On Friday (11 November 2022), crypto-focused angel investor Jason Choi, who is Founder of the Blockcrunch podcast, shared his thoughts at the actions of Samuel Bankman-Fried (aka “SBF”), the Co-Founder and CEO of troubled crypto exchange FTX.

Here is how a Vice report published yesterday described SBF:

Thirty-year-old Sam Bankman-Fried is crypto’s wunderkind. A flurry of well-placed puff pieces laid the ground for a reputation as a genius—a slightly awkward space cadet, but a genius nonetheless—who seemed to have his hands in everything, everywhere, all at once. He was, according to various articles and magazine covers published shockingly recently, ‘the next Warren Buffett,’ and would soon be ‘the world’s first trillionaire.’

Bankman-Fried has not just been described as a ‘savior’ of crypto by his financial backers but canonized as a man who would somehow save the world as the face of the ‘effective altruism’ movement favored by Silicon Valley’s elite, which posits that the most ethical thing a person can do is amass as much power and wealth as is possible so that they can then donate it ‘effectively’ to create greater social change than can be done with, say, taxes, political change, or standard charitable giving.

Yesterday, the FTX CEO took to Twitter to talk about he had “f*ucked up” at FTX International:

He went on to say:

FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that’s different from liquidity for delivery–as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little… The full story here is one I’m still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower…

My sense before: Leverage: 0x USD liquidity ready to deliver: 24x average daily withdrawals Actual: Leverage: 1.7x Liquidity: 0.8x Sunday’s withdrawals Because, of course, when it rains, it pours. We saw roughly $5b of withdrawals on Sunday–the largest by a huge margin…

And so I was off twice. Which tells me a lot of things, both specifically and generally, that I was shit at. And a third time, in not communicating enough. I should have said more. I’m sorry–I was slammed with things to do and didn’t give updates to you all… And so we are where we are. Which sucks, and that’s on me. I’m sorry…

Well, earlier today, Jason Choi said that although he had initially thought it was “ego and recklessness” that had led to disaster at FTX (and sister company Alameda Research, which SBF also co-founded), now he believes that it could have been “malice” to the near collapse of the FTX empire:

Choi went on to say:

The past 24 hours was a playbook on “how do I minimize my own exposure – and in the process maximize damage on everyone else?” Answer is: cover own ass in Bahamas and allowing loopholes for larger traders to exit (cus who’s afraid of the small retails?) How a trader thinks… Maybe misstep is a better word. even Theranos began with a somewhat innocuous premise, a misstep, then a series of ballooning actions to cover that initial misstep But now I think it’s genuine moral hazard at best, malice at worst. There is no way this was oversight.