Behind the Bastards - How Sam Bankman-Fried Conned the Crypto World

Episode Date: November 22, 2022

Robert sits down with Jamie Loftus to talk about the collapse of one of the great financial criminals of our time. (1 part) GoFundMe Link: https://www.gofundme.com/f/portland-mass-shooting-paralyzed-survivor-fund?utm_campaign=p_nacp+share-sheet&utm_medium=copy_link&utm_source=customer  Join Robert Evans, Margaret Killjoy and Sophie Lichterman for a special live episode of Behind the Bastards with Q&A. Upon purchasing your ticket, you’ll be redirected to the show screen where there will be a prompt for you to submit a question to the hosts. Questions are picked at random, but be sure to get yours in as it may be featured in the live episode.  The show will be available for replay for 7 days after the event. Tickets: https://www.moment.co/btbSee omnystudio.com/listener for privacy information.

What would you do if a secret cabal of the most powerful folks in the United States told you, hey, let's start a coup? Back in the 1930s, a Marine named Smedley Butler was all that stood between the U.S. and fascism. I'm Ben Bullitt. I'm Alex French. And I'm Smedley Butler. Join us for this sordid tale of ambition, treason, and what happens when evil tycoons have too much time on their hands. Listen to Let's Start a Coup on the iHeart radio app, Apple podcast, or wherever you find your favorite shows. Did you know Lance Bass is a Russian trained astronaut? That he went through training in a secret facility outside Moscow, hoping to become the youngest person to go to space? Well, I ought to know because I'm Lance Bass. And I'm hosting a new

podcast that tells my crazy story and an even crazier story about a Russian astronaut who found himself stuck in space with no country to bring him down. With the Soviet Union collapsing around him, he orbited the earth for 313 days that changed the world. Listen to The Last Soviet on the iHeart radio app, Apple podcast, or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science and the wrongly convicted pay a horrific price? Two death sentences in a life without parole. My youngest, I was incarcerated two days after her first birthday. Listen to CSI on trial on the iHeart radio app, Apple podcast, or wherever

you get your podcasts. On February 19, 2022, there was a mass shooting in Portland, Oregon, a right-wing extremist opened fire at people doing traffic support for a weekly racial justice march. He killed one person. He injured several others. One of the people who was injured, a young woman, is currently paralyzed from the neck down. Her friends and family are raising money, not for immediate survival stuff, for quality of life things, for things to allow her to enjoy herself out in the world with people, given the fact that she's dealt with something and is dealing with something permanently life-changing. So I wanted to highlight that they're already above their initial goal, but obviously, anything we can give will help her

and her family have a higher quality of life, and I think they deserve it. So go-to-go fund me, Portland Mass Shooting Paralyzed Survivor Fund. That's go-fund me, Portland Mass Shooting Paralyzed Survivor Fund. If you've got some extra cash, you know, the season being what it is, I get that everybody's got a lot of expenses coming up, but if a few folks have some extra bucks, I know it'll be appreciated and it'll help her have a warmer season this year, and she certainly deserves it. So again, go-fund me, Portland Mass Shooting Paralyzed Survivor Fund. Thank you. Oh, God is dead, and you, Jamie Loftus, have killed him. I did it. I finally did it.

You did it. You did it. No, God was a hymn, and Jamie killed him. Hammered in the back of the head. And people are going to be critical of that, but you know, you don't know my story, and in my six-part mini-series in which I'm played by Amanda Seafreed, I think you're going to start to see my side of the story, and I think I'm definitely not going to jail for what I did. That's good. Unlike Founder of Theranose Elizabeth Holmes, who we just found out has been sentenced to 11.25 years in prison. I have mixed feelings because it's like people don't go to, first of all, the prison industrial complex in general. It doesn't make anyone better. To the extent that there's value in the present day in putting

people in prison, it's people who are like a severe ongoing danger, and I don't see this making anything better. Like, at the same time, I hate her, so I don't, I'm not going to... She's horrible. It's not going to be the top injustice by Rue today. I do kind of like that her, after being exposed as an unrepentant criminal, she's like, oh, I think I'm just going to kind of be like a normie girl for a while, and I'm going to go normcore and have a kid. And you're like, Liz, it's too late. It's too late for that, Liz. You defrauded people with a fake medical device that led folks to get treatment for things they didn't have and ignore illnesses they did, which is bad. You got caught before too many bodies

at the floor, but that would have stopped you. But you didn't really care. You applied Steve Jobs' logic to something that was not just a silly box to keep in your pocket. Oh, Lizzie. Lizzie, Lizzie. You know, Lizzie... I don't know. Again, also putting her in prison for, you know, probably nine years when you consider all of the other things is like not going to help anything. It'll just mean that that kid she has grows up without a mom for nine years, and that's not going to make the world better. That's the thing. It's like, it's a huge moment for many things can be true at once and us having to hold all of those truths and still record an episode of Behind the Bastards. Can I tell you about a legal case?

This actually will be relevant to the episode, but yes, please, please. Wait, really? Yes. Okay. This is definitely not going to be relevant, so let's give it. I was, a legal case I was thinking about today was the Beanie Baby's billionaire when he went, was taken to court in 2013 for holding money in a Swiss bank account. He, so it was like a tax evasion charge. Why is that illegal? Oh, a tax evasion charge. So he was up for as many as five years in prison for tax evasion. Then he got off with, I mean, he's a billionaire. He's never going to suffer a consequence, right? But like, he ended up getting a two years of probation on the ground that it had been too publicly

humiliating. So he didn't have to get to go to jail because he was so embarrassed. It was so embarrassing that he didn't have to go to jail. What? That's absolutely fucking weird. Anyways, I'm going to, I'm going to see how far this goes by committing murder and then having my pants fall down and like, well, judge, look, yes, I did stab that man 47 times, but then everybody saw my underpants. Yeah. I pee peed myself. So I feel like that, that ought to square. Yeah. Can we, can we just zero this one out? Man, I love the Beanie Baby's story so much. I'm surrounded by my beans, feeling safe. Wow, that's good. You do literally have one on your shoulder right now. Yeah, I need the platypus. Just like I have this rifle next to me.

I think that we both have our comfort objects at the ready. That's right. So Jamie, speaking of Elizabeth Holmes, because the person we're talking about today is going to be the next story like that. By this time next year, there probably is going to be an HBO documentary about this guy. God. Maybe Taylor, Taylor Kitch could probably play him actually if he wanted to really like round out. Taylor Kitch played hot David Koresh in the Waco show. Oh, I walked into that one. Yeah, they'd have to give him like a belly suit or something. That's not anti-fat. I'm just being accurate, but he could do it. I don't want to see this man ever again. No, I'm mad. Taylor Kitch, you don't want to see Taylor Kitch again. No, you don't want

to see those cum gutters again. Unbelievable. God damn it, Robert. There's plenty of, in this town, Robert, there's a million cum gutters. I don't need those. Oh, that, that is true. But anyway, one runs through the street. That is true of Los Angeles and no other city. Today, we are talking about a guy who absolutely never comes, Sam Bankman Freed. Do you know this guy? Do you know this guy? I don't know this guy now. You don't know this guy. You don't know this guy. Have you caught any news in the last week about how like a massive cryptocurrency exchange has collapsed? I did hear about that. This is that guy. Oh my. This is the guy with his like polyamorous sex ring that was running a big crypto bank in the Bahamas and it all fell apart. Now billions of

dollars are gone. You've lost me again. Oh, great. Okay. Well, I'll try to, this is still breaking. We are, because this is a Thanksgiving week episode, we only do one episode on Thanksgiving. I needed a single one. So I just want to give everyone background on this guy. We may come back to this story because there's a lot we don't fully understand about how he did what he did and the degree to which, but the gist of this is that this guy ran a trading service called Alameda Research and a crypto exchange. An exchange is basically like a bank, right? It's a cross between a bank and like a trading platform called FTX, which was one of the largest cryptocurrency exchanges in the world and was also considered by most people to be the most stable and like

ethical and legitimate, right? People who are just kind of on the outside looking at. When everything collapsed earlier this year, right? You remember that? We have that big like crypto. I was engaged in that. It's just that I get a lot of my news from journalists on Twitter and they've been busy this week. Yes. So when crypto like fell apart, when a lot of crypto fell apart earlier this year and like a bunch of places went under, FTX was one of the ones that stayed stable and actually were buying up a bunch of like failing crypto companies to try to like prop up the industry. They just collapsed and like the value of everything has been plummeting for the last several days. It's a big disaster. It is very like, yeah. In words that will annoy me as little as

possible. Can you explain why FTX remains solvent and other? It is not solvent. Oh, no. Why did it outlast them? Because they lied. So they were operating. The short end of how to describe it and we may, there will be more details to come, but at present it seems fair to say that it was a giant Ponzi scheme where they were taking in money, promising unreasonable returns, using other investor money to gamble on stuff to try to provide. Anyway, and it worked well. Unlike all the other crypto guys, they were dishonest. Yeah. It is very likely. What differentiates this is the scale because this is very likely a financial crime on the level of what Bernie Madoff did. We are talking in the $10 to $20 billion stolen range. Holy cow. A lot of money.

This is a serious financial crime. I'm going in on this pretty cool. So I'm listening. The other kind of mass like touchstone of this is that it has led to a class action lawsuit against Larry David, Shaquille O'Neal, Tom Brady and a number of celebrities who were all in a Super Bowl ad for FTX. I remember that ad. That was so embarrassing for my man, Larry. The lawsuit is basically. Shaquille will advertise basically anything. This was a high dollar Ponzi scheme and you guys were using your name recognition to sell unregistered securities, which they were. Which they definitely were. Sorry. I just want to circle back to Shaquille. Shaquille O'Neal will put his name on anything to the point where it is very funny. I worked at a haunted hayride

this year, which we don't talk about because it was a bad idea, but the rival. I told Sophie that. What? You told her it was a bad idea. I told her it was a bad idea. Well, guess what? I'm a live bitch. Bitch, I lived. I supported it. I lived to tell the tale. It's very unclear who was right in the side of should I work at a haunted hayride or not. I still haven't really landed on an answer. Point being our closest rival haunted hayride wise was Shaqtoberfest. It was. Wow. Shaq themed haunted attraction in which the only Shaq related thing was a gigantic inflatable Frankenstein that looked like Shaq, which did sound awesome. That sounds actually like the best time anyone's ever had. Shaq will put his name on anything, including crypto and Halloween. He sure will support

of us. What a what a king. Probably not. I'm sure there's horrible things about Shaq that have come out. That seems almost unavoidable. Anyway, Sam Bankman Freed is the guy behind this gigantic financial crime that is still unraveling as we do this episode. And I want to talk about less about what happened on the exchange because none of us want to talk about how somebody carries out the nuts and bolts of a cryptocurrency scam. But I want to talk about the social elements of the scam. I want to talk about who he conned to the media, how he conned celebrities and how he conned regulators. And I just want to talk about also the way some of these people have talked and wrote about him, because there's a lot about,

I don't know, a week or so ago, we did an episode on The Daily Show. We do it could happen here about ethical altruism, which is in brief, a theory that like the instead of trying to help people just because they need help, you should only help people after you consider the way to help people that is like the absolute most beneficial way for like the least amount of effort. It's utilitarianism, right? How can I do the greatest good with the least resources and whatnot? And it's the way a lot of these like, and it's merged with this kind of thinking towards what billionaire types call long termism. And the gist of this is like, it's not worthwhile for me to do stuff like pay taxes to have a society or guarantee like universal

health care. Instead, I should make instead the most ethical thing that I should do is make as much money as I personally can and then put that money into things that I believe will save the world like research to stop AIs from killing everyone and getting to Mars and shit. It's a way for billionaires are really fast trains. It's a way for billionaires and the other mega rich to justify like continuing to do exactly what they want and feel like they're saving the world. Anyway, Sam Beckman freed the guy from beanie baby. You know, the beanie babies billionaire did to improve the world. He made a lot of beanie babies. And then he bought the four seasons hotel and kept making beanie babies. He didn't do shit. That's well, you know, that's I'm fine with that

compared to these guys because they're all doing the Elon Musk thing where they're pretending. Anyway, bank Sam Beckman freed is one of these guys and we're going to get into that. But we did this episode on it could happen here where he was kind of a tangential character in this very unsettling and insidious movement that is behind guys like Elon Musk who are claiming to be saving the world will just fucking over people. And then like four days after it came out, his entire life unraveled and his fortune disappeared overnight because he was a giant con artist. What a treat. It's very funny. So that's why we're talking about him right now. Yeah, he's like 30 years old and looks like Mark Zuckerberg and David Dobrik's love child.

He's 30 years old. I feel great about myself right now as a Mark Zuckerberg and David Dobrik's love child. Look, I shouldn't call anyone a schlub, but he looks like a schlub. I forget what David Dobrik looks like because my brain protects myself. Respectfully, I understand. Two villains, two villains love child. Yeah. Anyway, so I yeah, Sam Bankman Fried was born in 1992 on the campus of Stanford University, continuing a long and proud tradition of absolutely nothing good ever coming from that hellhole. His parents are both extremely prominent Stanford professors. His mother, Barbara, is a lawyer who clerked for the Second Circuit Court and graduated from Harvard. She founded Mind the Gap, a somewhat shady and

mysterious democratic fundraising group. I think it's shady in that people don't exactly know where all the money comes from or what their goals are. Yeah, that sounds shady. Yeah. She also pinned an essay in 2013 that the right wing is going nuts about because she was basically arguing that good and evil are less a factor in what people do than environmental factors and all that stuff. When people do things that are bad, it's more often a product of their advice. It was kind of a, oh God, what's that fucking psychologist? It was like a Skinner type argument where it's like, well, people have bad inputs in their youth and that's going to determine. Anyway, I think that's funny given what happens. I'm going to guess she sucks at what she's she's she

sucks. And so does his dad, Joseph Bankman. Joseph is also a lawyer. He is a graduate from Yale. His big claim to fame was developing a proposal for an overhaul of the California tax return system that would have filled out citizens' tax returns in advance. And I know I just said he sucked, but actually that sounds like a good thing. I think that that's actually a cool thing to advocate for. The measure failed by one vote after heavy lobbying from Intuit, a tax prep software company. One vote, no shit. Yeah, it kind of is it's it's total bullshit because stuff, it's the thing everybody agrees with on paper, but nobody will actually fight the tax prep companies, which is like, hey, the IRS like knows more or less what I make and like knows more or less

what I owe. Why don't I just get a thing from them? Why do I have to go through this like anyway? There's no need, but it's like that's the other countries do it that way. We don't though. And it's because there has to be a convoluted system that's expensive and where they can charge you if you make the tiniest mistake because you can't read size one font. Well, and more to the point because I don't actually think the IRS is advocating to keep it a pain in the ass. I think it's these tax prep companies because they have an entire industry based on charging people to do the thing that they have to do to avoid going to fucking prison. Anyway, I said he's an asshole and I'm sure he is, but he was right about this and I don't know what to say about that.

Like all of us, Joseph is also a podcaster. He is the host of the co-host of the Stanford legal podcast. Oh, and sufferable times too. And he's a nerd. If it wasn't the holiday season and I wasn't like getting ready for friends and family and all that, that good stuff, I would have listened to his podcast and we would probably be making fun of him, but you can do that on your own. Oh my goodness. I believe it. Isn't it doesn't it feel so horrible when you think of how many people do what we do, but they're the worst person you've ever heard of? It's so sad. It's embarrassing. Yeah. It's like, I don't know. I avoid self identifying as a podcaster as it is. It's still not a system, but then on top of that, they're like, Oh, like

what? Like, you know, the only thing that I can compare it to is like, when I started making a living as a writer 15 years ago, and I would say that at like a party or something, someone would ask like, Well, what do you do? And I'm like, Well, I'm a writer. And like four other people would say, Yeah, me too. And then you wind up listening to everybody's pitches for their novels that they're never going to finish. Oh, I mean, it's the same thing. And so eventually I just started lying and saying that I still worked as special ed. Well, I like, I mean, it's the same thing with like, if you say you're a comedian in a party, you're about to have a life. Oh, God, no, never, never identify as a comedian in public. Oh, me too. Do you and I've done one whole open

mic. And my was very offensive. And a comedian's job to push boundaries and be over Oh, tell me your joke. It's like, you know how Lenny Bruce let read that, let read that list of curse words. Well, I just do that with slurs here. Let me show you. Yeah, you're like, Yeah, like, Celine Bruce was not funny in that period of his career, even a little anyways, anyways, our jobs are embarrassing. That's what I'm saying. Anyway, our jobs are indeed embarrassing. So as you might guess from all of that, Sam was born into what amounts to America's like liberal aristocracy. He is a fucking coastal elite, right? This kid grows up on the Stanford campus to Stanford professors. One of his aunts teaches at Columbia University is like a professor there.

Oh, so he's like, he has close family connections to employees at Yale and at Harvard as well as Stanford. Like his parents both go to Harvard, I think he's Kennedy. He is a yeah, he's he's that he is as yeah, you do not get much more of a rarefied like intellectual air. He's wearing he's wearing linens around. This is how I think about yes, this is this is a child who at age eight has strong opinions on Emanuel Kant, which again, cheer for him at the table. No. Oh, we're about to get into that, Jamie Loftus. I just had a vision of a child sitting at like a holiday dinner and saying derivative and then that's amazing. Wow, he is really coming along. Isn't he? Yeah, this is a little kid that when he like sits down at the doctor's office pulls out a fucking,

I don't know, Derrida or something book just just just so you know, just so you know, he knows fancy philosophers. Yeah, damn it. Board book. So his parents and his raised him and his brother to be utilitarians. One of the articles about them I say that into SpongeBob. Okay, yeah, I was, I was raised to hassle cows in our back 40. His parents nights are so this article notes that nights around the family dinner table often focused around debates about how to do the greatest good for the greatest number of people. In later interviews with I'm going to get to this guy in a second, the absolute dick writingist journalist to ever write dick. Sam would claim that his most formative moment came at age 12 when he was weighing arguments around the abortion debate.

So first off, no, because not only no, also like in the context of like, where would he have been doing this? I'm guessing it like around the family table or when they have the all, you know, everybody's got their brandy and he's drinking some sort of fucking tea that's insufferable and they're all talking about people's rights as if it's like a fun intellectual problem, like how to fix an engine for them. It is because wherever they land, the rules aren't going to apply to them anyways. Yes, yes. Where does he where does he fall? Where does he fall in the debate? That's a great question. So I'm going to quote now from an article previously published by Sequoia Capital and written by Adam Fisher, who should never be allowed to lift this article down when I say the

dick writing is like fucking PR flack journal. It's shameful. Quote, a rights based theorist might argue that there aren't really any discontinuous differences as a fetus becomes a child. And thus fetus murder is essentially child murder. The utilitarian argument compares the consequences of each. The loss of an actual child's life, a life in which a great deal of parental and societal resources have been invested, is much more consequential than the loss of a potential life in utero. And thus to a utilitarian abortion looks more like birth control than like murder. SPF, that's what they always call him, the kid Sam, SPF's application of utilitarianism helped him resolve some nagging doubts he had about the ethics of abortion and made him feel comfortable

being pro-choice as his friends, family, and peers were. He saw the essential rightness of his philosophical faith. So that's very fucked up. That is, that is so deep. Like the term choice is used at the very end there, but it's clear that like he's not thinking about this in terms of like the actual value of human bodily autonomy that does not weigh into utilitarian calculus for him whatsoever. No, that is to quote my friend Robert. No, no, no. And again, even like, look, I, I shit reflexively sometimes in utilitarianism, not because of the inherent value or disvalue of thinking that way, but about the way it gets talked about by these people. But like, if you're actually a utilitarian and you care about the greatest good for the greatest number of

people, then bodily autonomy should factor into that, right? Like human bodily autonomy is, should be hugely important to you. Yes. But no, that's not logical. All that matters is like, well, how many, if you've, if, if less resources than this have been invested in the fetus, then it's not a person. So abortion makes that fucking bullshit logic. Fuck you. You're doing too much math. Stop. This isn't a math problem, Sam. Like this is not a fucking math problem. Not everything's a goddamn math problem. Robert, he won't listen to you unless you call him SBF. And I was like, why is Robert talking about sunscreen? Yeah, we'll get that. They all call him fucking SBF. And I hate it. But also as this went on, I started using it more and more because

it's a pain in the ass to type his whole fucking last name out. I look, I, this is one where I'm not going to give him a pass, but I get it. If you write about this fucker a lot, it does make it easier. So anyway, all of this is very bad. But you know what's not bad, Jamie? What? The products and services to support this podcast. No, that's not true. They are. That's well, that might be true. I've checked. Hold on. I just ran a quick check on that and you can't do that even one percent. But what about the greatest good for the greatest number of people? And given that I'm a people, so it works out pretty well. It works out very well for me. I think that if you actually have more advertising revenue, you will actually build a

really fast train like you've been promising me you would. Yeah. Yeah. I'm going to build the hyperloop. Yeah. Yeah. And I'm going to promise you one thing. It's going to kill a hell of a lot more people than that Simpsons monorail did. And look, not everyone is going to hold you to task for that, but I am. Thank you, Jamie. Thank you for keeping me honest and ensuring that we really make a memorable disaster. Look, I'm available any time I'm not visiting my friend Liz in jail. During the summer of 2020, some Americans suspected that the FBI had secretly infiltrated the racial justice demonstrations. And you know what? They were right. I'm Trevor Aronson and I'm hosting a new podcast series, Alphabet Boys. As the FBI, sometimes you get

to grab the little guy to go after the big guy. Each season will take you inside an undercover investigation. In the first season of Alphabet Boys, we're revealing how the FBI spied on protesters in Denver. At the center of this story is a raspy voiced cigar smoking man who drives a silver hearse. And inside his hearse was like a lot of guns. He's a shark. And on the gun badass way, nasty sharks. He was just waiting for me to set the date, the time, and then for sure he was trying to get it to happen. Listen to Alphabet Boys on the iHeart radio app, Apple podcast or wherever you get your podcasts. I'm Lance Bass and you may know me from a little band called NSYNC. What you may not know is that when I was 23, I traveled to Moscow to

train to become the youngest person to go to space. And when I was there, as you can imagine, I heard some pretty wild stories. But there was this one that really stuck with me about a Soviet astronaut who found himself stuck in space with no country to bring him down. It's 1991. And that man, Sergei Krekalev, is floating in orbit when he gets a message that down on earth, his beloved country, the Soviet Union, is falling apart. And now he's left offending the Union's last outpost. This is the crazy story of the 313 days he spent in space. 313 days that changed the world. Listen to The Last Soviet on the iHeart radio app, Apple podcast or wherever you get your podcasts. What if I told you that much of the forensic science you see on shows

like CSI isn't based on actual science? The problem with forensic science in the criminal legal system today is that it's an awful lot of forensic and not an awful lot of science. And the wrongly convicted pay a horrific price. Two death sentences and a life without parole. My youngest, I was incarcerated two days after her first birthday. I'm Molly Herman. Join me as we put forensic science on trial to discover what happens when a match isn't a match and when there's no science in CSI. How many people have to be wrongly convicted before they realize that this stuff's all bogus. It's all made up. Listen to CSI on trial on the iHeart radio app, Apple podcast or wherever you get your podcasts. Oh, we are back. What a good time. So,

Sam Bankman Fried is above all else a numbers guy. And I guess as a kid, he was a numbers kid. His parents sent him to Crystal Springs Uplands, a fancy prep school in Hillsborough, California. I looked through the website because I wanted to make fun of it, but it just kind of seems like a really fancy school. I don't know. I'm sure it's a great place to get an education. They make, they put a lot of, I will tell this, they devote a lot of screen resources to letting you know that they are not racist and that most of their students aren't white. They also have a French, they also have a French cinema class for sixth graders, which is fine. But the cranky asshole in me that still has a little piece of my soul raised by right wing radio wants to say

shit about it. I was raised by left wing people and I still think that that's some loser shit. I think that that's fucking dorky and goofy and like, it's like, you know, you meet, because you meet people like that in the wild and they're sometimes they're, and maybe even often very sweet people, but I'm like trying to be like, oh, you know who plankton is and they're like, no, and then they're, but they've been watching French movies since they were like seven. And I just don't really respect that. If I made a sixth grader with, yeah, if I meet a sixth grader with strong opinions about French cinema, like, I'm just going to leave. I'm going to leave. I'm just going to walk away.

Wow. Right. Robert, that's really brave of you to march out of a conversation with an 11 year old. I am not. I'm not putting up with that shit. Absolutely not. I'm leaving this sixth grade class. My name is Robert Evans, and I think we're all doofuses. Go watch your, what, Renoir? Is that one of them? That sounds like one of them. Cloudwin, Renoir. Is he a painter or do you make movies? Renoir is a painter. I know the one you're looking for, and I was looking for it too, but I don't remember. But guess who? Do you know who plankton is? Of course you do. I know who plankton is, and I also know that at least one of the directors they study is a pedophile,

just knowing a little bit about French cinema. That's unavoidable. So he does well. Again, the school's probably fine. He does well at the school. He was notably insular. He avoided most of his classmates to play Starcraft, which is good, and League of Legends, which objectively sucks. He also played a lot of Magic the Gathering, so I am confident he did not get late in high school. This is based on extensive personal experience. Like, I just actually did some field research, and... Yeah, about four years of it.

Okay, interesting. For college, he was accepted to and attended MIT, which marked out his family's elite North American university punch card. They really hit them all now, now that they've got an MIT kid in the family. They get a free coffee. There used to be an MIT... So when I was in comedy in Boston, there was like... MIT had a secret comedy club that was just for MIT students, and it was awful. Oh, that's... Oh, God, yeah. They paid you okay, but it was like... They're like... If you knew someone who

met someone who went to MIT, and they came to your shows, and they were like, oh, we did the math, and you are allowed to come to art. They called it their speak easy. I wonder if it's still around. It was so... It was... I mean, it was not fun. Not a fun crowd, I will say, but best of luck to whatever was going on there. So he goes to MIT. He goes to MIT. He might have been at one of those shows. We're on the same page. He might have, because he joins a fraternity there. Well, Jamie, it's an MIT-specific co-ed nerd fraternity.

Oh, nice. What could go wrong? It's called Epsilon Theta, and here's how Adam Fisher, the guy I hate, described them in his article, which was bad. Quote, a co-ed fraternity of supergeeks, similarly interested in magic and video games. Thetans are fond of debating math, physics, computer science, linguistics, philosophy, and logic problems for fun at alcohol-free parties. Now, I do know a little bit about MIT, and I know another thing these nerds often do is kill themselves using nitrous oxide, because they will try to flood entire rooms with nitrous to do a 20% nitrous to O2 ratio, and kill themselves. It's a thing that happens. Look it up, MIT nitrous deaths.

All I did in college was drink too many blue moons. Wow. It's quite a thing. Yikes. What are you doing over there? I don't know. I don't know. I don't know how much I believe that they were always alcohol and drug-free parties, because if there's one thing I know from nerds, it's that they do a shitload of drugs. I definitely didn't hear of this one, because I went to a couple MIT frat parties, and they were not sober. Fun fact, one of the MIT frat parties I went to, for some reason, when I was in college, and when I would get really drunk, I would like to steal things from wherever I was,

and so I stole two critical pool balls from an MIT frat house, and someone was able to trace it back to me, and they demanded their pool balls back. And embarrassingly, I think I capitulated. I think I did give them back. I shouldn't have. Wow. Wow. Actually, so this one kid I'm finding in 99 died because he put a bag over his head to inhale nitrous, which is the fuck, man. How did you get into MIT? I don't know anything about drugs. We shouldn't be making fun of this guy. But don't put bags over your head, kids.

Yeah. I learned that in public school, no less. So many other ways to do whippets than putting a plastic bag over your head. But anyway, whatever. Next, according to the popular Sam Bankman Friede endorsed version of the story, he pivoted towards an almost obsessive devotion to ethics in his freshman year. He went vegan. He organized a protest against factory farming, and he worried obsessively over how he could change the world for the better. And it was at this point that Sam met a man who was going to change his life forever, William McCaskill. If you want to learn more about this guy, I do recommend the episode of it could happen here on Effective Altruism.

This guy is today the pop philosopher of effective altruism and long termism. He is an Elon Musk's text messages that we all got as a result of the Twitter lawsuit. At this point, he was also at MIT, and he met with Sam at a cafe in Cambridge, Massachusetts, where McCaskill works. Which one? Which one? Which one? Which one? Which one? Which one? I don't know. I'm sure it's out there somewhere, Jamie. I'm sure you've gotten a hot dog there. That seems likely. No, any place this guy's going, he doesn't have hot dogs. They're not ethical. They're famously unethical. So, yeah, you're probably right. So, McCaskill explained the concept of effective

altruism to him, which is, again, this idea that what matters is you should think kind of coldly and robotically about how you do help to make sure that your charity money does the most that it can do. But one of the big, like, arguments about it is that, like, okay, well, what if you, you know, should you save a drowning child instead of saving, like, three kids from a burning building? And it's like, that's a nonsense choice. Nobody's ever been presented with that choice at any point in the history of the human race. That is not a reason. There's no point to that ethical argument. You're not smart for debating it. New trolley problem just dropped, Robert. And it makes no sense. Yeah, it makes no fucking sense. There's like bits of it that are reasonable, which is that like,

well, you know, it makes sense to like look at the best thing you can do financially, you know, in terms of donating money is, you know, malaria prevention, because it winds up being the most cost effective thing. But it's like, okay, does that mean we shouldn't put money into making the water in Flint, Michigan drinkable? And a lot of these guys will say no, because that's not the best use of money. And it's like, well, we can do many things with money, especially if we tax billionaires and put it towards rebuilding infrastructure. A number of things can be done. What? Sorry, I had to go into my friend Elon's shitty McMation. McCaskill kind of pills this guy on effective altruism. He frames it as a strategic investment

whose success was measured in populations worth of human lives. He estimated using back of the envelope math that $2,000 could save one life. And so a million dollars could save 500 people, a billion could save half a million and a trillion dollars could theoretically save half a billion lives based on that totally legitimate math. People are math, Robert. People are math. It all works out that way. Yeah. Based on that absolutely real math, the only ethical way for a genius like Sam to use his time and talents is to become the world's first trillionaire. And I'm going to quote again from that article that I hate. No. SPF listened nodding as Ms. Caskill made his pitch. The earn to give logic was airtight. It was, SPF realized, applied utilitarianism.

Knowing what he had to do, SPF simply said, yep, that makes sense. But right there, between a bright yellow sunshade and the crumb strewn red brick floor, SPF's purpose in life was set. He was going to get filthy rich for charity's sake. All the risk was merely execution risk. His course established, McCaskill gave SPF one less navigational nudge to set him on his way, suggesting that SPF get an internship at Jane Street that summer. And so for the good of mankind, get in the finance industry and gamble like a motherfucker. It's a little asshole. I swear to God. I fucking hate these people so much. What? Oh God, makes sense. Yeah. You know, look, I think that airtight, airtight can't debate that

lot. There's no argument to be made about that logic, Jamie. I mean, I know that this is the wrong person to be turning on in this moment, but this is the dick writingist language that I've ever heard. Jamie, he has not begun to write dick. He's choking. He's choking on this thing. This man's got no gag reflex and no sign of slowing down. Jamie, I'm going to read you some passages from this that are going to make you gag. It is unbearable. Nice. And it's like, this article is like 10,000 fucking words. It took me like an hour to get through this thing. It's massive. He's like, maybe if I do it, he'll give me a kiss on the mouth. We'll see. Well, basically this was published by Sequoia, which is a massive like investment fucking fund thing

on their website. Oh, so there's the journalistic entity. Yeah. It looks like that. It looks exactly like an article from like Wired or something. Like they clearly laid it out like that. But I think it was done because they put like $200 million into his company. So they needed to justify it by making them look like a genius. It's like those articles that like are occasionally, I mean, it's more scary when they're on actual journalistic outlets and then there's just a little tag saying like, Hey, this is sponsored by RuPaul's fracking farm or whatever the fuck. And it's like, why fracking? RuPaul and ExxonMobil. Oh, LGBT icons. So yeah, Sam Bankman Fried gets into finance and he's a very good trader as,

I mean, I have no way to judge this, but Sequoia says he was a good trader. He was good at making a lot of money for other people and also a lot of money for himself. Besides, he gave away 50% of his income to his favorite charities, but those charities were mostly the center for effective altruism and 80,000 hours, which is also an effective altruism charity. What are they doing with money? That's a great question, Jamie. It allows guys like McCaskill to live very well while also saying they only take $30,000 in salaries and give away the rest because their lives are heavily subsidized by these organizations that allow billionaires to pretend to be heroes. Oh, so like charity. So like charity, yeah. So he remains there

happily for years until 2017 when he begins to feel as if something is not right. Now, spoilers. He's having a quarter-life crisis. He is having a quarter-life crisis. And this kid absolutely is a con artist. And what I am giving you is the polished, press-friendly version of the story for a guy whose entire life, as far as I can tell, was one long setup for an ambitious con. So when I say stuff like he gave a lot of money to charity, because there's like other charities he gives to some of which sound reasonable, but I have actually no evidence that he did. Like I have no evidence that he did. And I haven't seen it. So when I say stuff like he felt like that, or when they say stuff like he felt unfulfilled at Jane Street,

that doesn't mean he actually did, because we are at present reliant on a lot of reporting from back when this kid was the toast of Wall Street. Now, after his life fell apart and his company crashed and it became clear that he was a financial criminal, it also came out that the guy who wrote the big short has been following him for six months. So I suspect at some point it's got, that's going to be fun. We're all going to be in for a real treat when that book hits. I love, I love when you're like, and guess who is following him around? You're like, oh, he's got Michael Lewis on his tail. It's like, and also if you're an investor, shouldn't like, it's somebody involved in one of these companies probably should have been able to find out like,

oh, hey, the big short guys hanging out with him, that probably means this is a giant financial crime. That guy's not going to just hang out with a dude who's good at legally making money to write about how good he is at making money legally. That's not Michael Lewis's beat. I'm kind of going for like a change of pace this time. I'm just going to try to see a guy who's like doing something right. Yeah. Michael Lewis, aren't you the guy who only writes about financial crimes on like a gigantic scale? No, no, no. I think that this is, he's just probably just trying to network. Yeah. He just, just, she just really liked this guy's attitude towards altruism. So anyway, um, yeah. Anyway, here's how that again, very dick writing PR,

flack motherfucker wrote about what happens next. Quote, he was, he realized, too secure. SBF's mind had been trained almost from birth to calculate as a schoolboy, the hedonic calculus of utilitarianism and him trying to maximize the utility function measured in the utilities, of course, for abortion during his teenage game. I know, I know, that's a sentence. That's a sentence. Does he say, of course? Uh, no, no, I said that. Oh, we know he does say, he does say, he does say, of course, yes, measured in utilities. Of course. Of course. Oh, suck my ass. You fucking loser. Unbelievable. During his teenage gaming years, his mathematical abilities allowed him to sharpen

his tactics and win. And of course, every trade SBF ever made at Jane was the subject of a risk reward calculation. All of it boiled down to expected value. The formula is fairly simple. If the amount one multiplied by the probability of winning a bet is greater than the amount lost multiplied by the probability of losing a bet, then you go for it, irrespective of units, utilities, euros, dollars, we're all subject to the same reckoning. But at Jane, SBF osmosed another trading principle. He learned to be risk neutral. In simple terms, a trader given a choice between a $50, $50 and a 50% chance at $100 must be agnostic if they want to maximize the expected value of earnings over a lifetime. Those who prefer the sure win are risk averse,

and those who would rather gamble are risk lovers. But both risk lovers and the risk averse are suckers equally because over the long run, they lose out to the risk neutral who take both deals without prejudice. That makes no sense. That makes no sense at all because like you're assuming you have to like choose between one. Can you just take both? Is that like the offer? Because it seems like the whole thought experiment is about choosing between one. None of this makes very much sense. I had a brain hemorrhage in the middle of that, and then I couldn't stop thinking about do you think that utilitarians, how do utilitarians feel about kissing with tongue, do you think? How many utils does it take to kiss with tongue or don't waste your time?

Let me write the equation out, Jamie, and try to sketch out the math on. I think they wouldn't be into it. I think they would be like, what's the point? Right. Yeah, that seems real. I only have five utils. Jamie, I got to continue this. What the fuck did that sentence say? I don't know, but we have to read another one. Quote, here SPF realized was the rub. When he applied this principle to his own life, he came up short. There was little chance he'd get himself fired from Jane Street. Thus, the decision to stick with Jane was a risk averse preference. It was the logical equivalent of being offered a choice between $50 and 50% of $100, and saying

give me President Grant. SPF was risk-neutral on behalf of Jane Street, but not, he realized, for his own life. To be fully rational about maximizing his income on behalf of the poor, he should apply his trading principles across the board. He had to find a risk-neutral career path, which, if we strip away the trader jargon, actually means he needed to take on a lot more risk than the hopes of becoming part of the global elite. The math couldn't be clearer. Very high risk multiplied by dynastic wealth. Trump's low risk multiplied by mere rich guy wealth. To do the most good for the world, SPF needed to find a path on which he'd be a coin toss away from going totally bust. The path is risk-neutral, but that means taking a lot of risk because the most

risk is the only way to become the wealthiest person in the world, and only by becoming the wealthiest person in the world can you avoid risk. You get it, Jamie? Yeah, and that's the most ethical thing you can do, right? That's clearly the most logical ethical way to live. So do you think that they kiss with tongue or not? I mean, I think what he's saying is in order to avoid the risk of catching an STD, you have to take on a job as the bathroom mat at a brothel. That's the risk of verse or risk-neutral presentation. Oh, frantically rubbing my final brain cells together, trying to make heads or tails of that, and just like nothing is sparking. It is howling clown shit. It is absolute barking nonsense. It is like a vortex of bullshit to be like,

so anyways, it's really clear and the math couldn't be clearer that he has to be the most richest guy or everyone is going to die. It's actually really urgent. You know, it's one of those things, because I have known a number of rich guys in my life, and some of them are inlady. What's for you, Ron? There's two kinds. There's people who were poor at one point, and some of those people are unhinged, and some of them still remember being poor enough to talk like normal people. And then there's people like this, who Sam was never rich as a kid, but he lived in this rarefied air where finance and the concept of worrying about money or his economic status was not a thing, because everyone around him when he was a kid

was so high status. He's just lived in this. It's not even a bubble. He grew up on a different planet. The world does not exist to him the same way it does to everyone else, and so that's the only way you can talk about things in this way. That sort of sinister thing where you're talking about everything, it's so easy for him and people like this to think of other people as theoreticals because they've never had a problem before, so it's like, oh, problems are a game of chance, because I've never met a person. Right, right. He has never known a human being, just Stanford professors. Exactly. Just Stanford professors and problems in his video games. Yeah, and not that I'm afraid of people who identify as nerds coming into my mentions.

I'm not saying that that's everybody, but I'm saying he's not been socialized like a person, and that mostly has to do with class. Yeah, god damn it. So the next thing that SBF did after deciding he had to quit Jane Street is start pondering how he might change the world in a way that minimized his risk by maximizing his risk or some shit. Anyway, as he told it, he considered four career fields, and these are his notes on the four things he might do after being a traitor. Number one, journalism, low pay, but a massively outsized impact potential. Number two, running for office, or maybe just being an advisor. Number three, working for the movement. EA, effective altruism, needs people. Number four, starting a startup. But what exactly?

Number five, bumming around the Bay Area for a month or so, just to see what happens. Now again, sounds like a bad bumble day. Like, so what do you do? He's like, um, well, um, so startup maybe, but what is a startup really? What is a startup? So again, he spent years working in finance. He's got plenty of money. He came from the Bay Area. So five was an option, and it's one he took. And by the way, like as a general rule, if you decide to quit your job and you have the financial ability to putter amount around for a month or two and think things through, not a bad idea. But Sam is going to do this in the worst way possible. He eventually hits upon his great next idea, which is to make a shitload of money in crypto. Now, when he quits Jane Street is 2017,

and if you guys can remember back that far, that's the first big winter when cryptocurrency boomed, like kind of all throughout the last quarter or so of 2017. Bitcoin was just sailing up like massive rises. Ether had a big rise too. This kind of went around so young early 2018. A lot of Bitcoin nerds who people had been making fun of for years became overnight multimillionaires. And this was kind of the first point at which normal people started to think, shit, maybe I should get into this. Maybe I can make a lot of money, right? This is this is the thing that blew up Bitcoin. And there was a crash after this, but it recovered yada, yada, yada. Sam was savvy enough to look at this and know that these moments where this thing where a lot of funny money is on the

table, but there's no regulation and regular people have started to get interested because they think they might get rich. This is the point at which an unethical person can make the absolute most money in a financial market, right? And you can be unethical to quote one of the greats. You can be unethical and still be legal. That's the way I live my life. And you know who else lives their life that way? Jamie Loftus. You and you're tossing the ads. Yeah, that's right. I am indeed. I am indeed, baby. Uh, here we go. All right. During the summer of 2020, some Americans suspected that the FBI had secretly infiltrated the racial justice demonstrations. And you know what? They were right. I'm Trevor Aronson and I'm hosting a new podcast series, Alphabet Boys. As the FBI

sometimes you got to grab the little guy to go after the big guy. Each season will take you inside an undercover investigation. In the first season of Alphabet Boys, we're revealing how the FBI spied on protesters in Denver. At the center of this story is a raspy voiced cigar smoking man who drives a silver hearse. And inside his hearse was like a lot of guns. He's a shark and not in the good and bad ass way and nasty sharks. He was just waiting for me to set the date, the time, and then for sure he was trying to get it to happen. Listen to Alphabet Boys on the iHeart radio app, Apple podcast or wherever you get your podcasts. I'm Lance Bass and you may know me from a little band called NSYNC. What you may not know is that when I was 23, I traveled to Moscow to

train to become the youngest person to go to space. And when I was there, as you can imagine, I heard some pretty wild stories. But there was this one that really stuck with me. About a Soviet astronaut who found himself stuck in space with no country to bring him down. It's 1991. And that man, Sergei Krekalev, is floating in orbit when he gets a message that down on earth, his beloved country, the Soviet Union, is falling apart. And now he's left defending the Union's last outpost. This is the crazy story of the 313 days he spent in space, 313 days that changed the world. Listen to the last Soviet on the iHeart radio app, Apple podcast or wherever you get your podcasts.

What if I told you that much of the forensic science you see on shows like CSI isn't based on actual science? The problem with forensic science in the criminal legal system today is that it's an awful lot of forensic and not an awful lot of science. And the wrongly convicted pay a horrific price. Two death sentences and a life without parole. My youngest, I was incarcerated two days after her first birthday. I'm Molly Herman. Join me as we put forensic science on trial to discover what happens when a match isn't a match and when there's no science in CSI. How many people have to be wrongly convicted before they realize that this stuff's all bogus. It's all made up. Listen to CSI on trial on the iHeart radio app,

Apple podcast or wherever you get your podcasts. And we're back. So, Jloft, Jloftus. Yes, it's actually Jlo. It's the first, I'm the first person to use that and it's really starting to catch on. Bold. Oh shit, Ben Affleck's calling me. One sec, Jami, let me take this call. Oh, that's my boyfriend. No, he's just weeping outside of a dunk and donuts and pocket dialed me again. Normal Ben stuff, am I right? Oh, Ben. Sometimes I meet up with my friend Ben at the Atwater Dunks and I really set him straight. It's nice. Yeah, Ben Affleck sober for years and looks like he's hungover in every single photograph.

What a king. I know, I do, I do. I have a lot of, there's just something about him that warms my heart. It's his tattoo of a phoenix. Love his back tattoos. It's just that takes courage, you know, moral courage. I just think he's so amazing. He's fucked up. I think we need to add that back tattoo and still got to Mary Jennifer Lopez. I think, I think we should put his name on the Vietnam Memorial in honor of the courage that it took to get that, that back tattoo. I mean, he is braver than the troops and he did for a while hold, hold the status of most divorced man in America. But that is now. But he fixed it. But Mary Jennifer Lopez. I feel like the contest. I was going to say, I was going to say they did, they did get married

at a plantation. I don't know. Yeah, that, I mean, that's all, that's all very fucked up. But I do feel the contest for most divorced man. Did you ever watch Dragon Ball Z as a kid, Jamie? Yes, I didn't. No, I didn't. Well, there's this thing that Dragon Ball Z would always do this thing where like, you have this guy and he's like the most badass person ever that everybody has to figure out how to fight. And it's this big problem because this is the most terrifying thing in the universe. And the next season, like there's something that's like a thousand times scarier. It's just this like power creep kind of thing. I feel like we've all been dealing with that with a divorced guy because divorced guy Ben Affleck, not, doesn't even register on the

divorced guy scale next to Elon. We're living in the edge of Kanye and Elon. There's some really divorced guys. And look out because Tom Brady is about to fucking hit the World Trade Center. Tom Brady is going to go super say and divorced. It's amazing. That is going to, a third divorced man has hit the World Trade Center. It is bad. It's bad. Incredible. So back to Sam Bankman Fried. He is just, he has just decided to get into crypto. Now the first way to make money in crypto that occurred to him because he spends a bunch of time looking into the market and he finds, he sees that there's this thing called, I think it's like the, the kimchi premium or whatever like that. They come up with some

weird kind of racist name about it, which is basically Bitcoin is worth a lot more in Japan and Korea than it is in the United States, right? It's like worth 15 grand in Japan and Korea and it's like 10 grand in the United States, something like that. Why is that? There's a variety of complicated factors. Basically, there's a bunch of different laws around banking and who can and cannot hold accounts and execute trades in those areas that leads to this premium because like normally if a premium like that, if the markets were kind of accessible to each other, if Bitcoin is worth 15 grand in Asia and 10 grand in the US, then you buy Bitcoin in the US and you sell it in Asia and you get free money, right? Very obvious. If you can, but you can't do that because you

can't get access to the, as an American, you can't like get a Chinese account in order to buy Bitcoin there, right? Or a Korean account or a Japanese account. There's all these laws that make it difficult to try. So you can't just do like a banking VPN. No, you can't, you cannot do that. And no one can figure out how to do it, how as a Westerner to sell Bitcoin over in these parts of Asia and get that premium, right? And like just get a bunch of free cash. Sam figures out a way to do it, which is basically like picking up a pile of free money, right? If you're buying Bitcoin for 10 grand and other people want to pay 15 grand for it, you're just making cash, right? And primarily the way he does that is through friends in the effective altruism community who are like placed

in banks and stuff over in Asia who like help him figure out how to do this. I'm not going to go into the details that they, I mean, this fucking Dick writing article spends a long time explaining how he figures this out. And it might even have been legal. He may not have broken the law to do this, although it's kind of hard to know because all of this is complicated finance gibberish. By the way, I'm honestly, I'm not getting a word of this. Finance guys call this an arbitrage. And it's basically the ideal that if you can, if there's a resource that's worth a bunch more money one place than it is the other place, you buy it where it's cheap and you sell it where it's expensive and you get free money,

right? That makes sense. Yeah. Yeah. Yeah. If, if I am, Jamie, Jamie, if my drug dealer sells me ketamine for like 40 bucks a gram, right? And I don't know at a house party, you're hanging out at a couple of blocks away. Somebody, gib says that they'd pay $70 a gram for ketamine. You can make 30 free bucks by taking the ketamine you bought for 40 bucks and selling it at that other house party, right? Okay. So that was you speaking to me in terms that you would understand, but I do think I got it. Yeah. Yeah. Yeah. Yeah. Ketamine makes everything make sense. Yeah. So you just gave it to me in Robert speak. I got it. I got him. He makes, he makes a shitload of money doing this. And he decides to roll this money into a company, which will allow him to hire

employees to gamble with cryptocurrency at scale to try and find different fucked up little areas like this where they can make a bunch of money by executing trades. He picks members of the EA community as his first employees, including Carolyn Ellison, a former coworker at Jane Street, who we will be talking about in a little bit. And Nishad Singh, a former Facebook employee, industrial scale Dick Ryder, Adam Fisher, lets you know that Singh is an incredible, almost impossibly good human being by describing him this way. He often wears a t-shirt with the words compassionate to the core, printed in diminutive all lowercase font over his heart. Do you think that this guy, this writer, like just at this point, he's on like a bucking Bronco of SBF's

dick. Like it's just absolutely ridiculous. He is 50% this guy's dick by weight. It is unbelievable. What does he think is going to happen for him? He's going to get paid by Sequoia to write a 10,000 word article that they then pull from their website when it becomes clear this man is a massive financial criminal. He's like, no, my greatest work. It's extremely funny. Now look, I don't know Singh, but based on the description that guy gives, I am convinced he's murdered a child with his bare hands. And that is my headcanon for this man. No one else would wear that shirt. So these EA nerds all form a trading firm called Alameda. And in doing so, they came down on one side of probably the biggest split within the crypto community. See, the core of the idea

that's not bad that exists within cryptocurrency is that decentralized state controlled money is like, has problems, right? There's things about that that are bad. And it could be cool and useful to be able to separate the money from the state if you could do that. If you could do that in a way that reduce the state's power to lock down the bank accounts of dissidents and stuff like that. There's cool benefits to it. I just had an idea. What if we did that, but then we gave all the money to one guy? Well, that's kind of what keeps happening. SPFs on the other side of this argument, right? Because obviously most of the actual benefits of a truly decentralized online currency are just you can buy drugs with it over the internet. But still, that is a real

value. People do in fact buy drugs using cryptocurrency and that's fine. And the committed ideological crypto people tend to keep their money offline in a wallet only they can access, right? So you basically, you have like a hard drive that has all of your crypto on it. And that only touches the internet when you plug that into your computer and you use it to make a transaction, right? And otherwise it's completely offline. And so people can't just take it from you, right? Right. That's the smart people. This is a pain in the ass though, right? Like keeping it in this thing. Like there's all these security people. You can lose your password. People actually do lose their money this way too. But anyway, there's a measure to which it makes sense and is

secure, but most people don't want to go through that pain in the ass. So they put all of their cryptocurrency and what are effectively crypto banks, these exchanges. And these exchanges are places like Mt. Gox, which a few years ago all of the money got stolen from, and FTX, which Sam Bankman Freed makes, which also all of the money gets stolen from, right? So the people who are like, no, you shouldn't do what Sam is doing. You shouldn't make an exchange because that's not decentralized. And we like this because it's decentralized. They are the ones who get robbed less often because they're a little smarter. And that's part of the point. These exchanges, they're meant for people who don't see crypto actually is like, well, I want to fight the

state by removing my money from the banking system. They're for people who are like, I want to try to get rich quick by gambling, right? And that's why those people are also the most vulnerable to scams. Robert, anytime you explain crypto with me to me, even though I know I need to understand it for the context of the episode, I just feel like I'm in a corner at a house party and I'm holding a clammy bud light and it's mostly empty. And you're like, just one more thing though, because I mean, the important thing to understand is that what Sam has done. So crypto is like unregulated, right? It is detached from any state. Okay. Right. Which is why people like it. Which is why people like it. Yeah. Sam, what Sam has done is come in and he's not the first person

in the person to do this and said, I have built a place where you can keep all of your crypto and you can trade it with other crypto to try to make money the same way people do with the stock market, right? Where it is more secure. No. Because here's the thing, Jamie. He says it's secure, but here's the thing. So you don't have the banking system, how banks used to just go bust and everyone would lose their money and it caused a great depression. You get that part of the history of finance, right? Oh yeah. One of the characters from Titanic killed themselves over that. Exactly. Exactly. So that was a big problem. And we developed a bunch of regulations so that I know this part, Robert. So what Sam has done is he's built a bank that has none of that so

that people can gamble on the internet, right? Okay. So that's all you need to understand. Great depression. Yeah. Got it. Yeah. Exactly. That's all you need to understand is that Sam has built a big unregulated bank for people to gamble with. Awesome. Yeah. Anyway. And this is, it could not have been clearer that this was a Ponzi scheme. In 2018, they put out an advertisement to investors and I'm going to read it right now. I think you'll be like, we offer one investment product, 15% annualized fixed rate loans. We can accept both fiat and crypto and can pay interest denominated in either. These loans have no downside. We guarantee full payment, the principal and interest enforceable under US law and established by all parties legal counsel. We are extremely

confident we will pay this amount and the unlikely case where we lose more than 2%. Anyway, again, I'm not a finance expert. Neither are you, Jamie. Banks offer like 3% return on like a fucking, if you're like putting a pile of cash in a bank and you're getting 3% back, you're doing okay. 15% nonsense. That nobody, no one can guarantee that. It's not a real product. I was pretty struck by their use of the language. Like we're pretty confident we're going to be able to play. Sounds like someone who's not actually very confident. Also, if you are investing in the stock market and someone says, this investment has no downside, it's impossible for it to fail, that person's lying to you and breaking the law because it could and often does.

Right, because then you're making an almost guaranteed false promise. Yes, you cannot say this stock can't go down. If you're a stockbroker, you cannot tell a client it is impossible for your investment in this company to fail because that would be a crime. But with crypto, it's uncharted territory, baby. It's uncharted territory. You can do anything. This is also a Ponzi scheme, right? What fucking Madoff was doing is he had this investment portfolio that was, I forget what the exact, but it was promising an unbelievably high return and guaranteeing that people would get it, right? And what he was doing is as new people put money into the investment, he was using their money to pay the old investors so that nobody noticed

that things were fucking up, but eventually new people stopped putting money into the thing and it all fell apart. And a lot of people lost billions of dollars, right? Like, yeah. I'm back. He was also using a lot of that money to live, you know, an incredibly lavish, rich guy life. Anyway, I only understand financial concepts when Selena Gomez breaks the fourth wall and explains it to me. I'm doing my best to be your Selena Gomez, but I just... Or do you know who Selena Gomez is? Yeah, she's that chick from the thing. Nailed it. She's kind of in the middle of a fun scandal right now where she's in a feud with someone who donated her a kidney. What? Which is a very funny online feud dynamic. How do you get in a feud with that person?

Because she... Okay, if you asked, Robert, this is something I can explain to you. So what happened was Selena Gomez needed a kidney donated. Her close friend who works in the industry, I don't know who it was, but I guess she's sort of famous, gave her a kidney a couple of years ago. Then Selena Gomez turns around a couple of weeks ago and says, I have no friends in the industry except Taylor Swift incomes her kidney donor being like, oh, that's interesting because I'm one kidney lighter. I'm not quoting it. But yeah. And then Selena, instead of apologizing, Selena Gomez is like, oh, sorry, I didn't thank every person I've ever met in my life. Yeah, but I mean, Selena, she did give you a kidney. Yeah. That's a special

kind of friend. You guys weren't just drinking buddies. She literally gave you a kidney and that's what I didn't share with you. She did the thing that you would use as like a joking description of someone who'd done a lot for you to like hyperbolically say that you owed them a lot. You know who's done... And implying that Taylor Swift has done more for you than your kidney donor is so... I just think it's the funniest feud of all time. All right, we were talking about cryptocurrency. We weren't. We were talking about Selena Gomez. Let's get back to cryptocurrency. Okay. So to talk about what came next after establishing Alameda, I'm going to quote again from that Sequoia write up.

At this point, mid-2019, SBF decided to double down again and scratch his own itch. He would bet Alameda's multi-million dollar trading profits on a new venture, a trading exchange called FTX. It would combine coin bases, solid, stolen, regulation loving approach with the kinds of derivatives being offered by Binance and others. He only gave himself a 20% chance of success, but in his mind, SBF needed extreme risk to maximize the expected value of his lifetime earnings. And therefore, the good his earned to give strategy could do. The fact that he was, by his own lights, overwhelmingly likely to fail was besides the point. The point was this. When SBF multiplied out millions of dollars a year, a successful cryptocurrency exchange could

throw off by his self-assessed 20% chance of successfully building one, the number was still huge. That's the expected value. And if you live your life according to the same principles by which you'd trade an asset, there's only one way forward. You calculate the expected values, then aim for the largest one. Because in one, but just one alternate future universe, everything works out fabulously. To maximize your expected value, you must aim for it and then march blindly forth, acting as if the fabulously lucky SBF of the future can reach into the other parallel universes and compensate the fail-sun SBFs for their losses. It sounds crazy, but perhaps even selfish, but it's not. It's math. It follows the principle of risk neutrality. Yes, it actually

is crazy. That's not math. I'm sorry. That's actually not math. That wasn't math, but that was a lot of words all at once. That is like, oh my God, the spiraling logic of this. You are using hundreds of words and a high-minded bullshit rhetoric to be like, gambling is the best way to make money. He used fabulously three times in one sentence. Yeah, man. You know who I've heard this basic argument from? My friends drunk in Las Vegas explaining what they're trying to play at the Crab's table again. Why they don't want me to leave the little horsey game. Someone's like, no, don't leave the sex in the city slot machine. And here's why. You want to hear my mathematical thinking on gambling, Jamie Loftus, because this will make more sense than anything that happens

in the Sequoia article. Okay. When I go to Las Vegas, I find me the penny slots where I can see the most waitresses walking around with those little trays that they have the drinks and stuff on. Then I sit down at them and I don't start to play until one gets close to me. And then I press the button as soon as she walks past and I like catch her attention. And then I get a free drink. And the way that it works out is that as long as I can get more free drinks than I'm spending at the penny slots, and mostly I'm just reading a book and hiding it while I'm at the penny slots, and I only press it when the waitress gets near. Then I can drink effectively for free, right? It works out to be like 25 cents a drink if you're really smart about it. That is my financial

advice to all of you. I do respect that. How you make it even better. I used to go with a bag, because when I was poor, what I would do is I would go to Vegas once every couple of years, usually for work. And I would get all the free drinks, which came in glasses a lot of the time. And I would keep the glasses. And so I was able to furnish my apartment with stolen Las Vegas glasses. I love stealing glasses. I've stolen my fair share of glasses in Vegas. Sometimes I would get up to the floors where there were the nicer hotel rooms. And I would find all the people who'd set out their plates and stuff from like room service. And I would just take those and take them back to my house. I respect that. I'm trying to think. I was like, I don't have a real system for... Well,

actually, when I go to Vegas, I always stay at the hotel with a roller coaster on top. And here's what I do. I go on the roller coaster once, sometimes twice. Then I go see one show. Usually it's horrible. The last time I went to see the Backstreet Boys. And guess what? I found out one of the Backstreet Boys isn't QAnon. And then I got bummed up from this. It was a real bummer. That was a fun text plan. The point I want to make, Jamie, is that what I just described to you, my Vegas strategy, has made me infinitely more money in net profit than Samuel Bankman Freed is actually going to make in crypto currency. Oh, fun foreshadowing. Can't wait. So that's all. He would never hang out near waitresses, though, because he's probably afraid

of women. He's probably afraid of them. But I am fine with asking women for a free drink as long as I'm paying at the penny slots, you know? So it's not weird. Wow. Feminist icon, Robert Evans. Getting those shitty Vegas Irish copies because they come in the glasses. I want the most. All of those are nasty. Yeah, but I like the glasses they used to come in. I know, but then there's the consequence of having to drink what's inside. Well, you know, Jamie, that's why they call me a hero. Nobody does. The Mahatma Gandhi of the West, they call me. The Jesus Christ podcasting. These are all things people call me. If you're going to lie, make it realistic. James, so James, so anyway, let's continue. I'm like, yeah,

I think it's hard to justify being risk averse on your own personal impact impact. SBF told me when I quizzed him about it, unless you're doing it for personal reasons. In other words, it's selfish not to go for broke. If you're planning on giving it all away in the end anyway. Again, just clown shit. So all of this is a con spoiler. So you don't have to think that much about it. In a recent series of text messages with a Vox journalist after his entire exchange exploded and everyone found out he was a financial criminal, Sam Bankman freed, more or less admitted that everything he'd had to say about effective altruism was a con meant to get people to trust him and invest in his company. And I'm going to read the text. Yeah, I'm going to read the text

to you between him and this journalist who, by the way, he put money in the box. So he helped fund this journalist. Wow. So the ethics stuff, this is the journalist. So the ethics stuff, mostly a front, people will like you if you win and hate you if you lose. And that's how it all really works. Sam, yeah, I mean, that's not all of it, but it's a lot. The worst quadrant is sketchy and lose. The best is win plus question mark, question mark, question mark, clean plus lose is bad, but not terrible. He also misspells terrible, but whatever. The journalist then replies, you were really good at talking about ethics for someone who kind of saw it all as a game with winners and losers. Yeah, he, he, I had to be. It's what it's what reputations are made of to

some extent. I feel bad for those who get fucked by it. But this dumb game we woke Westerners play where we all say the right shibboleths. And so everyone likes us. And that's the actual truth here, right? That's the thing that's honest about it. It's like, man, it was all of this talk for everyone. That's the entire, this miscasual motherfucker. The only reason his effective altruism thing exists as a funded thing is as a fucking shibboleth for billionaires who don't want to pay taxes and want to let the world clumb crumble around them while sucking as much value out of the working classes they can and want to pretend like they're heroes at the same time so that people write their dicks and articles like that fucking sequoia piece. That absolutely

fucking ridiculous text actually is like a very important document. It's incredibly important. It's deeply crucial. I hate that there's such a crucial document that also includes he he in it. There's nothing to be done about that one, Jamie. Look, it doesn't feel good, but you know, our previous most important document to that effect was an IM that said, haha. So a text with he he is kind of the logical progression. That is fascinating. Do you have any like insight into like why he would so freely admit that now? I don't actually. One of two things has to be happening because again, the spoilers it this all falls apart. His exchange goes from worth $32 billion to worth basically $0 in the space of literally my head. Anytime you say it

falls apart like 20 24 hours. This happens. His net worth falls 94% in a day. Like it is it all because they realized that all of the money is gone that he'd been taking money from one business and using to gamble in another and also to pay him and his friends and all of the money that the investors had put in when they tried to withdraw it like their money that was supposed to be in there on paper. None of the money existed because again, he'd stolen it. Anyway, the context of this article makes it clear that he felt like I don't know whatever. This was all a confidence game, right? That's the key. Yeah, all of this could work and the balance she's people were looking at their balance. She I'm making money. I'm making money. These

returns are great. And that money existed on paper until they tried to take it out because then it actually wasn't there because he had already frittered it away. It's a confidence game. And we haven't, you know, that's the way it actually worked. We also know this is all still coming out. So I'm not going to get too much into it, but we know that he had FTX loan himself. Sam Beckman freed about a billion dollars. Like his paper value was like 22 billion, but he gave himself basically a billion dollars and other people's money. Although he may have gambled that away. It's really unclear how much money he actually has liquid at the moment. Okay. Do we think he has any? I have no idea. Okay. Either either he was

like actually a gambling addict and a narcissist and he really did lose it all, or this was a con from the beginning, knowing it would all collapse and he got as much as he could out of it and he's going to wind up someplace without extradition, right? Like that was the goal. If you asked me a couple of years ago, I would have said it's the latter, but I feel like the last couple of years have demonstrated so often that like people are just straight up not smart and don't have a plan and it is all a narcissist shell game. It's unclear at the moment. I'm going to read you some things at the end here and you can kind of make your anyway, whatever. So after starting FTX, the company moves to Hong Kong and then the Bahamas and they use, they buy these very like a

$39 million dollar mansion that he lives in with his friends using FTX tokens, which is like internal cash that his company issues based on the perceived value of the company. They don't, how many rooms is that? It's a shit load and they're able to buy it because everything's like their paper on paper, they've gone from nothing to worth $32 billion in like a year or two and these these idiot like property owners and the Bahamas are like, well, clearly the best thing we could do is buy this building using the fake money they created for their own company that they tell us is worth a lot of money. This is worth it. So since everything collapsed, some people that SBF had like reached out to as early investors have commented about why they didn't invest in

this company in the early days and most of them it's because like what they could see of his investments, the tens of millions that he promised to charities in the long positions and risky crypto companies didn't make sense. They would look at like the things he was buying with the company assets and the things that like he was investing in and be like, well, there's no way he could have that kind of liquidity if this is a legitimate exchange, right? He can't have that kind of cash on hand. It doesn't make any sense. Rich fucking assholes always tell on themselves like that. That's funny. And what's funny is that like I found one of these guys who like, yeah, I didn't invest because I could tell it was a con and then was like, but I didn't tell anybody because I

didn't want to get yelled at. That's unfortunately I do see myself in that statement a little bit where I was like, oh, someone might be, someone might send me a rude text. I guess I won't say anything about this. Yeah. Oh my God. It's very, very goofy bullshit. I don't know. I'll tell you one thing, Jamie. He's a spineless guy who still has his fucking money. Wow. You're in love with him. That's what? Wow. Yeah. You know, whatever. It's the finance industry. They're all ghouls. They're all ghouls. From what we can actually tell now, because again, this fucking Captain Dick Ryder, the bad writer, like I have to read you another quote that I didn't have in my script to give you an idea of just how much he fucking, how much he loves SBF. Here's a quote

from him. Okay. Yeah. This is actually Jamie. Oh boy. This is when Captain Dick Ryder is hanging out with him in the Bahamas at his office. He's like, what if we kissed? Sensing an opportunity for connection, I chip in with my own two Satoshi, which is two cents, but a Bitcoin term anyway. I'm going to walk into the ocean. Wow. Okay. I don't pay any attention to social media. Not because I have any moral case against it, I say, but because for me, reading books is the highest bandwidth way I know to get quality information into my brain, which just craves the stimulation. I'm addicted to reading, which explains how I ended up being a writer. Oh yeah, says SBF. I would never read a book. I'm not sure what to say. I've read a book a week from- I hate them both

because I'm not sure what to say. I've read a book a week for my entire adult life, and I have written three of my own. I'm very skeptical of books. I don't want to say no book is ever worth reading, but I actually do believe something pretty close to that, explains SBF. I think if you wrote a book, you fucked up and it should have been a six paragraph blog post. Meanwhile, this guy's writing a 10,000 word article writing a stick that he will not read. This is like two hits. It's like two guys whose heads are made out of rocks, just one clonking against each other repeatedly. Just wait, Jamie. It hasn't gotten as bad as it's going to get. Whatever the case, I find myself sad for the man, and it occurs to me

that my reaction is exactly what might be expected from a beta in the brave new world crypto is creating. Whoa. How can you write that and not leap off the top of a building? She literally self-identified as a beta to what? What I love about this is just like when we have to take it, we have to take it as given that crypto is creating a brave new world, and none of us has any choice in that. It's inevitable. It's unstoppable. It's going to dominate everything, which is like- I would capitulate to our beep beep boop boop overlords. Yeah. So I think again, what I wonder, does he think I think? Wouldn't someone with IQ points to spare realize that dismissing books, all books, is essentially worthless? Might Rial a writer?

Was he playing with me? Is this fun? Is this humor? I'm satisfied with my meta analysis until I realize that one can always increment the level of strategic play in this sort of game. It's like poker. Level one is just thinking about how to strengthen your own hand. Level two is thinking about what your opponent's hand is. Level three is thinking about what your opponent thinks your hand is, and so on. And since SPF is obviously a genius, I should simply assume that, compared with me, SPF will always be playing at level in plus one, which makes my analysis of the intent behind SPF's books for losers idea spiral into infinity and crash like a computer. Robert, is this how you write about me and your diary?

No, Jamie. Do you know what the only ethical, speaking of ethics, you know what, if you think this way about conversations, the ethical thing to do is fill your pockets with rocks and walk into the ocean. Wow, you're wolfing this guy. Yeah, I absolutely am. You are wolfing this guy. Him and Sam Bankman-free. I could not hate these people more. I mean, they're both, there's never been two wronger people having a conversation. And of course, it came out, he's just like, well, obviously he's a genius. We have to assume that because he became a billionaire, and he's like, no, he was never a billionaire. Well, Robert, in his defense, that's meth. He did the meth. He faked a balance sheet. We've now gotten access because he had to like

go to the bankruptcy and step down. So there's a caretaker trying to get people's money out of the company. And we know shit. Like we've seen the Excel files where they kept their financial records. And it's him being like, this is basically bullshit. Like, sorry about this. We fucked this up. We weren't actually keeping records here. The company balance sheet, there was no accounting department. People would file their like, like when they would spend hundreds, tens of hundreds of millions of dollars on things, they would just message each other on signal about it to get approval and had delete deleted messages on. So there's actually like no record of a lot of the accounting. They did at one point, hire an outside accounting firm to handle their accounting of this

$32 billion company. And the firm they hired is the first it bills itself as the only metaverse based accounting firm. Oh, my God, the accounting firm for this $32 billion company exists entirely within a crypto themed video game called Decentraland. It is so fucking stupid with everything you're saying. Okay, so this is really this is bad. And this feels bad to hear. I have a question. Yes, Jamie. Who is I guess, because I am I am kind of back in in Lizzie Homes land because that whole last I mean, like departments that should be, you know, taking care of shit don't even exist, which is very Theranose adjacent to me. Theranose. Yeah. Theranose in, if you will, as both written books, we can just make up. Yeah, of course. Yeah, that's mostly what

writing a book is for sure. I view myself as the beta of this conversation. And so I feel comfortable asking you, Robert. Who is ultimately affected by this? Like what is the like trickle down of this? What happens? Is it just other rich assholes? Or does it affect regularly? Like does it affect? Probably there will presumably be some here's the thing. And here is why there's that lawsuit against like Larry David and all those other guys who appear in the FDX app. Yeah. Presumably a bunch of regular people got suckered into putting their money on FDX and those people probably lost some money. That said, for the most part, it's fine because most of the people who lost money are like gamblers who probably suck as much as this guy did.

And it's one of those things. There's just an article, I think at financial times where someone was like actually, and I think they actually had a good point, we shouldn't regulate the crypto industry because if we regulate it, it will be brought in closer to the actual financial industry as it exists and banks will put more investments into crypto and it will get seen as like legitimate and backed by the state. And so when these con men destroy tens of billions of dollars overnight and cause panic in the industry, it will affect the real economy. And right now it doesn't seem to. And like, yeah, I guess that's not a bad point. Maybe we just let it die on its own. I don't know. It seems like there's more. We'll know more. Yeah. So yeah,

we will continue to learn more. One of the things that's funniest about this is that Sequoia, this investment firm, put like 200 million dollars into the company, which they have all written off now. They're accepting it as a total loss. There's massive investment. They're going full back girl on this. Okay. Now, when you hear this very serious investment firm put 200 million dollars into this business, you probably assume, Jamie, wow, I bet he had a good pitch, right? I actually, I don't know. If we're talking Pheronos, I actually don't think that that is that's not disqualifying to have a dog shit pitch. You know, you know who can make this clear for us is Captain Dick Ryder. Oh, thanks. SPF told Sequoia about the so called super app. I want FTX to be a place

where you can do anything you want with your next dollar. You can buy Bitcoin. You can send money and whatever currency to any friend anywhere in the world. You can buy a banana. You can do anything with you. You want with your money from inside FTX. Suddenly, the chat window. It's so silly. How much could a banana cost? I don't know. I feel like I can do anything I want with my debit card. Like I've never run into a thing I wanted to buy and been like, ah, I cannot. No, how do I? I can even buy drugs with it by going to an ATM. If I were to be a person who buys drugs, which I'm not, I could go to an ATM and take out cash and purchase your local drug dealer and banana vendor for crying out loud. Unbelievable. So she gives this banana pitch, quote, suddenly the

chat window on Sequoia's side of the zoom lights up with partners freaking out. I love this founder typed one partner. I am a 10 out of 10 pinged another. Yes, exclamation point exclamation point exclamation point exclaimed a third. What Sequoia was reacting to was the scale of SPF's vision. It wasn't a story about how we might use fintech in the future or crypto crypto or a new kind of bank. It was a vision about the future of money itself with a total addressable market of every person on the entire planet. I sit 10 feet from him and I know it's these people are just I imagine like three executives doing lines of coke and one swallowing a banana with the peel still on. They're like, yes. Yep. Oh my God. Okay. Yeah. So it's, I mean, which does kind of

continue with the trend of like, you know, as SPF has never had a problem or a like anything to overcome. Like if it's this easy for him to con people into shit, like, of course, you would have a God complex. You've never, you've never been told no. Yep. Yep. Yep. Yep. Yep. Yep. It's cool. So what Sequoia was react. Yeah. Sorry. I have to continue this, this fucking quote. And next he's going to talk about a person who works at Sequoia and is in the room for this. I sit 10 feet from him and I walked over thinking, oh, shit, that was really good. remembers Aurora. And it turns out that fucker was playing League of Legends through the entire meeting. And this is framed in the article and in all the coverage before everything fell apart

is like so awesome. He's so cool. This writer talks a bunch about how like Sam never stops playing video games. When he's talking to this writer, when he's having corporate meetings, he's playing video games basically 100% of the time. And this is always mentioned as like, he's always working. He's always in the office. He sleeps in a beanbag, chariot is desk. And it's like, no, dude, he's not always working. He's conning you and he plays video games all the time and pretends that that's a fucking job, which is great. Great con. Good for you buddy. Always working and always there. Two very different flavors of things happening. Exactly. Yeah. It's all part of the fucking con. So is the fact that he always, he always wore like

ratty old athletic shorts and like a wrinkled t-shirt. Because like that's for if you are a young man in the tech industry, that makes people think you're a genius, right? Because genius is dressed like shit. Yeah. Do you think he's like, now if I bring a real stink into the room, people are going to like jack up my already fake IQ score about 20 points. Yeah, this is fucking more shit. And it's like, you know who else dresses like shit? The guy I used to buy weed from. Yeah. Yeah. You know who also, you know who wears the same outfit as Sam Bankman freed? My old buddy who once at a party got into an argument with a guy and broke 15 bones in his face because they were both drinking. Not a corporate genius. I do like that shared aesthetic where it's like

really the difference is the pet snake. That is, that's the, that's, that's how you truly can sniff out the millionaires from the app. Yeah. So anyway, he's based, he's the same kind of person as Elizabeth Holmes. And he was, again, he's a confidence man. And this gets us into the Larry David shit because the thing about being a confidence man is that as long as people are convinced there's money, their money is safe and most of them don't try to pull it out, then you can keep the con going and you can keep the fake numbers increasing and you, everyone will think you're richer and you can actually get real money out of this. So one of the things that he did is he would pour shitloads of money into sponsorship deals and

to other ventures to make his company seem legit. One way he did this, yeah, he spent 17.5 million through FTX to sponsor the athletic teams at UC Berkeley. He launched a $20 million ad campaign with Tom Brady and Giselle Bunchin. He offered NFTs at Coachella and he spent $135 million on the naming rights for the Miami Heats home arena. And the purpose, this is all to build confidence, right? You see, you see it's the, the fuck it's the same thing crypto.com did by the way with the arena and y'all. I just wanted to say, I was like, I, I feel like the crypto.com arena is not long for this world. And we don't, we don't, we don't recognize that as an act. Is my money safe in this thing that's a bank, but not a bank? Well, their name is on the arena. So it's probably

legit. Here's the thing is like, yeah, I was like, now walking into the crypto.com arena, I couldn't feel less safe. I couldn't feel less secure. Nobody, unlike when it was the Staple Center, I'm like, Oh, you know, it's never going to go out of style. Little notebooks. People have been using staples since we were cavemen, I assume. So yes, technology. Just like the worst fucking name on earth. It's, it's, it infuriates me. These people. So if you have a dog in the fight, I do. In his interview with Vox, Sam basically admits this, albeit in a slightly careful way. Journalist. So FTX technically wasn't gambling with their money. FTX had just loaned their money

to Alameda who hadn't gambled, who had gambled with their money and lost it. And you didn't realize it was a big deal because you didn't realize how much money it was. Sam responds. And also I thought Alameda had enough collateral to reasonably cover it. Journalist says, I get how you could have gotten away with it, but I guess that seems sketchy even if you get away with it. Sam, it was never the intention. Sometimes life creeps up on you. He literally said life comes at you fast. Life comes at you fast. So Sam's net worth tops that at around $22 billion on paper. In reality, neither Alameda nor FTX had ever taken an even close to that much money. The valuation was based entirely on

nonsense calculations that were themselves based on lies from FTX's extremely cooked books. There's a lot more about this than we're getting into. People are still finding this all out. There is one thing I should probably read, which is so, you know, when his company collapsed, he had to step down from running it, right? And because a lot of money is still in there and a lot of investments are still tied up in that, they put a guy in charge of the company again, right? And there's specific dudes in the business world whose job is to come in when a company fucks up like this and try and get as much money back out through the shareholders as possible to minimize the bleeding. So they kind of have how they had in old Hollywood,

they have like a fixer guy. Yeah, yeah, yeah. This is this fixer guy specifically, he is the guy that they brought in when Enron, he took over Enron after it fell apart in order to try and like minimize the damage from it. So he is the guy who got brought in to deal with like the fact that this massive fucking crime happened with Enron. One sec. My favorite, my favorite Enron memory, not that you asked, Rude, was the women of Enron Playboy spread that I got to archive during my time there. Boy, did those Enron girl bosses have their, second only to women of 711, which is my actual favorite spread. Continue. So first off, you know, this company has about a million creditors. So about a million people

possibly lost their entire investment in this company, which is a stunning amount of people to take money from. And again, we are probably looking at like $5 or $10 billion stolen, something like that. It's kind of unclear the exact amount. But anyway, this is what the guy in the Delaware bankruptcy court filing, this is what the guy who was the guy who took over Enron after it became clear that the whole company was a criminal enterprise. This is what that guy wrote about Sam's company. Oh, no. Okay. Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here from compromised systems integrity and faulty regulatory oversight

abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. This situation is unprecedented. Again, that's the guy who took over Enron. I was like, that is literally like Bill Clinton dropping a notes post being like, never have I seen a more cheated on my wife. Well, I will say it's different. This guy did not commit any of the Enron crimes, right? This is the guy who comes in. He saw them all. No, no, no, no. This guy is after he's brought in the it becomes clear that the guy starting a sentence with never in my career. This guy. Yeah. It's probably best to look at this guy as like an EMT when it becomes clear that a company that has a

shitload of money in it and is central in the economy has collapsed because people broke the law. He comes in to minimize the damage, but he was not working at Enron previously, right? He's not trying to like stop anyone from getting in trouble. He's trying to minimize how many people are hurt by this. Yeah, anyway, of course. Yeah. I just want to make clear like that guy's anyway, whatever. Yeah, he's not. He's not the Enroner. He is not the Enroner. He did not make Enron bad. He's just was there afterwards and was like, this company's even worse. He bought the issue of Playboy and then he took to pushing. Yeah. So I should God, there's yeah, we're getting close to done. I should note that before everything collapsed, Sam again, he's in the effect of

altruism. He's he's he promised to donate like a couple of hundred million dollars to these EA causes. A lot less than that actually wound that got out. Some of them were good, but a lot of it was like so he made a huge point that he was like his one of his major priorities was pandemic prevention, right? We have to stop the next pandemic. I'm going to put as much money as I can to pandemic prevention. That's the best effective altruist thing that I can do. To talk about how well that actually worked, I want to quote from the Washington Post here. FTX backed projects ranged from a $12 million to champion a California ballot initiative to strengthen public health programs and detect emerging virus threats amid lackluster support.

The measure was punted to 2024 to investing more than 11 million on the unsuccessful congressional primary campaign of an Oregon biosecurity expert and even $150,000 grant to help Monclef Slau, the scientific advisor to the Trump administration's Operation Warp Speed vaccine accelerator, write his memoir. So that sounds like a giant waste of money, right? That sounds like even if it was like good, it sounds like it didn't account like even if the goals were good, like well, the ballot measure failed, like it already got punted. So it's not like it worked. And it gets worse because SBF's fund also put a lot of money like $5 million into ProPublica. In ProPublica, they've done a lot of cool stuff. They also recently published an extremely flawed

investigation that backed the lab leak hypothesis. I mean, the LA Times and their analysis of this deeply flawed piece of reporting. And also, you know, we've got some notes for the LA Times as well. Yes, nobody's perfect. The LA Times called it a train wreck, noting the article is based heavily on Chinese language documents that appear to have been mistranslated and misinterpreted according to Chinese language experts who have piled on via social media since its publication. It also takes as gospel or a report by a rump group of Republican congressional staff members asserting that the pandemic was more likely than not the result of a research related incident. And this has been the fact that ProPublica published this has like provided a shitload of fuel to the

it was all a fucking lab leak from China. It's China's fault. Republican shit. Yeah, Sam Bankman Fried funded that shit. Oh my God. Yeah, basically, none of the shit he was putting money into that was supposed to be good really worked. And a lot of it was. Yeah. So the another thing the right is doing right now is they're talking about he was like the number one or number two donor to Democrats during the midterm elections right behind Seth MacFarlane. Yeah. Yeah. But none of his donations worked. And also he gave it was like 32 million he gave to the Dems. He gave like 24 million to the Republicans. And the reason he was giving this money in number one, there were some like pro pandemic response candidates he wanted to back, most of whom didn't

you know, do well. But also like a lot of the money was towards Republican and Democratic candidates who were going to be part of the regulation of the crypto industry because he wanted to have a seat at the table and push regulations in a way that. Okay. Yeah. That would enable that is. Yeah, exactly. So anyway, in general, nothing at Alameda or FTX was as it seemed in that Dick writing Sequoia article, Carolyn Ellison, the CEO of Alameda is he talks about her a bit and like she frames her as like this quintessential innocent nerd girl, plucky and ethical and optimistic to show like these are the kind of, you know, smart young Gen Z kids that are, you know, building this, this great company and like

she showed up in LARP gear to meet with Sam and talk about the future of their great financial enterprise and she's an ethical altruist. Since everything fell apart, it's come out that she and Sam were dating each other and possibly other members of the company. And also people have found her. Now we have the full Liz Holmes look has been completed. Here we go. People have found her Tumblr. And boy, is she sketchy as hell. I'm going to quote from a report on her Tumblr activity in decrypt.com. Boy, howdy. When I first started my first foray into Poly, I thought of it as a radical break from my trad past the account wrote in February 2020. But TBH, I've come to decide that the only acceptable style of poly is it best characterized as something like Imperial

Chinese harem. The account went on to detail how a polyamorous dynamic should ideally function as a cutthroat market of sexual competition and subjugation. None of this non non hierarchical bullshit, the account elaborated. Everyone should have a ranking of their partners. People should know where they fall in the ranking and there should be vicious power struggles for the ranks. It gets worse, Jamie. The Ellison linked account also demonstrated a substantial preoccupation with HBD or human biodiversity, an online euphemism for the discredited fields of race science and eugenics popularized by the old right. Oh boy, give me one more paragraph and then we can talk about this, Jamie. Ellison has for years vocalized her diehard obsession

with Harry Potter. In one post, her affiliated Tumblr account tied her love of online character quizzes to her penchant for sorting Indians by their caste, which she presumed to indicate genetic distinction. Oh my god. Holy shit. Even J.K. Rowling wasn't thinking something that fucked up and that's really saying something. Someone needs to tell this. Amazing. Astonishing. Tumblr is exclusively for Sherlock fan fiction and things that trigger my eating disorder. That's it. I cannot fuck like, oh, that's so dark. I almost can't fathom it, right? And again, there's so much we probably will do a follow up at some point because the fact that it was this easy for some fucking crypto rag, they're the only ones who reported on it, to find her Tumblr

where she talks about race science makes me think these guys were all probably into a lot more fucked up shit than they let on. Yeah. So we'll see. We'll see. We don't have the hour for me to decompress the way I need to after hearing that sentence specifically. Yeah, I need a cigarette. I'm going to start smoking today and I hope she's fucking happy. Oh my god. That is that is so funny. What a brutal place to land. It's so fucking nothing, Robert. Jesus. Anyway, hopefully they're all all of their money's gone, but they probably squirreled away millions and stuff for themselves. Although I at least one of the articles I've read says that like his net worth is effectively zero now, but I don't think anyone actually knows what his net worth is right now. Like and how much he

got like his company went from valued at thirty two billion dollars to most recently, there's something like six hundred and fifty thousand dollars in actual assets left. But I also kind of think he and the others probably have millions or tens of millions that they set aside in shady ways for themselves. Yeah, I mean, well, that does sound like what the beanie babies guy would do. And that is my yardstick for morality. That is so that that is very, very scary to to consider. I feel like guys like that the thing that is I mean, I don't know, whenever you hear about like it is so karmically satisfying to know that someone like SBF can can be completely bottomed out and like destroyed by something like this. But the thing is like when when rich guys like that lose

everything, they just come up with worse, more hateful ideas and then come back. And that is like always what kind of scares me about that. Yeah, it is so funny. I don't know, Jamie. I don't know what the solution is. That's not like I want them to have money again. I just, you know, you know, what how can you make someone say less? Again, I think the podcast is dilemma. Look, here's here's where I'll land on this. You know, I don't think I don't think people should be thrown into cages generally unless there's literally no other way to stop them from harming folks. So and I don't think that's the case with these people. So instead, I think the actual solution is to close from the outside all of the doors to that the the

fucking rich person apartment complex they occupy in that Bahamas development, lock it from the outside and once a week drop in food and necessities via a helicopter and never let them leave or use the internet again. Yeah, them all just be with their friends and they're in their weird little compound going increasingly insane with their Chinese harem shit. I don't know, I guess that's another kind of prison. But if we film it, we can make money. But then SBF might may have to face his worst fear, which is reading a book. Yeah, I guess like like my serious answer is what do you do to people like this is you stop them from ever being able to have access to money again or start companies again. And hopefully eventually they find something to do that actually helps

human beings and is like it like of any kind of use like working in a grocery store. There's that's a real benefit. People need to get food and people need like that's a respectable, honest way to make a living. And if any of these people were to get a job working in a safe way, they would be providing an infinitely greater benefit to the human race than they could ever have performed perhaps a bit more of that that ethical side of the ethical altruism you're looking for. Yes, I'll be honest. I did not come to the recording today with a solution for the prison industrial complex. I don't have it. I still don't like it. I still don't love it. Yeah. Yeah, I have no solution. But you know what I do have, Jamie?

What? Your plugables. No, you don't. I have those. Well, you have them, but I'm letting you have them. Oh my God. I mean, I could probably do them if nobody wants to take this job. I'll do it. I can I'll do them. Sophie, do you want to do them? Yeah, I mean, you can preorder Jamie's book. And that is linked in her Instagram bio. That's true. You can follow her on Instagram at Jamie Christ Superstar. And you can follow her on Twitter at JamieLoftisHelp if Twitter's still around. She has a podcast that she co-hosts with Katelyn Derade called The Backdale Cast. You should listen to her many limited run series, including her most recent run, which is Ghost Church. Which Sophie produced along with The

Backdale Cast and everything, every podcast on the planet. This has now become a plug for me. Did I get everything, Jamie? Yeah, that's exactly what I would have said, except worse. Yeah, so pre-order Raw Dog. Yeah. Thanks, Sophie. Yeah, pre-order Raw Dog. If you listen to the Hot Dog episode of Bastards and Didn't Like It, you did like it. Now, buy the book. Yeah. Legally, you did like it. And if you disagree with that statement, we will send the CIA to kill your family. Yeah. And let's make sure to attribute that quote to Robert Evans specifically. There we go. And speaking of Robert Evans specifically, Robert Evans specifically, Margaret Kiljoy specifically, and myself will be doing a Behind the Bastards virtual

livestream show on December 8th. You can get tickets at moment.co. slash btb. Yeah. Also, I have a sub-stack now because Twitter's not doing great, so. That makes me so sad. Why? I like writing things. I got to write a thing last night. That's so beautiful. Sophie, don't you want me to write more things? I subscribe. It's better for me than being on Twitter all the goddamn time. Yeah, you can find it at shatterzone.substack.com. Go there and I will be writing. I'll try to write something every week. Maybe I won't. Maybe all of this will fall apart, be lost in time, like tears in the rain. Or maybe you'll get a new thing for me every week. There's no way to know.

Every time, half the time when I get something from someone's sub-stack, because I subscribe to quite a few, but every time I get a message from someone's sub-stack, it's always like, I'm so sorry. I'm like, I didn't notice. Just give me the content and I'll see what it's about. Yeah. Yeah. It's fine. Look, we all, I don't know. I've been meaning to write more stuff as opposed to just tweeting shitposts. So maybe it'll happen. Maybe it won't. There's no way to know. Perfect. Bye. Behind the Bastards is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com. Or check us out on the iHeart Radio App,

Apple Podcasts, or wherever you get your podcasts. What would you do if a secret cabal of the most powerful folks in the United States told you, hey, let's start a coup? Back in the 1930s, a marine named Smedley Butler was all that stood between the U.S. and fascism. I'm Ben Bullitt. I'm Alex French. And I'm Smedley Butler. Join us for this sordid tale of ambition, treason, and what happens when evil tycoons have too much time on their hands. Listen to Let's Start a Coup on the iHeart Radio App, Apple Podcast, or wherever you find your favorite shows. Did you know Lance Bass is a Russian trained astronaut that he went through training in a secret facility outside Moscow, hoping to become the youngest person

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