Nov 15 • 54M

SBF in Shambles (w/Teddy Schleifer)

On Dead Cat, we talk with our favorite Puck reporter about FTX's implosion

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Eric Newcomer
Tom Dotan
A podcast about Silicon Valley, hosted by newsletter writer Eric Newcomer and Tom Dotan, with Katie Benner as a regular special guest.
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Sam Bankman-Fried (Photo by Alex Wong/Getty Images)

On the latest episode of Dead Cat, we examine how effective altruism’s crypto benefactor took the world — and the media and the Democratic Party, in particular — for a ride.

Sam Bankman-Fried escaped much of the skepticism that rival exchange Binance has faced — yet it’s SBF’s FTX that has filed for bankruptcy.

With the help of Puck reporter Teddy Schleifer, Dead Cat co-hosts Tom Dotan and I try to make sense of what exactly happened and explain the saga to the non-cryptographically inclined.

Schleifer tells us what the midterm elections will mean for tech and Peter Thiel. Dotan confesses his deficiencies as a political forecaster.

On this week’s episode of the podcast, I’m pretty open that I think the media had a blindspot for Bankman-Fried because of his effective altruism, pedigree, crypto skepticism, and Democratic politics. Yesterday, Stratechery quoted my tweets declaring as much. I assume my tweets caught the newsletter’s attention because I was willing to say something that most reporters won’t really admit publicly.

I agree with the subtext of Marc Andreessen’s latest tweets. Bankman-Fried’s performative virtue now appears to have been an obvious cover for his private transgressions. And the left was more susceptible to Bankman-Fried because it shares many of his professed values.

But I tweeted last Tuesday and recorded the podcast on Friday — and already the narrative is moving so fast. Republicans are clearly starting to spin up the Bankman-Fried criticism as an anti-Democratic talking point.

I think it’s ridiculous to expect that the federal government should have suspected anything in particular was amiss at FTX relative to the other exchanges, when the company’s own investors didn’t seem to know anything was going on. Yes, I think that the Securities and Exchange Commission should have been more aggressive about regulating crypto broadly and not just waited for things to come undone on their own. But I don’t think Republicans were exactly cheering them on there.

And while the media could have been more skeptical, you can’t expect reporters to ferret out every scandal (though CoinDesk certainly played a role in bringing FTX down). Ultimately, the company and major shareholders are responsible for the company’s behavior.

So while I think that the mainstream media would have been more skeptical of Bankman-Fried if not for his persona and politics, I don’t think it was a corrupt or conscious act. Here’s a case where the left is guilty of the sort of implicit bias that it’s always talking about.

It’s too easy to overlook someone’s shortcomings when he wraps himself in the very things that you believe in.

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