In the draft,SBF traces his rise from his childhood in Palo Alto to the penthouse he bought in the Bahamas nearFTX headquarters. But he denies misusing the funds, arguing that if Alameda had hedged, it would have remained solvent and avoided the whole unfortunate story.
Source: David Yaffe-Bellany, The New York Times
Translation: Joy, PANews
Sam Bankman-Fried , the founder of failed cryptocurrency exchange FTX, offered a blunt assessment of his predicament at the end of his never-published 15,000-word Twitter thread. “I’m broke, wear an ankle monitor, and am one of the most hated people in the world,” he wrote. “I will probably never be able to do anything to make a positive impact in my life again.”
He added: “The fact is, I did what I thought was right.”
SBF was charged with fraud in connection with the collapse of FTX and was arrested in December 2022 and subsequently released on bail and placed under house arrest. He has since written hundreds of pages of sometimes rambling self-justifications, covering everything from childhood memories to mathematical calculations.
In his unsent draft of the post, formatted as a series of tweets, about 70 typed pages, he criticized some of his closest colleagues and interspersed his arguments with photos of his high school years and images of popcorn and garden mazes. Every few pages, key moments in the narrative were accompanied by links to music videos by Alicia Keys, Katy Perry or Rihanna.
SBF, 31, once a prolific poster on Twitter, labeled the post “a draft of a draft of an idea” and included links to 29 other FTX documents. One document, called “Inception V2,” is a lengthy attack on the company’s bankruptcy lawyers and contains screenshots from the 2010 Christopher Nolan film. A separate link opens a spreadsheet listing SBF’s Amazon orders from 2021.
The roughly 250 pages of documents, which have never been reported before, offer a window into SBF's mindset during the eight months he spent in home detention after a judge revoked his bail in August. They also provide new details about his possible legal defense, beyond what his lawyers revealed in court, and reveal how he will justify his actions at his trial, which is set to begin on October 3.
Prosecutors allege SBF masterminded a scheme to transfer FTX customer funds to Alameda Research, a hedge fund he founded, so that his firm could make venture capital investments, buy real estate and donate to politicians. He has previously pleaded not guilty, as he faces decades in prison if convicted.
While under house arrest, SBF sent the documents to Tiffany Fong, a social media influencer with a YouTube channel about the crypto industry. Fong shared the contents with The New York Times.
“He liked that I didn’t work for anybody,” she said. “He thought I could come to my own conclusions.”
A representative for SBF declined to comment.
In several filings, SBF accused his ex-girlfriend and one-time lieutenant Caroline Ellison of contributing to FTX's collapse. He called her incompetent for the job he gave her as head of Alameda, claiming she cried during a meeting with him and refused to develop a trading strategy that could have protected his business from the market crash.
“She continually avoided conversations about risk management — sidestepping my advice — until it was too late,” he wrote in a document titled “Alameda’s Hedge Failure.” “Every time I offered advice, it only made her feel worse. I’m sure being an ex didn’t help.”
In the draft Twitter post, SBF also criticized Alameda co-CEO Sam Trabucco. The document said Trabucco and Ellison did not get along well. While Trabucco had good instincts for risk management, he was "in the process of quietly exiting" by the end of 2021.
SBF wrote that Trabucco preferred to "date a ton of guys while sailing around the world." He then linked to Rihanna's music video "Cheers (Drink to That)."
Ellison and two other SBF executives have pleaded guilty to fraud charges and agreed to testify against him. A fourth person pleaded guilty this month but has not pledged to cooperate in court. Trabucco has not been accused of any wrongdoing.
Lawyers for Trabucco and Ellison declined to comment.
FTX, once hailed as a trusted force in the unregulated world of cryptocurrency, collapsed last November, costing users billions of dollars and devastating the industry. After his arrest, SBF was released on bail and allowed to live with his parents, a longtime Stanford University law professor, at their home in Palo Alto, California. They have a German shepherd named Sandor as his watchdog.
Over the months, SBF has hosted guests such as author Michael Lewis, who is finishing a book about him, and several journalists.
Few people have as much access as KOL Fong, who developed a rapport with SBF online before FTX failed. Fong said she visited SBF more than a dozen times at his parents’ home and recorded her conversations with him, which she may eventually publish.
Fong said that while under house arrest, SBF spent most of his time in his study, where he played computer games, set up a chess board and sometimes slept on the couch. She said that most of the time, he was writing legal defenses and recording his thoughts on the case in hundreds of pages of Google Docs. SBF also told her that his family was installing a pickleball court for him in the yard.
SBF gave the documents to Fong in late January. It’s unclear what he wanted her to do with them. Fong, who suffered losses in the collapse of cryptocurrency firm Celsius Network, said she sympathized with FTX’s victims and was skeptical of many of SBF’s claims. She sent a copy of the document to Aditya Baradwaj, a former Alameda engineer, who offered a point-by-point rebuttal to Mr. SBF, noting that Alameda’s hedge would be “irrelevant” if FTX hadn’t misused customer funds.
In a draft Twitter post, SBF traced his entrepreneurial journey from his childhood in Palo Alto to the penthouse he bought in the Bahamas near FTX headquarters. He recalled meeting Trabucco at math camp, when he and future colleagues snuck out after curfew to bake cheesecake brownies, and he described his early admiration for Ellison, calling her "very smart." He also inserted some personal photos, including one showing him holding a T-shirt that Trabucco bought him in high school.
In another section, SBF posted a link to a document he wrote in 2019, “Tonight We Are Young,” a report on his interaction with Binance founder CZ, aka CZ, at a conference in Taiwan. (He also added a link to Fun’s “We Are Young” music video.)
“Tonight was a night of booze, women, lasers and loud, pounding music, but there was a strange microclimate that seemed to stay with me,” SBF wrote. “I walked past CZ a few more times, and each time he took his eyes off everything else and hugged me: people all thought a lot about us.”
CZ’s post triggered a withdrawal run that crashed FTX in November. Binance representatives did not respond to requests for comment.
Some of SBF’s filings detail arguments his lawyers made in court. In documents titled “Inception V2,” “Inception V3,” and “Inception Evidence,” SBF claims that Sullivan & Cromwell, the law firm overseeing FTX’s bankruptcy, fabricated claims that he misappropriated user funds.
“They played it extremely well,” he wrote. “If it didn’t destroy everything I care about in life, I’d tip my hat to them.”
A spokesman for Sullivan & Cromwell declined to comment. Prosecutors argued that SBF's claims about the company amounted to "innuendo."
In several documents, SBF also dissected his history with Ellison, writing that their relationship ended "like most of my relationships ended."
“They wanted more intimacy, commitment, and public visibility than I wanted,” he wrote in the post, “and I felt claustrophobic.”
In another filing, he said that despite his urgings, Ellison refused to hedge against Alameda’s aggressive trading strategy. On one occasion, he recalled, he sent her a message that amounted to “the meanest thing I’ve ever said to her.” (He said he no longer had a record of the message.)
“Had Alameda hedged, it would have remained solvent and avoided this whole unfortunate story,” he wrote.
SBF wrote in a Twitter draft that his concerns about Alameda intensified in the spring of 2022 when he packed his bags and headed to Washington. A group of employees, including Ellison, were frantically discussing the potential deficit in the company's accounts. SBF wrote that he was only halfway there, but he heard enough to realize that the conversation focused on an account marked "fiat@" - an account that regulators say FTX executives used to transfer customer funds to other projects.
“I’d heard the name before, but I never knew exactly what it was,” he wrote.
Ellison pleaded guilty and said she and SBF conspired to use clients’ money to prop up Alameda’s finances. He denied misusing the funds.
“In general, I don’t lie,” he wrote in a document titled “The Truth.” “This is something I believe very strongly.”
