Wow.
Okay. So just because it's just very interesting who gets punished in this.
And I'll just confess my ignorance once again. I read SBFs getting 25 years in prison.
That's a long, that's hard time. I feel bad for anybody facing 25 years in prison, but it's like kind of case closed right at that point.
Justice has been done, but I don't see how his family escaped indictment. I don't get that.
Yeah. I mean, I don't want more people in prison.
I'm not saying you do, but I mean- I don't know how a lot of people sort of avoided this, and I don't know how I ended up in the hot seat. You know, it's the Republican donations, for sure, at this point.
But it's very strange and disheartening. So what did the lawyers tell? Because seven and a half years, I don't want to rub it in.
I feel so sad for you. But that's real.
You know, it's not six weeks in the drunk tank. No, that's correct.
And it is more time than even the prosecutors requested. So the prosecutors push for five to seven years.
We push for 18 months. The sort of standard playbook is typically, you know, they'll split that down the middle.
Seven and a half years is more than anyone asked for. How did you wind up with that? You know, the judge read me a whole statement.
He sort of indicated... Can you tell us who the judge was? It was Judge Kaplan.
He had just finished with Trump's, I think the Gino Carroll case. I think I was a week after.
You know, he spent the first half of the comments to me talking about how he disliked Citizens United.

So I knew I was in trouble at that point.

Were you involved in the Citizens United decision?

No, no. And it's legal, to be clear.

So once it started there, though, I knew we were off to...

Citizens United is a Supreme Court decision.

Correct.

You did not argue that before the Supreme Court.

Correct. You didn't work for Citizens United.
Correct. What does that have to do with you? That's the beginning of, you know, him talking to me.
He goes into a lengthy discussion about how America is losing faith in its political system. You know, you know what he was trying to say.
Who is this guy? He's a judge. He's been on the bench a long time, Judge Kaplan.
I know this is all I know about him. Um, you know, throughout the, the plea process, they, you know, my lawyers told me what Kaplan really cares about is acceptance of responsibility.
If you want to minimize the amount of time that you're going to serve, the most important thing is to just get up, take responsibility, own it, describe how you were responsible, apologize, say you'll do better going forward. So we didn't sort of, that's all I did.
I made this whole, you know, apology speech and everything. And I'm genuinely sorry for all the customers of FTX.
So there's not nothing there. You know, it's a real, you know, what happened to them is horrific and haunts me daily.
But, you know, in front of that sort of the whole speech we put together was geared toward that. But Kaplan sort of grabbed all these things that just weren't true and started listing them off to me.
Right. So he said, I ran to the Bahamian regulators to save myself.
That's not true. The Bahamian regulators emailed Sam and I asking what was going on.
Sam was busy with the collapse of the company. So I got on with the regulators and told them what I was learning about in real time.
But sort of the judge spinned it that I ran to the Bahamian regulators to save myself. I did manage to withdraw some money from FTX.
It was before I knew that it was going to be filed bankruptcy. So everyone else is withdrawing.
I also withdrew a little bit, just enough to cover legal fees because I had no money in the bank. He twisted that as me sort of getting out before all the customers.
I think he said, you know, your point was to hell with the customers. I'll save myself.
May I ask, you weren't charged with that? Correct. That has nothing to do with the charges you pled to.

That's correct.

So that's like saying, you know, you were drunk at a dinner party three years ago and I found you obnoxious.

Therefore, more jail time for you.

Like, what does that have to do with the crime?

Yeah, the whole thing was odd.

The whole experience.

That's insane.

And he said this in open court?

Yeah, this was his final statement to me as he, you know, was about to tell me that I was going to do seven and a half years. He described me as part of the mastermind behind this campaign finance fraud scheme that we were all involved in, which is crazy.
I mean, you stand there, you're listening to this, you can't say anything. Why? It's the court, you know, you're in the courtroom.
You're there to listen and then he gives a judge. You have to feign respect for people, Judge Kaplan.
Of course. Yeah, I don't.
I have no respect. Yeah.
Sorry. Wow.
So you're, but your lawyer sounds like did not prepare you for this at all. No, the lawyers expect, I mean, they do, the maximum was 10.
It was zero to 10. It's up to the judge almost indiscriminately what they want to do.
But the standard procedure here would have been to basically split the time we requested and the time the prosecutors requested. And at worse, what the prosecutors requested.
It's almost unheard of to go above even what the prosecutors want. Did your lawyers apologize to you? No, they don't.
They don't apologize. mean, they always they're always caveating their statements, right? It's always it could go this way.
It could go that way. This isn't an exact science.
Were any of the lawyers at FTX charged with anything? No. Really? It almost sounds like a system designed by and for the benefit of lawyers.
I'm just kind of throwing it. It is 100 percent a system for and to benefit the lawyers.
I mean, all of it is. You know, the bankruptcy team is about to take a billion dollars in fees for a company that has enough money to pay back customers.
That doesn't mean Sam did nothing wrong, but there is enough money in this whole system to pay back customers 120% and would have been even more, had a number of sort of more intelligent things been done. But the lawyers got to the trough first and just stole the money themselves.
They take it. I mean, they keep describing this massive, massive organization with no accountants, no nothing.
I mean, that wasn't true. There was a whole accounting department.
The accounting department was hiring more people. I mean, the company's only three years old, was only three years old, and just had meteoric growth from basically the beginning.
So hiring people was a catch-up. Every week, you try to hire someone, you got to interview them, they got to come.
You're now a week behind in work. There was an attempt by every department that I was aware of and involved in to hire good people and build out real systems.
But you're describing the aftermath and like how do we make the investors whole, this whole scandal is predicated on the fact that investors were defrauded. They lost their money because the money was misused.
That's the core allegation. That's the crime, right? Right.
So the injured party is the investors. Correct.
Or the users of FTX who had their funds on there. Right.
But the people whose money was taken by FTX. But the lawyers wind up with a billion dollars? Yeah.
And then all of the individuals, lawyers that we've hired. But why would they get a billion dollars? In bankruptcy, the lawyers typically make out, the bankruptcy lawyers make out phenomenally well.
They kind of have indiscriminate ability to do whatever they want. You're acting like that's normal.
This sounds like a disease. Bankruptcy law is wildly horrific.
And it benefits just the parasites, the lawyers.

Correct.

And they also have the power to intimidate a lot of people.

I mean, a lot of people aren't speaking up about the FTX situation because they're still waiting to settle with the bankruptcy estate.

And so the bankruptcy lawyers in conjunction with the government keep everyone silent.

And by the way, as you just said, no lawyers were indicted.

So like all the hyenas are on the same team, it feels like.

Thank you. Everyone's silent.
And by the way, as you just said, no lawyers were indicted. So like all the hyenas are on the same team, it feels like.
Yeah, it's a systemic issue that, you know, I don't know how it gets addressed. So how involved, again, my knowledge of this is just purely from stupid wire stories on it, but how involved was Sam Bankman Freed's family in this? Very involved.
His mother was only involved on the political side. How was she involved in the political side? She ran her own political organization.
I think it was called Mind the Gap. And then his father was involved in the company, was part of hiring lawyers, was part of advising on tax treatment.
You know, yeah, his father was heavily involved. So the mother was using FTX money to help Democratic politicians.
Correct. But that's not a campaign finance violation.
I don't know what you want me to say. It's just, it's so, it's just great.
Just parenthetically, it's just one of those stories, and I've seen so many in 30 years, where you have these perceptions because you don't really know anything beyond what you saw in a headline or in the first four graphs of the New York Times story. And then when you press a little bit into the details, it's something totally different from what you thought it was or what you were told it was.
And it's like a complete scam that benefits the same people always. You know, the lawyers, the Democratic donors, the Democratic politicians, and the people.
And, you know, a tragedy like this, tragedy for the investors, is hijacked by these institutions for political reasons.

I mean, that's what I see after talking to you this morning.

Yeah, it's, yeah.

No, it's terrible to be a part of. I mean, you're losing everything at once.

And then, you know, this whole narrative is being spun up around you that you have no real control over.

And then it just becomes your reality or you go crazy.

I'd probably go crazy.

I'm bordering on it.

I think you're following my ex post.

I'm right on the edge of sanity.

So, and tell me, and then I want to ask about your life and how you wound up in all of this.

But Gabe Bankman-Fried, who's he?

Sam's younger brother.

Yeah.

And he was actually the one who introduced me to getting really involved in politics. He was running a pandemic prevention initiative that was actually, it was a decent idea.
You know, COVID was ridiculous. The shutdowns were insane.
The whole way it was handled was wild and not great. But what we saw was like a single, you know, thing created anywhere in the world will just spread everywhere.
And we are clearly not prepared for anything of the matter. So a real biosecurity threat, the government's not prepared for.
And, you know, COVID was, I think, a joke. And I'm sorry to anyone that lost anyone, but for a global pandemic, COVID was as light as it's going to get.
But that doesn't mean there's not the potential for an actual bioweapon.

That's for sure.

And so his initiative was to sort of put in place preparations for that now, get testing of future

vaccines now, create sort of ways in the United States, not externally, to prevent these sorts

of things going forward.

That seems like a fine idea.

It's a brilliant idea. There was hundreds of millions of dollars of unspent

Thank you. sort of, you know, ways in the United States, not externally, to prevent these sorts of things going forward.
It seems like a fine idea. It's a brilliant idea.
There was hundreds of millions of dollars of unspent COVID dollars that were just sitting out there. This was a great use for them.
You know, they'd already been allocated. It's not new spending.
It was a brilliant idea. And it really, to me, it was very, it was real altruism.
You know, there's a lot of people that do a lot of fake altruism. Like this was a great idea.
So this is actually what drove a lot of my Republican giving. He sort of got me excited about helping with this from the Republican side.
So, and then that was all twisted. I mean, that was all turned into, I was only giving to push crypto policy in the United States, which is just not the case at all.
Oh. Was he political?

Yes.

Yeah, yeah. He had a whole team.

There was a massive team of strategists,

of campaign finance experts,

of everything, lawyers.

Was he a partisan?

No one's...

Not really.

They're associated with the Democratic Party,

I think because he was because of his mother,

but they're just strategists.

Was the mother partisan, do you think? Yeah. Yes.
Yeah. Pretty liberal.
Yes. I mean, they're West Coast, Stanford.
Yeah. And just, I've never met Sam Bankman-Fried, but I look at that guy, I'm like, you've got liberal parents.
Yeah. There's no doubt about it.
Yeah, for sure. There's no doubt about it.
Okay. Amazing.
How did you get involved? What's your background?

How did you get involved in this?

The whole company, you mean?

Yeah.

Yeah.

So I started at Ernst & Young as a tax accountant at a college.

Really?

Yeah.

Yeah.

I got incredibly excited about Bitcoin early.

But you were a tax accountant?

I was a tax accountant at Ernst & Young.

Yeah.

Wow.

That seems like a very non-zany job. Polar opposite, really.
Yeah. No, I went to UMass Amherst and then fell into accounting there because I was good at it.
And then, you know, fell into the job at EY because I had sort of, I work hard and push myself forward.

Yeah, but I found and discovered Bitcoin and I fell in love with it.

I thought it was one of the coolest things I'd ever discovered.

I thought, you know, in a world where trusting people doesn't always work out, as I've learned, trusting math does work.

And the whole system is built on math working.

So I thought it was amazing. I mean, it's a global transfer network that works as long as math works, that can't be sort of perverted in its base core.
Brilliant. I thought it was incredible.
So I started publicly talking about it on LinkedIn. This was the time LinkedIn was becoming a big deal.
And a crypto company in Boston that needed an accountant found me and asked me if I'd go work for them. What company? Circle.
So they run USDC now, which is a stable coin. They're one of the sort of older stable coin companies.
And they were one of the original companies to have an app that you could buy Bitcoin, like a sort of Venmo. Yes.
But that was, I think, 15 or 16. So you go to work for them as an accountant? I go to work to them as someone who's bridging the trading desk and the accountants.

So the accountants have no idea what the traders are doing because they don't really understand crypto or sort of looking at the network very well or the exchange data.

And then, you know, the traders don't want to deal with the accountants because they're making a boatload of money trading.

No one cares.

Of course.

Everyone makes fun of accountants.

Right.

So I bridge the gap between those two.

I helped them sort of reproduce a full record of transactions that had happened starting in January. It was an absolutely insane amount of work.
But the trading desk was pleased because then they could pass audit. And they brought me on the trading desk full time.
In Boston? In Boston, yep. And then they moved me to Hong Kong because it's, uh, crypto markets are 24-7.

So they moved me to Hong Kong to, uh, sort of run the, not run the desk, but work on the desk overnight. And that's where I eventually met Sam.
How did you meet Sam Bankman-Fried? Sam was at a conference and he was, it was just Alameda Research at the time. And he was, Alameda Research was headlining the conference with an exchange called Binance, which is the biggest crypto exchange.

And no one had really heard of Alameda.

But for Binance to be willing to headline a conference with these people, they had to be a big deal.

Because Binance is not going to let some small, irrelevant firm headline a conference with them.

And so I saw Sam speaking on stage.

I got a meeting with him.

And just, you know, I knew he was going to be successful. What'd you think of him? He's, I mean, he's brilliant.
He, you know, he's autistic, sort of very autistic, but all he wanted to do was work. What does that mean autistic? He, social situations are harder for him than the average person.
He doesn't sort of, I think he doesn't have an emotional spectrum that most people have. Yes.
Um, he, you know, eye contacts, difficult, uh, things like that. Sort of the, the, the human elements of the world don't make a lot of sense.
The internet, digital, uh, you know, money-making math world is all that makes sense to him. And you said he's a hard worker.
24-7. Slept on a beanbag.
We used to have to tell him to go shower because he would start to smell. We would buy him new shoes when they'd wear out.
The interesting thing... How did he respond when you told me he had to take a shower because he stunk? He's fine.
He knew he couldn't do these other things. And sort of, you know, people took over.
There was almost like a... Really? Like a brotherly feeling for...
You feel a little bad for him when you meet him. Yeah.
Initially, just because you know it can't be easy living like that. You know, you're brilliant in one world, but you don't understand.
You just forget to take a shower? Just didn't care. Interesting.
Yeah. All he wanted to do was work 24-7, it's it's like he needed it to keep going privacy is not an option it's a human necessity it's at the core of freedom no privacy no freedom if you can't have privacy you are owned by someone else you're a slave and so the question is who has 2024 more privacy? The average American or the average North Korean? Well, unfortunately, because of technology, in many ways, the answer is the average North Korean has more privacy.
The average North Korean is being monitored less than you are. And the reason is really simple.
You're carrying around a phone and a laptop and the government and big tech can and do track both of them endlessly. Again and again, we've seen that companies and governments are not afraid to use the data they glean from you to manipulate you.
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Did you get, once again, I've never met him, but watching video of him, he seems like he's on Adderall or something. He seems impaired by pharmaceuticals in some way.
Yeah, he had a very strong antidepressant patch. I believe it was called an MSAM patch that he would put on his shoulder.
And then there was Adderall around the office, modafinil around the office. What's modafinil? It's like a kind of like an Adderall, slightly different Adderall.
I think it was used by like war pilots to stay awake or something like that. Yeah, there was a ton of that stuff.
It's very common in the tech world. A lot of, you know, most of, I would say most the generation sub-30 has a bunch of friends that need Adderall to operate.
Really? Yeah. There was a time when it was handed out like candy by doctors.
I mean, they're still attempting to put most kids on Adderall, I think, that show any sort of inability to sit and focus 24-7. So Adderall is, if you've sort of worked in companies in the tech world, Adderall just doesn't seem strange.
I'm not saying it's a good thing. It just is.
It's math. I mean, it's chemically indistinguishable from math.
Yeah, but they gave it to kids. I mean, they were giving it to everyone.
When I was younger, they tried to put me on Adderall. And my parents, thankfully, were like, no, he's just a little boy.
He's just got energy because he's a boy. But it has all kinds of effects on the brain that, some are positive, more mental acuity, focus, sharpness, all that stuff, energy.
But some of them are very bad over time. Yeah.
Did you notice the effects? I didn't. I've maybe taken it once or twice.
No, but in the office, if you're working in a world where people are, you know, everyone's on speed all the time, people get jumpy, paranoid, have trouble maintaining focus paradoxically. Yeah.
I don't know if I know. I mean, Sam was always odd since the moment I met him.
So maybe he had sort of had a long-term use of it. But no, I don't think I noticed that.
I mean, there was so much work. There wasn't a lot of like communicating around the office.
It was just sort of 24 seven jamming keyboards, answering things online. I mean, we always at every minute in time for a year, I had 80 hours worth of work that could be done.
Wow. I mean, it was, you know, it's a 24 seven market.
You got someone like Sam was working 24 seven. Um, you can't hire fast enough.
Um, the people you do hire get burnt out immediately or, you know, decide they don't like it. If you take time out of your day to hire, there's now a pile of work that's piled up that you haven't done.
Um, yeah, I mean, there was a couple months early on being there that I don't think I saw daylight.

Every, you know, I'd leave in the dark and come back in the dark seven days a week. Um, it was fun though.
You're building like a phenomenal, amazing company in this cutting edge industry. The market's taking off.
So people are, you know, getting wealthy. Um, it was fun.
I didn't, I didn't even think of it. I'd look at the calendar and say, oh my God, you know, 60 days have gone by.
So what about him when you saw him on stage made you want to meet him? He was speaking honestly. So a lot of people when they present, I mean, you don't know this because you seem very honest on stage, but a lot of people when they talk on stage don't tell the truth.
They sort of parrot. That's for sure.
That's for sure. They parrot this narrative that isn't real if you're actually in industry.
So you go to these crypto conferences and people get up and say these ridiculous things, you know, aren't true. Sam got up there and told the truth.
He said, you know, this company's good. This company's product doesn't actually work.
Yada, yada, yada. He would just say that up on stage.
And I thought this is great. Well, I agree with that.
That is great. Yeah.
So you go meet him. He hires you? He was reluctant to hire me because I was, I think at the time, more useful for him at Circle.
So I was still at Circle. We were doing some OTC trading with his OTC desk, but I eventually...
What's OTC? Over-the-counter trading. It's just large blocks that don't hit the exchange.
You just lock in a price. You message someone and say, hey, I want to buy 100 Bitcoin, sell 100 Bitcoin.
They give you a price. You agree or don't agree.
And then it moves to settlement. That's what I was doing at Circle.
And then I eventually got Sam to hire me to run that at Alameda. I had also purchased a lot of his FTT token, which I think helped.
So he had launched a token for the exchange he was going to build called FTX, um, sent it out to see if people wanted to invest in it. And I was, I purchased a large quantity of it.
How much? Um, I, God, it's like 6 million tokens maybe at the time. At what valuation? Five cents.
Where'd you get the money? I made, yeah, I just held crypto for a for a while. And I'd made good money at Circle as well.
So you get hired by Sam to do what and where do you go? So I'm in Hong Kong. He had recently moved to Hong Kong.
I get hired to run the over the OTC desk for him. And that's what I did.
For how long? My job constantly changed there. So I think I probably ran the OTC desk and I had, you know, at a startup, you pick up as many jobs as you can, right? So sort of anything that's lacking, you try to help out with.
So I ran the OTC desk, but I was also helping, you know, get customers on FTX, customer support for FTX when people had issues. You know, I was involved on the banking side because I had the relationships.

You know, a lot of these nerd type characters don't speak to people well, and I did speak to people well. So I took over a lot of the relationship-based work.
You were the designated

talker in the office? Yeah, yeah. I was sort of polar opposite of all these people.
Yeah, so I took over a lot of those responsibilities. I worked, I was about a year in that position, and then I was totally burnt out.
I'd made a lot of money with FTT going up, and so that was the first time I went and tried to quit or sent in a resignation letter. And what happened? Sam sent me back this sort of incredible letter about how he didn't want me to go i could do whatever i wanted basically you know if i'm working too much drop some of the responsibilities um i told him no i was still leaving but then i went in to have a meeting with caroline actually and she started crying um that i was leaving and it i don't know it was very very sad.
You know, she was working 24-7.

I think she knew if I left,

she was going to have to take over all my work.

I'd never seen her cry before.

And so she started crying.

I said, fine, you know what?

If you can stay and do this,

I can pull it together and stay and do this.

So I didn't leave in 2019.

I tried to cut back the work.

You've had some time to replay this in your head.

Oh, God.

I'm sorry.

Yeah. Yeah.
All of it. Yeah.
I tried to pare back the work I was doing, but it's hard, you know, it's, if you care about something, it's hard to, to do less. You know, you know, things are being dropped.
You don't want them to be dropped. So you, you know, try to do them.
Um, yeah. What was Caroline Ellison like? She's an interesting person, you know, the, what are they all like? So first off, the effective altruism, which we haven't touched on yet.
It is this very like Silicon Valley, West Coast, elite parent concept that you, this group of people have that they're smart enough to solve basically all the world's problems. And the best thing you can do with your life is work as hard as possible to give all the money away, which on paper doesn't sound terrible, but there's a lot of things on paper that don't sound terrible that are in the real world, like socialism, for instance.
So that's the EAs. And that was the center core of the company.
That was Sam, Caroline, Gary, Nishad were effective altruists, and that's what drove everything in the company. That was the center nucleus.
Sounds like a religion. Cult.
Cult, religion. Yeah, very much so.
So work as hard as you can to make money in order to give it away. Yes.
To these big brainy ideas that, you know, AI or pandemic was, I guess, one of them. But not to the housekeeper.
Correct. Correct.
I don't even know if they value individual life that much, to be honest with you. It's a weird, the effective outburst thing was weird.
I hated it. Why? Aren't you a good person? Yeah, yeah, yeah.
But there's, no one's smart enough to solve all the world's problems. And the moment you think you are, you're the problem, not the solution.
Yeah, that is deep. And probably nothing truer has been uttered today.
That is absolutely right. The moment you think you are, you are the problem.
So how did it manifest itself, this effective altruism? Well, you always knew it was the sort of guiding light of the company. And if you weren't an effective altruist, you were never on the inside, really, right? They were sort of in charge of everything.
And you sort of orbited around, everyone else orbited around them, I guess is how to describe it. And would they talk about it? They would a little bit.
If you were there at like 2 a.m. or something, you know, they would be having a conversation about it.
Yeah, they love talking about like weird, weird things like that, like AI taking over the world or all those sort of things. Were they for AI taking over the world? They were.
Well, so there's different factions of EA I learned. Some are concerned about it.
Some are welcoming it and want it to happen sooner. Yeah, I do.
Yeah. But the core idea is were the elect, were the elite, were the people smart enough to fix the world's problems? Correct.
How are they going to, what problems are they going to fix and how are they going to fix them? That's a great question. So AI came up and was a big one a lot.
Caroline had this nutty, you never know it's true if they're saying these things or they're just saying them to hear themselves say them. But she had this thing where she was convinced AI was going to take over the world and it was best to appease the ai lords now so in the future they won't kill you when they kill off all the rest of the humans um so this is thing she'd say like who are the ai lords i don't know you're talking about someone that avoided this as much as possible but i was just occasionally sitting there i mean really uh yeah? Yeah.
So this is a theology, obviously. Yeah.
I think cult is the only way to describe it, really. So you have to appease the AI lords so they don't kill you while they're killing everybody else.
This is one of the nutty things that they would come up with. Yeah.
Did SBF agree with that, do you was definitely, yeah, he was a, this extreme effective altruist. I don't know how he felt specifically about some of the weirder AI things.
Um, was he in a personal relationship with Caroline Ellison? Yes. It was very, it was kept very quiet for a long time.
Um, but then, you know, I knew her roommate at the time and he told me that they are in a relationship. But it's like not a relationship like what you're thinking of.
I mean, these are people that only cared about working. You know, no one's going on dates or having like- Long Sunday mornings in bed.
Yeah, none of that stuff. It was when she had an infatuation with powerful men.
She blogged about it a lot. She always wanted to be around powerful men, and so I think she saw Sam as a powerful man.
He was a powerful man. Yeah, yeah.
And so she wanted to be around that. One thing we bonded over, I love the musical Hamilton.
I don't really like musicals, but I think that they just did a phenomenal,

I don't know if you've seen it.

No.

No, it's Hamilton's great.

They did a phenomenal job with it.

And she always used to quote

that she just wanted to be in the room where it happens,

which was like this Aaron Burr scene.

You know, he's singing,

I want to be in the room where it happens.

And so that she always identified with that.

She just wanted to be in the room

where the important decisions were being made.

Oh, she was a power worshiper. Yeah, she was a power worshiper and very open about it.
Really? Yeah. Like I'm a power worshiper? She blogged about it all the time.
She would write these sort of blogs online. They were public.
They were part of SPF's trial and case. And so, I mean, the Daily Mail among other, the lower forms of the media ecosystem, made a big deal out of the sex lives of everyone at FTX.
They're like living in community. It's group sex.
No, no. There's no way.
I mean, I didn't live with them, but I knew there's no way. No way that they were having crazy group sex.
No. I think the Amish were probably having more fun than what was going on in that penthouse.
Good. Well, you're making me feel better because I don't want to be catty about it, but you did see some of the players and you're thinking they should not be mating.
No, yeah. Yeah.
I mean, I think part of being this sort of West Coast, you know, enlightened thing is like polyamory is an okay idea, right? They try to wrap themselves up into that because that's the cool sort of elite, intelligent thing feel yes but none of that was going on there a lot of them had monogamous relationships they did all door there were about eight people i think in the in that penthouse um but no you know the media grabbed all sorts of fun headlines because that's what it does and runs with them i mean that's what media is now right now, right? It's just grabbing totally good headlines. You know, a lot of the story, and I want to caveat this with a ton of people got hurt, lost their lifesaver.
Over a million people. These are normal people who don't have a lot of money, who are trusting it all in FTX.
So I want to caveat with everything I'm saying here, you know, what FTX did and what happened to people is horrific. And I have to live with that every day.
But a lot of the story has just completely been fabricated or made up. Did you ever go to the penthouse where they all lived? Yeah.
So Sam, I was first in the Bahamas. So we didn't get to the second time I tried to quit, which was 21.
I finally said, look, I'm finished. I'm working too hard again.
I have some money. I'm going to go enjoy my life.
I'm 27, I think, at the time. I was in Hong Kong at the time, and I was like, I'm done.
And I keep blaming the lawyers, but again, I go to the lawyers and I tell them I'm done. And they said, well, can you do us a favor? We know you still care about the company, which is true.
But the you know, the Bahamas had recently launched the DARE Act, which was, you know, sort of a revolutionary digital asset regulatory framework. It was a better jurisdiction than a lot of the sort of other jurisdictions that do that.
It's not considered an A+, but it's not, you know, sort of a terrible jurisdiction. Right.
You know, they have a real regulatory body. It's not as sophisticated as, you know, a European country or the U.S.
or Japan, but it's not nothing.

But the CEO needs to live in the country to be regulated there. And at the time, there was absolutely no way Sam was moving the company to the Bahamas.
So why? It's an island nation. It has strong sort of, you know, they don't want you importing labor.
They want you hiring locally. There's not a lot of housing.
It's an island. Small island.
Small island. It's, you know, there's not 24-7 food options.
There's not, there's none of the infrastructure in place to run an actual large international organization out of the Bahamas. It was impossible.
It was always going to be impossible. But that was not the plan.
The plan was I was going to go there, run a small sort of shop. I hired some local people, did some philanthropy there, went through the regulatory process in the Bahamas.
What's that like? It was fine. So we were working with the regulators to sort of educate them as well.
They were eager to really understand and learn about the technology, and they were slowly adapting and building out the framework. But it felt real.
It wasn't just sort of, you know, this rubber stamp. Like, they wanted to know what was going on, how it was being operated, what the different components of crypto were, how it was changing.
you know it's seen I think to the world is like this fake sort of place in regulatory environment, but it didn't feel that way at all. Like, you know, we were educating, they were putting in place standards, they were trying to make them workable, but also monitor.
But I'm only there, I'm there about two months. And I'm basically, I'm quasi-retired.
I'm working like two hours a day, you know, we're doing the philanthropy stuff. I'm getting it all settled there.
But everyone else is in Hong Kong running the company during business hours there. I'm free.
And I'm having fun. It was a great place to live.
I was in a beautiful community. Yeah, it was great.
And then two months later, Sam visits. I'm sorry, I should have asked, what's your job title at this point?

I'm CEO of FTX Digital Markets, which is the Bahamian subsidiary.

Titles didn't have a lot of meaning at FTX and Alameda.

They were kind of tossed around like candy, to be honest.

It was, oh, you either you work hard or you don't.

Your title doesn't matter.

You know, as I write a laundry list of regrets, accepting a title that had no actual, an important title that had no actual real meaning at the time is one of them, for sure. But Sam visits and decides to move the entire company there, basically overnight.
He wants to import hundreds of people from all over the world into the Bahamas to build out a headquarters there. I tell them it's not possible.
First off, people aren't going to be happy, right? These are people leaving cities, vibrant cities. Most of them are young.
Some did have families, but they want a social setting where they can go out to a nightclub or go out and meet people at whatever they do. The Bahamas is quiet.
You're not going to get going to get that. Um, so you're going to get, they call it Island fever.
Um, so I told Sam it's impossible to move the company there. Nothing was ever impossible in Sam's mind.
You know, it was just like, let's get it done. Um, and so all of a sudden I'm back to working 24 seven only now I'm working in like the real world.
We're buying condos to house people in. We're, you know, bringing in people to cook 24-7 so there was food available.
We're modifying the structure of buildings to house more employees. Yeah, it became mayhem.
How much do you think FTX spent on real estate in the Bahamas? Half a billion to maybe 750. Million? Million.
How could you spend $750 million in the bahamas on real estate i mean there so there's two types of real estate basically there's very little middle class in the bahamas you have sort of this ultra wealthy section of the island which is mostly people from foreign countries avoiding taxes and then you have sort of the impoverished section which is um downtown nassau which is downtown right um we couldn't put employees in downtown Nassau. And so the available housing was extremely limited.
We also were worried about security and food and all these various sort of things. So we ended up pivoting towards one of these sort of large, very wealthy areas called Albany.
They knew we were buyers of a lot, so they would up the price very quickly. I actually begged, at one point I begged Albany to stop selling Sam real estate, but they just obviously ignored me because they were making, you know, an insane amount of money.
But a house in Albany might be worth 40 or or $50 million. $40 or $50 million? Yeah.
Yeah, condos were, I think, $15 to $30 million on average. Oh, so it's just totally fake money at this point.
Like that FTX and Alameda are spending? Yeah, I mean, if you're spending $15 million on a condo in the Bahamas, I mean, that's just absurd. It's untethered from physical reality.
That should have been more of a red flag. I mean, I can try to justify it.
There's not great justifications. We made just so much money at Alameda when I was there.
I mean, we made unfathomable amounts of profit at Alameda that relative to what we'd made at the time that I was aware of, that didn't seem that crazy. In hindsight now, it's absolutely effing ridiculous.
Excuse me. Yeah.
But, you know, when you witness a company make two to $3 billion in profit in a year, it just didn't seem, you know, sorry, it shouldn't have been happening and I didn't want the company in the Bahamas in the first place. So there's that, but it didn't seem crazy that that money was available to be spent.

On the basis of like what was

if you pardon a dumb question

what was the money for?

Like what were you providing

that you were making

two billion in profit in a year?

Yeah you were buying and selling crypto.

I mean you know

you can look at some of the large hedge funds

what value does Ken Griffin provide?

What value does Ken Griffin provide?

Well he moves the Republican Party

toward endless war

I'm concerned, Ken Griffin provides negative value to the world. But the trading community makes...
I'm sure I'll be indicted at some point for saying that, but I think it... The trading community makes a lot of money.
And, you know, what is the purpose of buying and selling all day long? I don't know. Yeah.
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When I was a kid liberals who have disliked my whole life i'll just say that but they used to say like we live in a world where you know teachers and carpenters don't make any money and i would go shut up but now i'm sort of like a little bit more sympathetic to the idea that i don't know your society should reward people who do useful things. Yeah.
No, I'm not. I'm not knocking that.
I'm with you, but we were, the money was coming in. Right.
And when you're in the middle of it, it's hard to ask the meta questions because you're in the middle of it. Right.
Yeah. Right.
It's interesting though. So they, I mean, did you think it was weird that you were making that much money profit? I mean, that's more than General Motors makes in profit.
In crypto, though, it's not uncommon. You know, it had become the norm to be in the crypto industry and just see people become phenomenally wealthy.
So is it normal in the real world? No. But in crypto, you know, there are 16-year-olds that made $100 a lucky investment.
Um, there's so much money sloshing around in the crypto ecosystem all the time that no, it didn't, it didn't. So I'm such a primitive person that I don't trust anything digital.
So if I made, you know, a hundred million dollars in crypto, whatever that is, I would immediately cash out and buy like stuff. Yep.
What'd you do with the money that you made? Basically, everyone kept it. So I had been given some advice that was very good advice, and I didn't follow towards the end.
But, you know, if you keep the money fake online, then you don't sort of get wrapped up in this world of being wealthy. And so a lot of people just keep, you know, there are people that are like living in a beanbag with $50 million in crypto.
And it's sort of fake as long as you leave it in crypto. So I left most of it in crypto for a long time.
You know, 19, 20, 21, it was, wasn't until I moved to the Bahamas really that I started to want to cash out and, you know, get more involved in real world things. So what did you buy in the real world? Yeah.
Um, I bought, uh, some restaurants. So during COVID, I bought some restaurants back in the home, my hometown area.
Um, I knew some people in New England, in New England, the Berkshires, um, you know, they were going to close. I had friends that worked at them or family that worked at them, um, and wanted local ecosystem there.
That's kind of cool. I bought some, well, yeah, now everyone, anyway.
I bought some condos in the downtown as well, because a lot of people were turning them into Airbnbs. So people didn't have a place to live and it's a very small downtown.
It's like two blocks of a scenic town in Western Mass. Airbnbs really wrecked the United States.
Yeah. I can say.
Especially small town living area. Especially small towns.

Yeah.

But I kept them all apartments.

We fixed them up.

A lot of them were old buildings.

I had a buddy that was super into SpaceX.

And so we bought some of the properties that were really close to the place in Texas

that Elon created.

And we're turning them into,

you know, we just talked about,

we're turning them into Airbnbs

for watching the SpaceX stuff, which was going pretty cool. Wow.
And some rental properties in New Hampshire. I did buy, I bought a nice car because there was a, there's a race that you can do.
It's like a five day, it's called the Gumball. And a buddy of mine was doing it, but you had to have a nice car for it.
The Gumball still exists? Yeah. Yeah.
It was very cool. Well, that's a cool, will you describe it for people who don't know what it is? It's basically a luxury car race.

Across America. Across America or across Europe and all over.
They did Middle East last time,

I think. And yeah, you start in one area and for five days you drive to the next area and then

have some event with everyone else who's doing it. So we started in Canada and then drove down.

And the idea was to get down to Florida, but Michelle and I stopped halfway through.

What kind of vehicle do you do? So we started in Canada and then drove down. And the idea was to get down to Florida, but Michelle and I stopped halfway through.

What kind of vehicle did you drive?

A Porsche.

I actually bought, here, I'm going to make myself sound real stupid right now.

I accidentally bought an electric Porsche first.

So the Porsche Taycan, they don't say electric on it.

You know, most EV cars or electric cars, they say electric.

I stupidly bought an electric car, which you couldn't use for gumball. No, not for a road rally.
No, I know. It doesn't, not a great look for me, but, and so I ended up with a 911 for the road rally.
Was it fun? It was fun. Yeah, it's fun.
I'm not, yeah, it's fun. I don't know.
I'm not into luxury purchases as much as- Apparently you're not. If you're buying condos in the Berkshires and rental properties in New Hampshire, then you didn't spend it on hookers and cocaine.
No. No, I mean, we partied.
I had some fun. I mean, that was another big problem for me, I think.
Like, on the backdrop of the hyper EA nerds that never left the office, like, I'd go clubbing. You know, I would have a party and we'd drink and have fun.
So I did send some, I spent money on having fun for sure. Not hookers and cocaine, but- But you're an accountant who started at Ernst & Young and you were on the zany edge of the office.
Well, I was at Ernst & Young. No, no, no.
At FTX, like you were one of the more social people there. Oh, but night and day.
I mean, I would be the most social person at the beginning. So if the accountant is the craziest guy in your office, you've got a pretty subdued office.
Yeah. It was just people that had this weird EA.
They were working 24 seven and then that was it. Yeah.
Did you hang out with them at all? A little bit. I like to hang out with different types of people.
And so I would, I would hang out with them. Um, Caroline used to do these things.
Um, God, I don't even know if I should admit this. She would do these things called LARPs, live action role plays, where she would write these scenes that were occurring and then she'd make a character list of different people and she'd assign a different person like a role.
And your job was to sort of just flow around and figure out like what your objective was in the game.

It was weird, but it was kind of fun.

It was really amazing that Caroline could write these.

But fully clothed.

Yes, fully clothed.

Yeah, and I was probably the only one drinking or like two of us were having a drink.

Wow, she would write live action role plays.

Like what?

Yeah, nothing I ever would have done in my life.

Did you ever, were you like the naughty nurse or like how did you, what was your role? No. What was one of them? I don't even remember what they were.
I don't like, it was nutty. It was weird, but I would do that.
That was like once or twice, you know, Sam would do these events at his apartment where he would like cook the shittiest vegan food I've ever tasted in my life. So I would do that once or twice.
But it's just not my scene. You know, they're playing board games and I don't know.
It's just not. Sounds like the weirdest office culture ever.
It was bizarre. I mean, it's a little tech world though.
I think the tech world is a little strange in that way. But this, having this EA component as well made it even weirder.
Yeah. How did they treat, you said when you were describing effective altruism that they didn't care about human life or people.
How did you reach that conclusion? Everything's EV or expected value. And I want to blow my brains out every time I hear that now.
But every decision is EV. So what is the expected value of this situation? And I think actually, what does that mean?

I think Kaplan touched on this a little bit during the sentencing with Sam.

You know, it was if you could flip a coin and there's a 51% chance that, I don't know, everyone lives happily forever or a 49% chance that everyone dies.

Evie, flip the coin.

Right.

Whoa.

That's a very extreme.

Sorry, I'm taking a very extreme example.

Yeah. or a 49% chance that everyone dies.
EV, flip the coin, right? Like that kind of, that's a very extreme, sorry, I'm like taking a very extreme example, but it's constantly looking at- Calculating the likelihood of benefit. Correct, correct.
And making decisions based off that. And Sam did it for everything.
You know, Michael Lewis touched on this a little in the book. Yeah, Sam did it for everything.
It's not for running, Yeah. For running a company with proper structure, it's not terrible.
Like it's a good way to make some decisions. For sure.
You can't run everything like that though. Yeah.
No, it's important to calculate likelihood. Right.
I think. But I mean, the acid test for decency is how do you treat the people you, you know, who are dependent on you, who you control your, you know, how do you treat your treat your housekeeper yeah and how did they do by that measure they just wouldn't interact with the housekeeper would be the only oh really of yeah they're yeah i didn't really interact with like many people like interaction wasn't their thing did they it's interesting because they're all politically liberal obviously and the bahamas is a poor majority black country were they doing a lot to help the majority of poor people in bahamas no i did a lot of philanthropy in the bahamas when i was there so um i think you know everything gets twisted with this terrible light now but we were doing a lot you know we did a toy drive during the holidays uh to some of the islands that were hurt during dorian i fell in love with the bah Bahamas.
I fell in love with the culture there, the people. Nice people, for sure.
Incredible people, incredible positive attitude. Yep.
You know, optimistic. I loved everything about sort of being in the Bahamas.
Yes. So I did some philanthropy work there, but the company really didn't do a lot there.
So there was an FTX foundation that was doing more in like the US that actually Joe, Sam's father ran Joe Bankman. And then Sam had this sort of big brain EA stuff that he was focusing on as well, which is your AI.
AI climate, was that a big... Climate wasn't because climate was getting enough attention.
So part of the EA thing was also very important things that weren't getting enough attention. And climate got a lot of attention.
So this was their explanation for why. So AI, what else? Like what were the other problems? The pandemic sort of was rooted in that.
Those are the two that I remember. Yeah.
Did you ever get the sense that they were helping anyone? That's a good question. There was an issue.
So, Nishad and Sam had an issue with, so if your idea is make as much money as possible to give it all away, when do you start giving it all away? Right? After all of your desires have been sated. So, Nishad thought, look, we've made enough money.

We've made a lot.

Let's start doing some of this actual EA stuff.

I think in Sam's mind, he hadn't even begun making money.

I know it sounds crazy.

It does.

He's a billionaire, but he's not rich enough to actually give it away.

Correct.

I think he always, you know, we never celebrated milestones at the company.

Like, when something was achieved, Sam treated it like it hadn't even begun. There was no sense of achievement ever.
You know, I would host some celebrations when amazing things happened and Sam would reluctantly get involved for a few minutes. But in Sam's dream world, you never, there was no celebrating.
Nothing was ever done enough. Always more could be done.
so what kind of childhood do this guy have you know

his mother wrote a letter

where

she was ever done enough. Always more could be done.
So, you know. What kind of childhood did this guy have? You know, his mother wrote a letter where she talked a little about how he doesn't feel happiness.
She doesn't think he's ever felt or is capable of feeling happiness. I don't know.
Michael Lewis talked a little bit about his childhood. I never talked to him about his childhood or anything like that.
Did you ever deal with his mother? A little bit. She's more similar to Sam, I think.
I'm not the type of person she enjoys being around. I don't want to sit down and have a four-hour intellectual conversation where I try to prove that I'm smarter than you.
That's not my idea of a good time. We'd interact, but I think she didn't love social settings or at least someone someone like me.
So not much. She sounds awful.
Yeah. I didn't know her that well.
You know, it's, she's like an ethics professor and her son goes and does something like this. I mean, you gotta, you gotta have a few question marks there.
Yeah, I think you do. A lot of this was playing out against the backdrop of the 2020 election.
Yep. So what did, what do they think of Trump? What do they think of Biden? His mother was very involved in getting Biden elected, I believe.
We'd heard, I'd heard stories about it. The,

yeah,

I think her,

I think mind the gap did a lot and don't,

I might be wrong on that.

I think mind the gap did a lot in Georgia that ultimately flipped it blue for Biden.

Oh,

so yeah,

I think that's true.

I'm not a hundred percent sure.

Mrs.

Bankman freed the ethics professors using money. I mean, cause she's not independently rich, right? No, I don't, not, not 100% sure.
Mrs. Bankman freed the ethics professors using money.

I mean, because she's not independently rich, right?

No, not what Sam was.

Right.

Did any of Sam's money go to that effort, do you think?

Yes.

Yeah.

I think Sam wired $10, $20 million, maybe more.

Interesting to get Biden elected,

but he's not facing any campaign finance charges. No, he didn't get hit with the campaign finance.
This story, man, you get into the details. What did they think of Trump? They did not like Trump.
Um, they had this wild idea to try to pay him off to not run. Um, and I just said, I don't want to be a part of that.
Wait, what? They, quote in some news. They had this idea to try to pay him $5 billion to not run.
Who's they? Him and his brother, Gabe. And there was like more of these sort of EA political strategist people.
That would be election interference and bribery as far as I know. Yeah, I wasn't involved in it.
Are they facing charges for that? No. Oh, because I think in a first world country, bribing people in the political system, including not to run, would be a felony, like a major felony.
That would be subverting democracy, I think would be the term we'd use. Yeah, that makes sense.
Yeah, but no charges there. Yeah, interesting.
Were you aware of that at the time? It had come up and I just said, I don't want to be a part of this. Please.
I also wanted him to win. So I'm not, yeah, I want him involved.
Did they know that you disagreed politically? Yeah. Yeah.
I mean, that was part of, I don't want to make this out like I had no association with them at all. Like Gabe got me excited about the pandemic work.
Right. And so I got involved on the pandemic work.
Yeah, that's not illegal. But so I was aware of some of the stuff that was going on, but not most of the behind the scenes stuff.
Right. I wasn't an EA.
I was never in the EA world. I even sort of publicly mocked the EA.
So you really didn't like EA. I didn't.
There were a few of us that really didn't. The only thing I liked about EA was it would bring workers in that worked 24-7 because they had a higher purpose.
Like there was a higher purpose to why they were working. And so they wouldn't get burned out as easily.
So that was the only thing I liked. When EA started working, they worked 24- worked 24 7 365 it's just the personality type seems so kind of classic early bolshevik to me yeah yeah you know yeah i mean you're you're you're bringing about utopia in the world so actual people don't matter you're involved in something much larger than yourself so So it gives purpose and a framework to your life.

Yeah.

It inspired, I mean, the early Bolsheviks worked like animals.

I mean, they did to their great credit.

I mean, they were really hard workers.

Yeah.

And when it's written on paper,

it doesn't sound as bad as it turns out.

No, right.

Well, that's exactly right.

As you noted, socialism doesn't say, you know,

everyone's equal.

What's wrong with equality?

Nothing.

I mean, even Sam's whole thing,

like on paper, it all sounded fine. In the end,

millions of people lost all their money.

Right.

Better than the Ukraine famine, but still,

it's a branch of the same

tree. So, did

Sam ever decide

that he'd made enough money to start giving it away?

No. I don't think so.
I mean, there was,

I think in his mind, well, sorry, let me caveat

that. In his mind, some of the political work he was doing was giving it away to these bigger initiatives.
So I think that that was sort of a little bit, but no, not to the tune of what you'd expect from someone who that's their ideology. So it sounds like the Bankman Freeds helped get Joe Biden elected in 2020.
For sure. I mean, Sam was one of the largest Democratic donors.
This is just this whole conversation is just me trying to make you feel even worse about what happened. Yeah, thanks.
I'm sorry. I'm sorry.
I feel, no, I'm just shocked by it, actually. I shouldn't be.
But they were definitive players in a contested election that I don't think, for the record, once again,

sorry, YouTube was legitimate. I don't think that.
This is another example of how it was illegitimate. But whether you believe the results or not, they were huge players in getting Joe Biden elected.
And you're the one who's facing prison for campaign finance violations. Correct, yes.
I mean, that's just absolutely nuts. When they mentioned paying off Trump $5 billion not to run, do you know if anyone approached Trump or the campaign about this? I don't know.
You never knew if they were just spitting out wacky ideas. I mean, I think they also had this idea to buy an island and try to make it just their laws and their rules.
It's just like they always had these crazy things. You never knew how real something was or what was just this absurd idea.
What would their rules be on Bankman Freed Island? I do not want to know. Pretty weird, right? Yeah.
He was vegan? He was vegan, yep. Why? Animal cruelty.
He didn't like the idea of an animal suffering or... Yes.
Yeah. I mean, that's something that I think is definitely...
He's stayed vegan now, right? He's slimming away to nothing in prison. So, you know, a lot of people said his whole EA thing was fake.
At least the veganism, I would say, is real, because now would be the time to drop the stick if it wasn't. Well, from your description, it sounds like the opposite of fake.
It sounds like a sincere, deeply held religious belief. It sounds like a cult.
It sounds totally real. Yeah.
Did you think it was real at the time? I think it was real. There's, I think, a public perception in the world it was all just a show that he put on to try to raise more money, but I don't believe that.
I think he genuinely. One of the mysteries for me as a total outsider watching this from afar is how investors could meet Sam Bankman-Fried, who was like a child rocking back and forth, jumpy, stinky, wearing cargo shorts and think, I need to give that guy money.
Yeah. I mean, I can knock that.
I was enthralled by him when I met him. I mean, there's something about, there's something about his work ethic, the way he describes things.
He can sort of bring you in to the way he sees or feels about things. He had a track record for a long time of being very right about things.
You know, there's this, there's this kind of world where there's like idealized sort of central figures at companies. And they're either wildly successful or not, right? Not is Sam Bagman-Fried, Elizabeth Holmes, is Elon Musk or, you know, Sam Altman or Steve Jobs, right? So there's this sort of central tech single person that you follow and have a lot of faith in concept that pays off handsomely or doesn't.
And it seems to really only go one way or the other. So I think everyone's trying to find that next Elon Musk.
And Sam had an ish vibe that it could be him. That's such a smart analysis.
Not my world, but I just feel that you you're absolutely right that a lot of these places are effectively cults of personality. Yeah.
And it does seem like a very collaborative business tech, actually. Yeah, that's right.
But in case after case, whether it's Zuckerberg or whomever, the old people you listed, one person gets all the credit. It does feel that way.
Yeah. Yeah, and it either goes well or, you know, it either goes too well or too, too poorly.
So when things started to fall apart, um, what was your reaction? What was Carolyn Ellison's reaction? What was Sam Bankman Freed's reaction? Yeah. So I had, I had resigned from the company in June, um, what year of 22.
So before it collapsed, but a couple other people had just resigned. Um, and just resigned.
And we didn't want the publicity of another. Why did you resign? I had tried to leave two years ago.
I'd moved to the Bahamas to get away from everyone. And then everyone showed up.
So I left the Bahamas for DC to get away from everyone again. And then the whole purpose of me being CEO is because the CEO wasn't going to actually live there, but now Sam was living there.
So he could be the, you know, he was the actual person in charge. He could be the CEO on paper if he was going to live there.
So yeah, I mean, I was done again. So you resign.
When you resigned, did you have any inkling that the company was in trouble? No, no. It seemed, I mean, look, it sounds crazy now.
It seemed impossible. I mean, Sam was quoted in Forbes as worth $40 billion.
I had watched Alameda make billions and billions of dollars. FTX is a very good business that was making about a billion a year in revenue.
Sam had launched multiple crypto projects that had taken off. You know, I got my first ever

death threat when we wouldn't sell someone more pre-launch token that Sam had just

launched, right? He was selling sort of early release of a token called Maps, crazy token idea.

What was the idea?

It was Maps, like your Google Maps map service or whatever offline on the blockchain what okay yeah there's no more to say about that everything you're thinking about that is a hundred percent well i don't even understand it what is that it's because it doesn't make any sense okay uh sam launches that is like selling it off to people and we told someone they couldn't buy anymore And some guy threatened to like kill my whole family if we wouldn't sell them. I mean, this is how people were clamoring to be involved in anything SBF touched.
So yeah, the idea that there would be significant financial troubles like this just seemed impossible. I mean, in hindsight now, I understand, you know.
Because it was just so hot. It was so hot.
There was so much, I mean, everything, you know, Sam could have pulled a booger out and sold it to someone for a hundred million dollars. I mean, it's.
How interesting. Human psychology never changes, does it? No, it's repeated over and over and over again.
Yes, it really is. Everything's the tulip craze.
Everything. And it's just, but it's funny because Silicon Valley had this, you know, massive valuation bubble in 2000,

Webvan and eToys and, you know,

all these kind of ludicrous companies went under

and people really suffered as a result.

And then it happens again.

Yeah.

15 years later.

Yeah.

I mean, crypto's done a lot of these up and down.

So it's not quite tulip in that it was up and then down.

Of course.

But I think Sam as a figurehead type person is going to happen again and again and again. Interesting.
So where were you when you realized the company was in actual trouble? I was at a Buccaneers game watching Tom Brady play in Florida. And how'd you find out? So the balance sheet had leaked, the sort of infinite balance sheet about a week before, I want to say, had leaked.
And it was Alameda's balance sheet. And what it showed was that Alameda had basically been borrowing from a ton of lenders with questionable assets.
So they had a bunch of assets on their books that were tokens that Sam himself had created and then went out to lenders and they lent to him. Now, when that broke, my first thought was our lenders are screwed.
Well, that's so funny. You read my mind.
That's the first thing. That's what I thought, too.
You know, I don't know how much fault like everything was very transparent with the lenders. There was no desire to no one was hiding anything from the lenders.
They wanted to lend. They had to keep showing new origination so they could show that they were growing.
You know, everyone talks in crypto like we're building this huge ecosystem, but everyone wants their share of the pie to be the largest, right? You know, it's, Binance used to love to say, like, let's all pick each other up. And then Binance would crush little companies so it could get bigger, right? It's business.
I'm not knocking it. But the lenders wanted to be the largest lenders.
What kind of lenders when you say lenders? Genesis, Celsius. They're all bankrupt now, shockingly.
Genesis, Celsius, BlockFi, blockchain.com. I'm missing a couple.
They're all crypto lenders. And they're all,

yeah,

they're all holding people's assets for them and then lending them out

and providing a return.

You know,

this sort of collapse of over lending

is also repeated itself

over and over and over again, right?

So the crypto industry

was just a large microcosm of that.

But this balance sheet leaks

that shows basically Genesis,

but a couple other lenders had been lending, I mean, I'm talking eight, 10, $15 billion to Alameda against what are, you know, inarguably questionable things to be lending against. So my first thought is- Paper maps on the blockchain.
Yeah, yeah. You know, I made a joke.
It was like a ham sandwich. You know, Alameda was like, look, we got a ham sandwich.
Can we borrow $15 billion? But they were doing it with other firms through. So Three Arrows is another trading firm.
I mean, they weren't even preparing financials, it turns out. They were just borrowing billions from these lenders.

Anyway, so this, I could go on forever with this, but the balance sheet leaks.

And my immediate reaction is not that FTX is in any trouble.

My immediate reaction is, oh, our lenders are in a lot of trouble for this.

But then this sort of rumor starts to come out that FTX doesn't have customer funds. Like it's the balance sheet to some people somehow revealed that FTX didn't have the customer funds.
And I think a lot of that was driven by Binance, the sort of competitor, which was Sam's argument. But so I'm at the Buccaneers game.
I send this message that's been quoted now with like in Sam's trial, I send to Caroline, hey, can FTX meet all the withdrawals? She doesn't tell me yes or no. She testifies that she goes back and asks Sam whether to like be honest with me or not.
So it's over, you know, it is very blurry in my mind. How, sorry, just for a baseline, how old is she at this point? 30, 29, 30.
Everyone's, no one's older than that, except the lawyers who were involved, who are all adults and had, yeah. For them, it's just pure profit.
Like they're off doing their lawyer crime somewhere else, but they just pocketed the money and they were never indicted or hassled by the FBI or anything. I don't know the experience they've all had,

but they're not in trouble. Sorry, I can't keep hammering that enough.

It's an interesting aspect of it. There's a lot of documentaries coming out about FTX, and that seems to be a central point that a lot of them are focusing in on too.

That the lawyers skated.

Yeah, almost impossibly so, given sort of public information. You know, I thought it was weird.
I mean, I'm going to, I don't know what they're going to do to me now, but. Yeah, go to prison, whatever.
You know, I had almost thought the government and other people laid out the exact, my defense, right? So like Dan Friedberg, the general counsel for Alameda put out his own statement saying that he was in charge of all regulatory affairs at Alameda. Like that was in his words, um, that he stated that, uh, you know, the, where is, where is Friedberg in prison now? No, he's not, he's not in charge.
Um, you know, the government noted I was worth hundreds and hundreds of millions of dollars. so like I'm just choosing to make this a crime like I thought my defense had been laid out by other people in like an odd way that no one seemed to care about but yeah I get it so you're at the bucks game you text caroling can we do we have the money? Yeah.
Are these rumors true, basically? I don't remember. It starts to become apparent they are.
I remember, I think a day later, his name is Zane Tackett. He worked for FTX and he sends me like, dude, this is a complete effing joke.
There's zero money in the cold wallet, which is a crypto term for basically where all customers' money should be. And I wrote him back something like, haha, that's not possible.
It's got to be somewhere. And he was like, no, dude, all the customers' money is not where it's supposed to be.
And so then it becomes more real in that moment. I fully, maybe I'm just in denial.
I wasn't appreciating the money could be gone. Like where'd it go? Right? Like Sam's not off buying, you know, he bought houses for the company.
Don't get me wrong, but he's not out there blowing hundreds of millions of dollars on his own personal life. Right? Everything is somewhere in the system that is Sam's system.
Where is it? And then it becomes clear. I don't remember when, this is all public..
So I don't want to screw up and say this day, and it was actually the day before. But Sam drops the ventures book into a chat, which is all of the money that he has spent in FTX Ventures.
FTX Ventures was a VC arm that he'd launched about a year before. And he publicly said he was putting a billion dollars into it.
And we all, you know, he's worth 40 billion with Forbes.

I knew he'd launched about a year before. And he publicly said he was putting a billion dollars into it.
And we all, you know, he's worth 40 billion with Forbes. I knew his money in my mind was somewhere, so it's fine.
But then he drops his ventures book into this chat that I'm in, which is now an infamous chat called Small Group Chat. And he says, hey, can anyone sell this ventures book or start selling off some of it to meet the liquidity needs? And I opened the ventures book and I scrolled and scrolled and scrolled and got to the bottom and there was like $6 to $8 billion of FTX Ventures investments.
And it clicked to me, that's where the customer's money was. He had sort of taken what I think happened, and I think a lot of people don't think this is the truth, but in my mind, Sam had taken all the money from Alameda that he'd borrowed from Genesis.
And when crypto tanked or started going down and they weren't making as much trading, he poured it into a ventures book. And then eventually the lenders recalled all those loans and Sam didn't have the loans because he'd poured it all into the ventures book, which is illiquid.
You can't turn it into cash right away.

And so he went and took customers' funds.

Did any of those investments hit?

Yeah, a bunch of them did great.

Actually, really good.

It was a phenomenal—I mean, that's why customers are being paid back so much.

Anthropic alone, I think he made like 500% on.

No, they were great.

A lot of them were great investments.

That's interesting.

I didn't know any of this.

So, not a defensive Sam Bankman. No, it's not a—I want to be clear.
It's not a defense. Right, you can't do that.
But do you think, you know, net, net, as you say, in your business, that was like a smart move? If it wasn't with the lender's money, yes. Here's what I think should happen.
He took all that lender's money and put it into Ventures. And then when he couldn't repay the lenders, he should have gotten on the phone and called them and said, what do you want to do here? Like, I got this Ventures book.
It's not a bad book. Do you, I mean, I could file bankruptcy if you want.
I can give you guys the Ventures. Like, how do you want to solve this? Yeah, because when, you know, once you take that, you've got some power.
Yeah, correct. He became too big to fail and then didn't use it.
Interesting. Why? I don't know.
I think about that a lot. And that's if what I'm telling you turns out to be the correct story.
I mean, I was so uninvolved. The world really, because I've pled guilty to something associated with this, the world really wants me to have been like heavily involved in this.
Or because Sam brought me into a group chat, but I hadn't been aware of what the company was doing. Well, if you'd been involved, you would have been indicted for it, I assume.
Yeah, I know. Government would, for sure.
Yeah. Right.
And so, again, we don't need to guess about that. I mean, you went through the process.
You're headed to prison and you haven't been charged with or pled to any crime related to the fraud at FTX. That's correct.
Yes. Oh, I know it's correct.
They had me involved. They threatened bank fraud, which is asinine.
But I was CC'd on an email between general counsel and the bank and SAM that was a bank application that they argued did not completely articulate what that bank account was supposed to be doing. So they dangled bank fraud as a potential.
But there's no email from you saying, hey, let's take customer money and spend it on things. No, no.
And I think the bank fraud accusation is one of the most crazy, actually. But that's, you know, I didn't plead guilty to that.
Yeah. Interesting.
So at this point, when you're texting back and forth with people who are still at the company, and you hear that there are no, you know, there's no money, do you think I'm in trouble? No, I really didn't think, I mean, I knew I was about to have a hellish, you know, year or two ahead. Um, but no, I didn't think I was going to be in trouble.
Um, you know, I had most of my money on the platform. Like if I knew this was a fraud, I wouldn't have my money on the platform.
I at all times thought I got the right the right people involved. I got lawyers involved where I thought it was necessary.
I thought the decisions that I had made the entire time I was there were the reasonable, correct decisions. So, I knew there was going to be a lot of interaction with the government, but no, I did not expect to have any legal trouble.
So, when did you find out you in trouble? Um, let's see. So we're proffering, which for everyone doesn't know you, the lawyer, you tell the lawyers stuff and then they go to the government and talk about it.
And then the government comes back with questions and then you answer their questions. And so there's this interaction between your lawyers and the prosecutors, um, about everything you have and know and want to share.
Um, and so I was doing a couple of those and I thought everything was going well. I think this was about January, maybe February.
Um, so this is four months ish after the collapse. Um, you know, I had sent off my cell phone for like $200,000 to be completely downloaded, imaged and sent to the government for everything they needed.
Why'd it cost 200 grand? I don't know. It's what they charge at these, I don't, I don't know.
And the lawyers recommend a firm, you use them. But the FBI showed up at my house one day.
It was early morning. You know, I answered the door in my bathrobe.
There's police everywhere. There's probably 30 armed agents that had the entire house surrounded with assault rifles pointed at me.
There was some guy with a battering ram, obviously a guy with a megaphone yelling at me. Without any warning? No.
In fact, the lawyers were, you know, I asked the lawyers, is the police ever going to show up at the house?

And they said, almost certainly not.

You know, we're cooperating with them.

We're giving them everything they want.

You're answering all their questions. We don't expect that to happen.
But they did. They were there.
They seized my cell phone and Michelle's cell phone. They came with a battering ram and automatic rifles to take your cell phones.
Yeah. A lot of cruiser.
I mean, it was really nuts. And then they held us in the car as all the school buses went by, which was infuriating.
So the FBI shows up at your house rather than just calling your lawyer and saying, hey, we know you've imaged your cell phones already at the expense of $200,000 with like physical possession of your cell phones. They show up with multiple cruisers, automatic weapons, a battering ram.
You're at home with your child, I think, and your pets. This is pre-child at this point.
Pre-child? Yeah, just pregnant girlfriend. Great.
Perfect. And they show up and then throw you in a cruiser? Yeah, they held us in the cruiser for a while.
They were very upset. We'd brought our cell phones out with us.
I think they had this grand image of like trashing my house, I think is what a lot of these guys wanted to do. They certainly wanted to enter the house.
I could hear them discussing they were upset they couldn't enter the house. These FBI employees? Yeah.
We had had our phones with us when we went outside, so they had no justification to enter the house anymore. So they held us in the cruiser for a while.
I could hear some back and forth about being upset they couldn't go in the house. You know, all the school buses are coming by, which was unfortunate.
And then once the school buses were done, they let us go back inside the house. You know, and it's scary.
I mean, being without your cell phone, all of a sudden it's hard. You know, there's people trying to get in touch with you and get in touch with the lawyers and things like that.
So, you know So you got to run down to the store, buy a new cell phone. But it was the government sending a message.
We don't believe you. We have a different narrative.
And you're facing the government right now. So get in line.
But again, the only purpose of sending guys with automatic rifles and a battery ram is to intimidate you. Correct.
You're an American citizen. And that embarrass you.
I mean, the neighbors see it's loud. It's, yeah.
But treat you like garbage. You've not been convicted of anything.
Not only that, but I thought until that moment we were being very cooperative. I mean, I had, you know, there's this sort of narrative out there that I refused to cooperate with the DOJ.
I wasn't giving them what they wanted. That's not true.
I immediately cooperated. You know, I replied to the Bahamian government when they emailed me and I was offering the DOJ what I had.
I just, I don't think what I had jives with their story of how things were and the narrative that they were able to create. And so they weren't, you know, they allude to, and they're very careful with it.
So, you know, I don't want to accuse them of being, well, not accused, but like, they're not outward with this, but they, through the proffering, you can kind of tell what you're able to say that would help you save yourself a little bit more. They don't tell you directly, but it's, you know, describe this campaign finance in a different way, or, you know, how does this reconcile? You know, they sort of tell you their narrative through the questioning, and it's your decision if you play ball or not.
And I just decided I wasn't going to lie to the government to save myself, like I feel some other people have in this situation. So, I don't think, well, look, I know Nishad did not think he was committing campaign finance fraud.

I know that for a fact, um, you know, the idea that people worth hundreds of millions, two billions of dollars can be straw donors just doesn't make, it doesn't even cross your mind. Um, you know, I had had, uh, when Michelle ran for Congress, I had foreign people that

would text me and say, Hey, you know, I'll send you 50 bucks. You can put it in her campaign.
And I reply, no, that's illegal. We're not, we can't take foreign money.
I appreciate the offer. Um, or even, you know, U S people would be like, Hey, I'll, you know, I'll just Venmo it.
You know, you can put it in. No, you can't do that.
That's so you're speaking of the mother of your child who ran for Congress. Yes, correct.
In New York. Yep.
didn't win and is now in trouble for taking money from you or something unclear exactly. Correct.
For us having commingled finances. Right.
And her work for FTX not being real. Yeah.
Yeah. Where was I before that? Sorry.
Sorry, I just have to point out that there, again, I wouldn't be saying any of this if you had even been accused of participating in the core fraud here. But you haven't been even accused of that by the government.
But you did give to Republican candidates. Yes.
And I was associated with FTX. Well, yeah.
Yeah. Well, a lot of people were who haven't been indicted.
I mean, in our system, I don't know if you know this, but the people who commit the crimes get indicted. People who haven't committed the crimes don't get indicted.
That's the promise of the system. I'm not sure I believe that.
Well, I don't either. That's why this is a fascinating interview.
But I used to believe that. Did you believe that? Yeah, I held up right

until very recently believing that. You know, I even tried.
I'm not a victim. I will never be a victim.
I don't consider myself a victim. I chose to listen to the lawyers.
I made the decisions that I got. And so I don't want this narrative to be that I feel like I'm a victim of something.
and I go out of my way to make sure I don't have that feeling.

So I constantly try victim of something. And I go out of my way to make sure I don't have that feeling.

So I constantly try to spin it in my head to make it more the narrative events that I know isn't true.

But I'm constantly trying to get there to make this all make sense.

So, you know, I had a lot of faith.

I don't dislike the legal system or have that strong of issues with it until I sort of saw what I saw and saw how it plays out. I mean, the...
Well, I think you're taking the right tack emotionally. I think it's very destructive to think of yourself as a victim.
I think the Democratic Party destroys millions of lives by encouraging Americans in certain groups to think of themselves as victims. I agree with you 100%.
But as a factual matter, you are a victim because the crimes to which you pled guilty are not crimes.

From my read of it,

I don't understand how those are crimes.

It doesn't make any sense at all.

If you're borrowing against your own assets and then you take that,

which every rich person in the world who's invested in low basis equities, for example, does then every person, that money that you get from that loan or any loan is yours. It's yours.
And if you donate some of that to political candidates, you're not a straw donor for the person who loaned you the money. I mean, that's like, that's I agree.
So you are a victim in that sense. That's not a crime.
And to construe that as a crime is itself a miscarriage of justice, in my opinion. Yeah.
I mean, I think it says a lot of why there was an inducement, right? There's no need to make an inducement to get someone to plea if you have a good case or if they're guilty, right? You only bring up an inducement because you know that, you know, this person's not believing or getting to the same place you want them to get to. Right.
So they threaten your family. It's more common than you'd think.
Oh, I know. The Varsity Blues case, you know, and a lot of the reality is people don't have sympathy for wealthy people, right? Which is fair.
I'm not arguing. There's plenty of people that have sympathy for.
And so when there's a misjustice to someone with money, a lot of the world's just like- Well, I am a wealthy person, I guess, relatively speaking. And I intensely dislike rich people, even though I've been one my whole life really.
But yeah, I dislike them a lot because I think they've been terrible leaders of our country. And I also just, I just don't like them personally.
So I get it. I absolutely understand that bias, that bigotry, but, but the system itself should, should guard itself from bias and bigotry just because you don't like, okay, you don't like black people.
Does that mean every accused black person should go to prison? No, of course not. That's horrible.
It's immoral. Right.
And so it's that it's true for any group. You assess the crime on its own

terms. Is this actually a crime? Did the person actually commit the crime? And what's the

appropriate punishment for committing that crime? Those are the only questions that matter. It

doesn't matter what group you're from, right? Yeah, that's how you'd expect the legal system

to work, I think. But it's clear as day.
That's not how it works. If they told you that because

you're white and straight that you can't get a fair trial, like don't we have a civil rights division at the justice department? I mean, that's the problem. So it would be like, well, you know, you're black, you can't get a fair trial.
Well, okay. We have a federal government to fix that.
Right? Yeah. Yeah.
Yeah. Okay.
Sorry. I mean, I'm getting, you're obviously much more balanced psychologically, but I'm outraged on your- You go crazy if not.
You go crazy. So how are you feeling having gone through all of this? This has been a remarkable conversation.
Thank you, by the way. But how are you feeling by the prospect of spending seven and a half years in federal prison? It's a good question.
I think I'm more upset at the impact it's having on everyone else. I've always been fairly selfless, I think, in sort of how I operate.
I'm not excited for it, but the impact on Michelle, the impact on the kids, the impact on my family, the impact on the FTX fraud on all the customers. I mean, those things are much worse, I think.
I've talked to a number of people that have been through the prison system, and so I've gotten advice on how to do it. What have they said? Well, they sort of assure you it's not as scary as you're feeling like it's going to be, right? You're not in with people who committed sexual assault or gangbangers or things like that.
You know, figure out ways. The boredom is what I'm told is sort of the hardest thing to grapple with.
And you have to find ways to have purpose. I think a lot of people that end up in white collar crime situations, right? Their whole life, they felt, they did things to have purpose, right? People who are successful want to have to have purpose.
And so you're all of a sudden stripped of your ability to have any real purpose. And figuring out how to combat that is one of the key things that people recommend.
So how do you do that? I mean, I've got a massive book list I've sort of been putting together and working with people who are going to send me those.

Hopefully I can teach or provide some educational material. I've already helped create.
So there's this guy named Michael Santos. He was incarcerated for almost 30 years for a small drug possession crime during the war on drugs.
And he has started a program to help with education. And so we together created a course that'll be sent in to almost a million prisoners by the end of this year, I'm hoping, around digital assets and cryptocurrency and this evolving economy.
Come on. So that was very cool to be a part of and is hopefully going to have some positive impact.
You know, there's pros and cons, but the crypto industry has a low barrier to entry, right? And I think it's one of the cool things. There's people all over the world in every economic class or situation that get to be involved.
And it's a very unjudgmental community in the sense that you can just self get involved. And so, you know, I'm hoping people less fortunate than me who come out of prison, this could be something that's hopeful for them, you know, because you go to prison, job prospects are terrible, you know, all these things are horrific the moment you get out.
And so, you know, if this, if a couple people could find a meaningful job in this industry, that would be incredible. You know, as terrible the situation's been for me, there's people who have it way worse who go through this system.
So, um, are you claustrophobic?

No,

I actually like small spaces,

believe it or not.

Come on.

I do.

I do.

It's one of my,

I live in this very large house right now and it drives me nuts.

I walk into a room and I'm at least 10 things need to be fixed in it that I haven't gotten to.

And I just,

I don't mind small spaces.

So I lived in about 400 square feet in Hong Kong,

um,

and loved it,

loved the apartment.

So,

um, I'm not worried about the space. I don't know what I'm worried about, to be honest with you, like for myself personally.
I navigate situations well. I'm pretty friendly with all types of people.
So, you know, it's much worse on everyone who has to deal with my aftermath out here. Yeah.
How is your family dealing with it?

Not well.

I mean, it's hard.

It's hard.

You know, I'm splashed across my local newspaper as like this horrific human being that stole everyone's money and hurt all these people.

You know, all the stuff that I thought was doing good is now perceived as me trying to hide that I was an evil person by doing good.

So that sucks.

You know, yeah. It's terrible for them.
It's terrible for a lot of people. I'm sorry.
No, not your fault. Has it changed your view of crypto? No, I'm a stronger supporter now of crypto than I think I was before.
So the basis of crypto, FTX is in some ways the antithesis of what crypto is, right? Crypto is a decentralized platform, the network that doesn't need these centralized institutions, that sort of doesn't have to deal with the horrific banking industry, which is a horrific industry. And so FTX and Binance, these all serve as bridges right now between what I'll call the old world and the new blockchain-based world.
And, you know, FTX proved the exact thing that a lot of people in the crypto industry are arguing, which is like these centralized powers. You don't know what's going on inside of them.
They get too big. They get too careless.
They obfuscate human lives in this sort of, you know, big central arena. So the basis of crypto is fighting against what FTX was, really.
They're necessary bridges right now, but I think eventually they won't be. So no, I love the crypto industry.
I'm not saying there's no issues with it. That's not my point at all, but I have a stronger faith in crypto now than I did even before.
Really? It's an incredible network. I mean, I'm not praying to it every night like some people are, but it's amazing.
I mean, if you've ever sent cross border remittance through a Fed wire system or through a bank, it's a horrific process. Yes.
And the authority that the banks have over what is your asset is not good. It shouldn't be.
It's shocking. You know, try to withdraw, you to withdraw $25,000 in cash from a bank.
Yeah. I mean, you probably get more than 30 agents at your door.
Oh, yeah. No, no.
Well, I couldn't agree more with that. I wonder though, given your experience, just trying to see what you've learned from it, you make the people with power mad.
You annoy them. You give, you know, $20 million to Republican candidates in a tightly contested cycle.
And they like, they wreck you. And then they go after the mother of your child.
You know, small child trying to send both parents to prison, really, on campaign finance violations. It's pretty, if you would do that, there's nothing you wouldn't do.
Right. So, crypto, the idea of crypto absolutely disempowers the banks.
Single most important institution, most powerful in America. Yeah.
More powerful than pharma, even. Like, how can they allow crypto? Honestly.
Yeah, I mean, I don't think the government gets to decide what's allowed and what is not allowed. I couldn't agree more.
There have to be rules. I'm not anti-all regulation, right? There needs to be guidelines.
No, no, I'm just saying as a practical matter, now that you, they sent a guy with a battering ram to your house in suburban D.C. Yep.
Like, they don't have limits. Like, if you get in their way, they'll crush you.
Right. They killed, they murdered Jeffrey Epstein.
Actually, that actually happened. Sorry, it did.
So, how can they allow Bitcoin to proceed? I mean, you have to fight, right? You can't not fight. But at some point, the fangs are going to come out, right? Oh, they've come out.
The fangs have come out. I mean, the Republicans are fighting against those fangs.
You know, really thank you to Ted Cruz for initiating that war. But, you know, it was interesting, and I'm going to sound crazy when I say this.
When crypto first started being noticed in D.C., I was worried that, not worried, but I thought Elizabeth Warren was going to like it. She's ran this whole, you know, fake anti-banking campaign.
Oh, of course. Individual rights, you know, this whole thing.
And I thought Republicans are going to see this as a competition to the dollar and might be more apprehensive to something competing with the dollar. And so I was like, oh, you know, we're going to have to do some education work on the Republican side.
And then, I mean, Elizabeth comes out pro big bank, anti, I mean, it's... Same with Bernie Sanders.
It's really wide. They're against the billionaires.
They're against the Republican side. And then, I mean, Elizabeth comes out pro-big bank, anti.

I mean, it's...

Same with Bernie Sanders.

It's really what?

They're against the billionaires.

They're against power.

Same with that...

Who's that sort of

mildly attractive

but super annoying chick,

the former bartender

from New York?

Yeah.

But I can never remember

her real name.

But anyway,

yeah, we're against

fighting the power,

fight the banks.

But they're tools of the banks. Of course, every one of them.
Yeah, I mean, crypto is a great proof of that. I mean, this thing is, I mean, this is the quintessential individual rights, you know, a network can't be racist, can't be sexist, can't be anything.
Like it's just math working. This should be the dream for people who advocate that that is their priority.
Like true egalitarians should embrace it. Love it it love it should love it i mean you can't be denied access to using crypto because you're in the slums or something like that or you you know a lot of people go to get bank accounts that don't have a lot of money and they get hit with all these fees and all this so crypto doesn't do that it can't do that it's a math network that works because math works um yeah it should be the dream for these mean, they showed their cards completely.
And now a lot of people pretend it's not true. I think Democrats will come around.
It's crazy. Well, I watched this.
We were laughing with this at breakfast, but the Gary Gensler thing, I watched some very smart, really good people in crypto who I know, big holders of, say, Bitcoin, say, well, I think Gary Gensler, he's not going to be going to be. And I was like, Gary Gensler, first of all, he's just a total tool of the people in charge.
Like, that's it. Like, whatever they want, he'll do.
He's never going to be on your side. But they, like, were convinced that he was.
Yeah, it's baffling. I mean, in a dream world, it's not a partisan issue, but the crypto industry didn't make it partisan.
The government made it partisan. Right.
Well, I agree. Well, I think it's really simple.
And I have the advantage of knowing a lot less than you do about the details. So for me, the big picture is clear.
And it is that this technology is a threat to entrench power. Therefore, they'll do whatever it takes to destroy it.
Yeah. Yeah, that's right.
Yeah. Or try to control it, right? I think they've gotten sort of the U.S.
government now. So Binance survived where it was one of the biggest crypto exchanges, but now they're under U.S.
government surveillance. So I think Binance is essentially just an extension, a crypto extension of the U.S.
government at this point. So can I just ask, as someone who believes in freedom, whose freedom is about to be taken from him, to me, the most intriguing promise, most thrilling promise of cryptocurrency was the ability to transact any kind of economic financial transaction with privacy.
It's like nobody's business, actually. Yeah, it turns out it's not that private, though.
It's not private. In a lot of ways, it's more.
So who the account holder is is private until it's somehow made public. But the transactions are public forever.
Yeah, by definition. By definition.
That's the point of the blockchain. But the idea that, you know, I'm allowed to buy things or sell things without everyone knowing about it.
That seems like a human right to me. Yeah.
Will that ever be made good? I mean, why? There are blockchains that operate that way. There are sort of hidden like XMR and there are blockchains specifically built to obfuscate ownership and ability to review the transactions.
But in say 20, I mean, this is an emerging technology. So in 20 years, will it be easy for the average person, i.e.
me, to buy something or sell something using this technology as a currency, medium exchange, privately? No. My sense is no, it won't be.
The core use of it won't be. But it not private you're it's not private now cash is your most private for sure that's why they hate it um but cash is going away yeah unfortunately i'm not yeah sorry the blockchain doesn't solve cancer and every problem just to be clear it's just a a very good network for some specific sets of purposes I know I was just okay I won't throw out my no I don't think you'll end up a crypto lover at any point in time but well I want to be that's the thing I've spoken at two crypto conferences I like a lot of crypto people they're smart some of them are scammers for sure but a lot of them are are just really high-minded, idealistic people, high IQ people

who want to make the world better.

So I love them.

I love them.

I love Michael Saylor.

I like, you know, a lot of those people.

I'm so sympathetic to it.

But I just want it to give me some privacy.

Yeah.

No, privacy is you're not going to get.

I mean, you can be private in the sense

that no one knows your address belongs to you.

Right. But I don't think it's going to get, it's not going to solve the privacy on a large scale.
Could you fund a, because there is no meaningful opposition to the current regime in the United States. There's no, there are a lot of Trump voters, but they're not organized and they never will be organized because the people in charge prevent them from being organized.
They tried on January 6th. A lot of them are still in jail.
So will crypto solve for that? Will you ever be able to fund a protest movement that can't be defunded by the people the protest movement challenges? Well, I mean, so the, you can't stop the transactions from occurring.

And so that's, you know, a bank can stop a transaction from occurring. Yeah.

To close your account or things of that sense.

You can't close someone's Bitcoin account.

And there's tons of different cryptocurrencies, so we're generalizing here a lot.

But you can't close someone's Bitcoin account.

Yeah, let's go with Bitcoin.

So you, yes, you could use it to fund a protest that couldn't be stopped.

Now, once you have the Bitcoin, if you want to turn it into cash, that could be prevented. Or if they flag your wallet as being an extremely high-risk wallet or associated with something nefarious, a lot of other people won't interact with it or won't want to receive from it.
This doesn't completely solve government control. but it takes things out of centralized institutions and puts them in your own pocket, which is enticing for a lot of people.
I think we're going to a barter economy. I just think it's really important that the people in charge not have a monopoly on the money, because when they do, they will defund any effort to challenge their authority.
Yeah, it's anti-American. I mean, the whole principle of what we're doing here.
That's right. But I don't know.
A lot of people don't share that view. Well, I just want to wish you truly Godspeed and thank you for explaining all of this.
And anyone who's made it to the end of this interview, I think we'll have a completely different, as I do, view of what happened, certainly to you. Last question.
Have you talked to Sam Bankman-Fried since all this happened? I have not, no. I haven't really spoken to anyone.
So the lawyers do a great job. You get siloed immediately.
You can't interact with each other because then you get threatened with collusion or more crimes. It's sort of part of the legal, it's a very smart part of the legal system.
You become a pawn in this game of lawyers and the pawns can't interact. The pawns lawyers can interact if the pawns lawyers are willing to interact, but for the most part, you're siloed and separated.
So I haven't spoken to anyone who's meaningful in the entire situation. No First Amendment for the accused.
No, I mean, they it's yeah, they don't like you talking. You know, they threw Sam, Sam got locked up early for leaking a diary to the press.
You know, the prosecutors control the whole, they have to control the whole narrative. It's a game of publicity for everyone.

But, you know, the individuals in a horrific spot and the government's in the greatest imaginable spot.

It's so disgusting.

It's hard to express it.

Ryan, thank you very much.

Yeah, thank you for having me.

Appreciate it.

Yeah.

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