1 00:00:15,316 --> 00:00:20,716 Speaker 1: Pushkin. Hey there, it's Michael Lewis. Before we get to 2 00:00:20,756 --> 00:00:22,636 Speaker 1: this episode, I want to let you know that you 3 00:00:22,636 --> 00:00:25,916 Speaker 1: can listen to each episode of Judging Sam The Trial 4 00:00:25,956 --> 00:00:29,476 Speaker 1: of Sam Bankman Freed ad free by becoming a Pushkin 5 00:00:29,556 --> 00:00:33,516 Speaker 1: Plus subscriber, and with your subscription you'll also get exclusive 6 00:00:33,516 --> 00:00:37,356 Speaker 1: access to ad free and early bingeable podcasts like Paul 7 00:00:37,436 --> 00:00:42,236 Speaker 1: McCartney's new podcast, McCartney A Life and Lyrics, Malcolm Gladwell's 8 00:00:42,236 --> 00:00:46,716 Speaker 1: revisionist history, The Happiness Lab from Doctor Lorie Santos, and 9 00:00:46,836 --> 00:00:49,956 Speaker 1: tons of other top shows from Pushkin. Sign up an 10 00:00:49,996 --> 00:00:55,596 Speaker 1: Apple Podcasts or at Pushkin, dot fm, Slash Plus. Welcome 11 00:00:55,636 --> 00:00:58,796 Speaker 1: to Judging Sam The Trial of Sam Bankman Freed. I'm 12 00:00:58,836 --> 00:01:02,676 Speaker 1: Michael Lewis, and we're recording this on October seventeenth today 13 00:01:02,716 --> 00:01:06,276 Speaker 1: on the show Matt Levine. Matt's a business columnist at 14 00:01:06,276 --> 00:01:10,116 Speaker 1: Bloomberg News, where he writes the terrific newsletter Money Stuff. 15 00:01:11,276 --> 00:01:14,516 Speaker 1: He's covered SPF and FTX closely, and he knows more 16 00:01:14,556 --> 00:01:17,236 Speaker 1: about how crypto markets work than just about anybody else. 17 00:01:17,876 --> 00:01:19,596 Speaker 1: I wanted to talk to him about a lot of things, 18 00:01:19,596 --> 00:01:23,076 Speaker 1: among them how his early conversations with Sam might have 19 00:01:23,196 --> 00:01:26,916 Speaker 1: foreshadowed the FTX collapsed and where are the eight billion 20 00:01:26,996 --> 00:01:30,236 Speaker 1: dollars this whole trial is about actually went And I 21 00:01:30,276 --> 00:01:32,276 Speaker 1: also wanted to talk to him about how is reading 22 00:01:32,276 --> 00:01:34,396 Speaker 1: of the portrait I painted of Sam in my book 23 00:01:34,516 --> 00:01:39,556 Speaker 1: has changed now that Sam's on trial. I have a 24 00:01:39,636 --> 00:01:41,516 Speaker 1: question to you. I don't want to forget you were 25 00:01:41,556 --> 00:01:44,476 Speaker 1: bewildered by the response to the book, like it was 26 00:01:44,516 --> 00:01:47,556 Speaker 1: just weird the initial response to the book. Am I 27 00:01:47,596 --> 00:01:48,356 Speaker 1: misquoting you? 28 00:01:48,396 --> 00:01:49,876 Speaker 2: I don't know, Like the days lying after the trial, 29 00:01:49,876 --> 00:01:51,956 Speaker 2: I think there was like a desire for people to 30 00:01:51,996 --> 00:01:55,836 Speaker 2: either be pro or anti SPF. And to be clear, 31 00:01:56,676 --> 00:01:58,836 Speaker 2: everyone in the world except for like his parents, is 32 00:01:58,836 --> 00:02:01,116 Speaker 2: anti SPF, and so it was sort of convenient for 33 00:02:01,156 --> 00:02:03,836 Speaker 2: you to be the pro SPF guy, even if he 34 00:02:03,956 --> 00:02:06,116 Speaker 2: were being like, yeah, I think this guy's innocently like, 35 00:02:06,356 --> 00:02:09,436 Speaker 2: is not that necessary to get mad at that, Like 36 00:02:09,636 --> 00:02:13,596 Speaker 2: it's okay, everyone thinks he guilty, but people were about it. 37 00:02:13,676 --> 00:02:16,276 Speaker 2: You for like kind of defending him. 38 00:02:16,596 --> 00:02:18,676 Speaker 1: But you said something interesting to me when I sent 39 00:02:18,716 --> 00:02:20,756 Speaker 1: you this note asking you to come on. You said 40 00:02:20,956 --> 00:02:24,996 Speaker 1: that when you finished the book, just on the basis 41 00:02:25,036 --> 00:02:28,756 Speaker 1: of the facts in the book, you thought, I don't 42 00:02:28,756 --> 00:02:31,276 Speaker 1: want to put words in your mouth, but it actually 43 00:02:31,316 --> 00:02:33,996 Speaker 1: sort of like convinced you even more of his guilt, 44 00:02:34,516 --> 00:02:37,596 Speaker 1: maybe slightly changed the way you felt about what he'd done. 45 00:02:38,476 --> 00:02:40,316 Speaker 2: I feel like there have been two narratives of this, 46 00:02:40,556 --> 00:02:45,716 Speaker 2: which are one his narrative, which is, I like made 47 00:02:45,756 --> 00:02:49,436 Speaker 2: a series of understandable mistakes and lost all that money, 48 00:02:49,796 --> 00:02:52,396 Speaker 2: and then everyone else's narrative, which is he's an evil 49 00:02:52,436 --> 00:02:55,836 Speaker 2: genius who stole all this money to spend on political 50 00:02:55,836 --> 00:02:59,876 Speaker 2: donations and Bahama's real estate and like, you know, cackled 51 00:02:59,876 --> 00:03:02,476 Speaker 2: gleefully as he stole the money. And neither of those 52 00:03:02,516 --> 00:03:05,156 Speaker 2: is that compelling. And like between those two his like, ah, 53 00:03:05,196 --> 00:03:08,396 Speaker 2: I'm just an innocent guy, you know, had had some legs. 54 00:03:08,556 --> 00:03:11,396 Speaker 2: But I think that like what came clear came clear 55 00:03:11,396 --> 00:03:12,956 Speaker 2: to me in the book, and like the somethings that 56 00:03:12,996 --> 00:03:14,796 Speaker 2: I should have known this already. He's sort of a 57 00:03:14,836 --> 00:03:19,116 Speaker 2: classic scammer figure in the sense of, like the core 58 00:03:19,196 --> 00:03:24,436 Speaker 2: thing he did was take ridiculous risks with his investors, 59 00:03:24,436 --> 00:03:30,796 Speaker 2: with his customers money while saying and probably believing himself 60 00:03:31,076 --> 00:03:33,916 Speaker 2: that he wasn't right. Like part of the problem is 61 00:03:33,916 --> 00:03:35,636 Speaker 2: that the guy loves taking risks, but part of the 62 00:03:35,636 --> 00:03:37,236 Speaker 2: problem is that like he can sort of like sit 63 00:03:37,236 --> 00:03:38,916 Speaker 2: down and look at you in the eye and say, oh, no, 64 00:03:38,996 --> 00:03:41,116 Speaker 2: I'm not taking risk. This was all totally safe and 65 00:03:41,156 --> 00:03:43,436 Speaker 2: like kind of believe it himself. And I think that's 66 00:03:43,476 --> 00:03:45,396 Speaker 2: like the what I got from the book is like 67 00:03:45,436 --> 00:03:46,916 Speaker 2: a real portrait of a guy who is like that, 68 00:03:46,996 --> 00:03:49,436 Speaker 2: who is a wild risk taker who sort of doesn't 69 00:03:49,476 --> 00:03:51,716 Speaker 2: perceive it that way. And like that's like a really 70 00:03:51,716 --> 00:03:54,556 Speaker 2: classic profile of someone doing a financial fraud, right, Like 71 00:03:54,596 --> 00:03:56,876 Speaker 2: that's that's kind of how everyone does it. And so 72 00:03:57,916 --> 00:04:00,196 Speaker 2: to me, reading the book like like sort of made 73 00:04:00,196 --> 00:04:02,156 Speaker 2: sense of what happened in a way that is like 74 00:04:02,236 --> 00:04:04,796 Speaker 2: less bad than like the worst story people tell about 75 00:04:04,796 --> 00:04:06,956 Speaker 2: Sam bekmunfreed, but also in a way that is like 76 00:04:07,196 --> 00:04:10,116 Speaker 2: fully sufficient to convict him of fraud, like and like 77 00:04:10,276 --> 00:04:12,236 Speaker 2: and is in fact the normal way forra it happens. 78 00:04:12,636 --> 00:04:14,876 Speaker 1: What was the emotional takeaway when you when you look 79 00:04:14,916 --> 00:04:16,716 Speaker 1: at what's happening now and you look at the likely 80 00:04:16,756 --> 00:04:18,356 Speaker 1: that he's going to go to jail for forty years 81 00:04:18,436 --> 00:04:21,396 Speaker 1: or whatever, how do you feel about it? 82 00:04:21,596 --> 00:04:24,116 Speaker 2: Look, I feel bad for everyone to whom bad things happen, 83 00:04:24,156 --> 00:04:27,196 Speaker 2: which includes you know, the people who lost money on 84 00:04:27,276 --> 00:04:28,916 Speaker 2: ft X and also him and his parents. You know, 85 00:04:28,956 --> 00:04:31,036 Speaker 2: like I think that, don't you know, it's it's sad 86 00:04:31,076 --> 00:04:33,556 Speaker 2: for anyone to go to prison. But that said, I 87 00:04:33,556 --> 00:04:35,596 Speaker 2: mean like it did like make like a little bit 88 00:04:35,676 --> 00:04:37,356 Speaker 2: make me a share in like the outrage that people 89 00:04:37,396 --> 00:04:40,076 Speaker 2: have at him, because like, you really can't do that. 90 00:04:40,876 --> 00:04:42,956 Speaker 2: You're not supposed to do that. You know. I've talked 91 00:04:42,956 --> 00:04:45,156 Speaker 2: to him, you know, not like this week, but in 92 00:04:45,436 --> 00:04:48,116 Speaker 2: the past, and I think that he he does like 93 00:04:48,156 --> 00:04:51,876 Speaker 2: really coherently and convincingly present this picture of like, oh no, 94 00:04:51,956 --> 00:04:54,356 Speaker 2: it all made sense. And I think that like having 95 00:04:54,356 --> 00:04:56,436 Speaker 2: the fuller portrait of like what he thought all made 96 00:04:56,476 --> 00:04:58,476 Speaker 2: sense makes me kind of mad and like, you know, 97 00:04:59,556 --> 00:05:03,116 Speaker 2: it didn't make sense. You just were you know, you 98 00:05:03,236 --> 00:05:05,996 Speaker 2: just you had like a blind spot in your mind 99 00:05:06,236 --> 00:05:09,356 Speaker 2: about like the risks you were taking and like and 100 00:05:09,396 --> 00:05:12,316 Speaker 2: like your own sort of status is a charmed person 101 00:05:12,316 --> 00:05:13,796 Speaker 2: who would definitely get all the money back and it 102 00:05:13,836 --> 00:05:15,356 Speaker 2: was no problem. I mean, the story in your book 103 00:05:15,356 --> 00:05:18,676 Speaker 2: that is so damning, I think is the thing about 104 00:05:19,036 --> 00:05:21,756 Speaker 2: the very early days of Alameda where they like, thank 105 00:05:21,836 --> 00:05:24,836 Speaker 2: he just placed some money, and he's like, oh, it's 106 00:05:24,876 --> 00:05:26,516 Speaker 2: like an eighty percent chance we'll get it back. It's 107 00:05:26,516 --> 00:05:27,756 Speaker 2: no problem. We don't have to tell you about it. 108 00:05:27,796 --> 00:05:29,036 Speaker 2: And then like they get it back and he's like, 109 00:05:29,036 --> 00:05:31,316 Speaker 2: ah see, I'm always right, and like that's like that's 110 00:05:31,316 --> 00:05:33,356 Speaker 2: like the worst possible lesson for him to learn, right, 111 00:05:33,516 --> 00:05:36,836 Speaker 2: Like had like had they never gotten the money back, 112 00:05:37,036 --> 00:05:39,356 Speaker 2: and like, had he been fired, that would have been it. 113 00:05:39,396 --> 00:05:40,956 Speaker 2: He would be like, go be a trader at Jane 114 00:05:40,956 --> 00:05:43,076 Speaker 2: Street orriever, right, Like he'd been fine, right, But instead 115 00:05:43,116 --> 00:05:45,636 Speaker 2: he's like, I can never mess up. And then he 116 00:05:45,716 --> 00:05:47,956 Speaker 2: lost like eight billion dollars instead of four million dollars, 117 00:05:48,036 --> 00:05:49,476 Speaker 2: and now he's like gonna go to job forever. 118 00:05:49,956 --> 00:05:52,916 Speaker 1: So I think that's exactly right. When people ask me 119 00:05:52,996 --> 00:05:55,756 Speaker 1: what chapter to if they're going to excerpt a chapter 120 00:05:55,836 --> 00:05:57,436 Speaker 1: or read a chapter, you get a feel I say 121 00:05:57,476 --> 00:06:00,476 Speaker 1: that chapter because that's the foreshadowing of what's going to happen. 122 00:06:00,756 --> 00:06:03,996 Speaker 1: And what also happened in that moment was, you know, 123 00:06:04,036 --> 00:06:06,836 Speaker 1: he had this pool of twenty effective altrus who were 124 00:06:06,876 --> 00:06:08,996 Speaker 1: working with him. Half of them decide he's like a 125 00:06:09,196 --> 00:06:12,596 Speaker 1: criminal or are so catastrophically sloppy that he might as 126 00:06:12,636 --> 00:06:15,196 Speaker 1: well be a criminal. But the half who stay in, 127 00:06:15,236 --> 00:06:18,356 Speaker 1: you know, including Caroline and his shot and Gary, they 128 00:06:18,476 --> 00:06:22,436 Speaker 1: become convinced to the narrative that like Sam's right all 129 00:06:22,476 --> 00:06:25,236 Speaker 1: the time, that becomes the new rule. So that that 130 00:06:25,316 --> 00:06:29,956 Speaker 1: creates kind of the psychology of FTX that it's it's 131 00:06:29,996 --> 00:06:34,476 Speaker 1: sort of like that Sam is beyond questioning, and that 132 00:06:34,996 --> 00:06:38,276 Speaker 1: obviously that leads to what it leads to. Anyway, you mentioned, 133 00:06:38,436 --> 00:06:40,756 Speaker 1: I want to talk about your interactions with Sam bankman 134 00:06:40,836 --> 00:06:43,316 Speaker 1: Free for a bit. One of your actual interactions with 135 00:06:43,396 --> 00:06:45,556 Speaker 1: Sam Bcmanfree has become evidence in the trial. Can you 136 00:06:45,596 --> 00:06:49,036 Speaker 1: explain this interaction and can you explain how the prosecutors 137 00:06:49,036 --> 00:06:49,556 Speaker 1: have used it. 138 00:06:49,996 --> 00:06:54,836 Speaker 2: So I've done two Bloomberg podcasts with him, and the 139 00:06:54,916 --> 00:06:57,276 Speaker 2: first of them it was like maybe a little early 140 00:06:57,316 --> 00:06:59,476 Speaker 2: in his celebrity. I was twenty twenty one, I want 141 00:06:59,476 --> 00:07:01,796 Speaker 2: to say, and we just like we just have like 142 00:07:01,836 --> 00:07:04,836 Speaker 2: a very geeky conversation about crypto market structure, just like 143 00:07:05,636 --> 00:07:08,676 Speaker 2: how do these exchanges work? And I didn't really know anything, 144 00:07:08,716 --> 00:07:10,556 Speaker 2: but like I come from a sort of you know, 145 00:07:11,116 --> 00:07:14,516 Speaker 2: traditional finance equity market structure background, so we could have it. 146 00:07:14,556 --> 00:07:15,916 Speaker 2: And you know he does too, right, he came from 147 00:07:15,956 --> 00:07:18,516 Speaker 2: Chan Street, so we could have an interesting conversation about like, 148 00:07:18,956 --> 00:07:22,116 Speaker 2: you know, pre funding trades on exchanges, and like, you know, 149 00:07:23,596 --> 00:07:25,756 Speaker 2: one thing we talked about a lot was there had 150 00:07:25,796 --> 00:07:29,916 Speaker 2: been this epidemic of crypto exchanges blowing up, and like 151 00:07:29,956 --> 00:07:31,796 Speaker 2: one thing that FCX was promising is we have a 152 00:07:31,796 --> 00:07:36,876 Speaker 2: better sort of risk management system. And he, in his 153 00:07:37,436 --> 00:07:39,356 Speaker 2: role as sort of like an elder statesman of crypto, 154 00:07:39,476 --> 00:07:42,156 Speaker 2: like walked through all the bad ways that all the 155 00:07:42,196 --> 00:07:44,396 Speaker 2: other exchanges did it, which is basically like they didn't 156 00:07:44,436 --> 00:07:46,516 Speaker 2: have any system. They like blew people out of trades 157 00:07:46,556 --> 00:07:48,756 Speaker 2: sloppily and then lost a lot of money. They didn't 158 00:07:48,756 --> 00:07:50,596 Speaker 2: have any sort of insurance fund, and so they had 159 00:07:50,636 --> 00:07:53,876 Speaker 2: to like basically haircut winning traders in order to you know, 160 00:07:53,916 --> 00:07:57,396 Speaker 2: make up for losses by losing traders. And he was like, 161 00:07:57,436 --> 00:07:59,436 Speaker 2: and we have a different system. We have an intelligence 162 00:07:59,436 --> 00:08:01,996 Speaker 2: system for blowing people out. We don't just like put 163 00:08:02,036 --> 00:08:04,116 Speaker 2: in market orders to sell stuff on the exchange. We 164 00:08:04,196 --> 00:08:07,876 Speaker 2: like have liquidity providers who like step in, and we 165 00:08:07,916 --> 00:08:09,796 Speaker 2: have an insurance fund too, but we never really had 166 00:08:09,836 --> 00:08:11,636 Speaker 2: to draw on that. And so the interaction that gets 167 00:08:11,636 --> 00:08:14,476 Speaker 2: played at the trial is him saying we've never really 168 00:08:14,836 --> 00:08:16,756 Speaker 2: essentially says, we've never really had losses in a day, 169 00:08:16,836 --> 00:08:20,116 Speaker 2: like we've always been able to stop losing trades before 170 00:08:20,116 --> 00:08:23,636 Speaker 2: they cause any material loss to FTX, And what prosecutors 171 00:08:23,636 --> 00:08:25,636 Speaker 2: say is that that's not true, and they had a 172 00:08:25,636 --> 00:08:27,676 Speaker 2: big loss early on that sort of like ate away 173 00:08:27,716 --> 00:08:30,036 Speaker 2: at their entire insurance fund. This is in the context 174 00:08:30,076 --> 00:08:34,036 Speaker 2: of like also Gary Wan testifying that the insurance fund 175 00:08:34,156 --> 00:08:36,556 Speaker 2: was essentially a fake and that they like displayed on 176 00:08:36,596 --> 00:08:39,236 Speaker 2: their web page a fake number that was generated by 177 00:08:39,236 --> 00:08:41,516 Speaker 2: a random number generator to say, this is how much 178 00:08:41,556 --> 00:08:44,636 Speaker 2: money we have backing FTX trades. So the thing that 179 00:08:44,676 --> 00:08:47,996 Speaker 2: he told me about like ftx's risk management was in 180 00:08:48,036 --> 00:08:52,476 Speaker 2: the prosecution story essentially false, and it's like, you know, 181 00:08:52,556 --> 00:08:54,156 Speaker 2: that's like sort of the heart of the fraud is 182 00:08:54,556 --> 00:08:57,516 Speaker 2: that he was telling everyone not only are we like 183 00:08:57,556 --> 00:08:59,436 Speaker 2: not stealing the money, but we're like doing an extra 184 00:08:59,516 --> 00:09:02,356 Speaker 2: good job of risk management to make sure that your 185 00:09:02,356 --> 00:09:05,076 Speaker 2: money doesn't get lost. And in fact, it turns out 186 00:09:05,076 --> 00:09:06,636 Speaker 2: they were doing kind of an extra bad job. 187 00:09:07,676 --> 00:09:09,476 Speaker 1: You had this other interaction with it than that. It 188 00:09:09,516 --> 00:09:13,356 Speaker 1: gets repeated over and over and I think slightly misconstrued, 189 00:09:13,356 --> 00:09:16,796 Speaker 1: but maybe I'm wrong. Like our listeners if they if 190 00:09:16,836 --> 00:09:19,876 Speaker 1: they're loitering in the vicinity of this subject for very long? 191 00:09:20,116 --> 00:09:22,436 Speaker 1: Are going to run across this thing that you did 192 00:09:22,436 --> 00:09:24,076 Speaker 1: with him all night? It must have been the second 193 00:09:24,116 --> 00:09:26,916 Speaker 1: podcast interview you did, Yeah, exactly, and it was on 194 00:09:26,956 --> 00:09:29,556 Speaker 1: the odd Lots podcast, the Bloomberg on Lots podcast. Can 195 00:09:29,596 --> 00:09:32,436 Speaker 1: you explain what you were talking about and what he 196 00:09:32,556 --> 00:09:34,356 Speaker 1: said and how it's been misconstrued? 197 00:09:35,316 --> 00:09:37,596 Speaker 2: We had him on odd loads repeatedly because he would 198 00:09:37,676 --> 00:09:39,676 Speaker 2: just sort of like talk about whatever you wanted to 199 00:09:39,876 --> 00:09:42,276 Speaker 2: in like the crypto world, in a way that seemed 200 00:09:42,396 --> 00:09:45,676 Speaker 2: very like open and candidate and not always in his 201 00:09:45,716 --> 00:09:50,796 Speaker 2: best interests. Yes, in hindsight, it was not as open 202 00:09:50,796 --> 00:09:52,876 Speaker 2: and candidate as I thought, but it was even more 203 00:09:52,996 --> 00:09:55,076 Speaker 2: not in his best interest to me. I don't remember 204 00:09:55,116 --> 00:09:56,796 Speaker 2: what the topic of this. It was just like we 205 00:09:56,796 --> 00:10:00,196 Speaker 2: were like, hey, let's like, you know, talk about crypto stuff. 206 00:10:00,636 --> 00:10:02,836 Speaker 2: And so one thing that was on my mind at 207 00:10:02,836 --> 00:10:05,476 Speaker 2: the time was like a corner of decentralized finance called 208 00:10:05,796 --> 00:10:10,436 Speaker 2: yield farming, which is basically I mean, you can read 209 00:10:10,476 --> 00:10:12,436 Speaker 2: his explanation because it's famous now, but I was like, 210 00:10:12,556 --> 00:10:15,236 Speaker 2: explain to me yield farming, and he was like, well, 211 00:10:15,396 --> 00:10:18,196 Speaker 2: it's like you have a box and you have you 212 00:10:18,276 --> 00:10:20,196 Speaker 2: put some token, you get some money in the box. 213 00:10:20,236 --> 00:10:23,276 Speaker 2: Then you're just some tokens, and you say the box 214 00:10:23,356 --> 00:10:24,716 Speaker 2: is like the greatest thing in the world and it's 215 00:10:24,716 --> 00:10:26,836 Speaker 2: going to replace all banks. And then you sell the 216 00:10:26,836 --> 00:10:28,236 Speaker 2: tokens for a lot of money and you can put 217 00:10:28,276 --> 00:10:30,356 Speaker 2: more money in the box, and then like the tokens 218 00:10:30,356 --> 00:10:31,636 Speaker 2: go up and people are like, oh, I should buy 219 00:10:31,676 --> 00:10:33,236 Speaker 2: some more of this, and like that's the sort of 220 00:10:33,316 --> 00:10:35,356 Speaker 2: explanation of yield farming. And if you're like, that doesn't 221 00:10:35,356 --> 00:10:37,036 Speaker 2: make any sense, like that's what I said, and that's 222 00:10:37,036 --> 00:10:40,636 Speaker 2: what everyone said. I said to him something like you 223 00:10:40,716 --> 00:10:42,996 Speaker 2: just said I'm in the ponzi business and it's pretty good, 224 00:10:42,996 --> 00:10:44,676 Speaker 2: and he was like, yeah, I kind of what I 225 00:10:44,716 --> 00:10:46,876 Speaker 2: think that, Like people misinterpreted from that is like, if 226 00:10:46,916 --> 00:10:49,276 Speaker 2: you take that out of context, it sounds like I'm 227 00:10:49,316 --> 00:10:52,556 Speaker 2: saying to him, your business is a ponzi And he's like, yeah, 228 00:10:52,596 --> 00:10:54,756 Speaker 2: but that's not true at all. What he was saying 229 00:10:54,876 --> 00:10:58,396 Speaker 2: is that a lot of this, like yield farming, like 230 00:10:58,516 --> 00:11:02,116 Speaker 2: token stuff in crypto in like decentralized finance, is pretty 231 00:11:02,156 --> 00:11:04,996 Speaker 2: ponzi ish. Yeah, And when I said it sounds like 232 00:11:05,036 --> 00:11:06,916 Speaker 2: you're in the ponzi business, I just meant like he was, 233 00:11:07,516 --> 00:11:09,876 Speaker 2: you know, running in exchange where you could train those tokens. 234 00:11:10,316 --> 00:11:13,236 Speaker 2: But I think that at the time, when people listen 235 00:11:13,316 --> 00:11:16,676 Speaker 2: to this, when people who like are involved in crypto 236 00:11:16,756 --> 00:11:19,156 Speaker 2: listen to this, what they what they took away was 237 00:11:20,276 --> 00:11:24,636 Speaker 2: Sam Bankman Fried is trash talking his competition, right, Like 238 00:11:24,716 --> 00:11:28,276 Speaker 2: his competition in some sense is decentralized finance. Right, Like 239 00:11:28,276 --> 00:11:31,276 Speaker 2: he runs one of the biggest at the time centralized exchanges. 240 00:11:31,556 --> 00:11:33,836 Speaker 2: He wants people to trade with him rather than on 241 00:11:33,916 --> 00:11:36,436 Speaker 2: the blockchain and decentralized finance exchanges, which like at the 242 00:11:36,476 --> 00:11:40,476 Speaker 2: time seemed like a real competitor to the more traditional 243 00:11:40,596 --> 00:11:43,836 Speaker 2: financial system that he was kind of imitating at FDx. 244 00:11:44,196 --> 00:11:48,676 Speaker 2: And so he's saying all that stuff is like Ponzi stuff, 245 00:11:48,956 --> 00:11:51,396 Speaker 2: and I'll trade the tokens. But like, I don't, you know, 246 00:11:51,556 --> 00:11:55,196 Speaker 2: like he was not he was not putting it in 247 00:11:55,236 --> 00:11:57,716 Speaker 2: its best light. And I think people he wasn't confessing 248 00:11:57,756 --> 00:12:00,716 Speaker 2: to run now, he wasn't confessing, and he was being 249 00:12:00,796 --> 00:12:03,516 Speaker 2: very cynical about crypto, right, he was being cynical about 250 00:12:04,036 --> 00:12:07,196 Speaker 2: narrowly DeFi but more broadly like the philosophy of crypto 251 00:12:07,316 --> 00:12:09,316 Speaker 2: that made people in crypto mad but it all so 252 00:12:09,396 --> 00:12:12,076 Speaker 2: like it sort of explains why people like me found 253 00:12:12,116 --> 00:12:14,196 Speaker 2: him interesting, because he just never seemed like a crypto 254 00:12:14,316 --> 00:12:17,316 Speaker 2: true believer. He seemed like a guy from traditional finance 255 00:12:17,316 --> 00:12:19,636 Speaker 2: who's like, Wow, here's this huge pot of money that 256 00:12:19,676 --> 00:12:21,636 Speaker 2: I can make. He didn't like he was like, oh, yeah, 257 00:12:21,636 --> 00:12:23,156 Speaker 2: crypto is gonna change the world. He's like, yeah, it's 258 00:12:23,156 --> 00:12:24,836 Speaker 2: a box. You put money in the box. It's fine. 259 00:12:24,996 --> 00:12:28,716 Speaker 2: So I think that, Like it seemed at the time 260 00:12:28,836 --> 00:12:31,236 Speaker 2: like he had a sort of like charming and refreshing 261 00:12:31,316 --> 00:12:34,356 Speaker 2: level of cynicism, but then of course, in hindsight, like 262 00:12:34,916 --> 00:12:37,116 Speaker 2: not only did he have much more centicism, but also 263 00:12:37,236 --> 00:12:39,596 Speaker 2: like the trade he described, he ends up by being like, 264 00:12:39,596 --> 00:12:41,716 Speaker 2: you can put all that you can, like say, this 265 00:12:41,836 --> 00:12:44,316 Speaker 2: box has like a huge market value, and then you 266 00:12:44,316 --> 00:12:46,836 Speaker 2: can borrow against it, and then when you borrow against it, 267 00:12:46,876 --> 00:12:48,596 Speaker 2: you never have to pay the money back, and like 268 00:12:48,636 --> 00:12:51,196 Speaker 2: when the market value collapses, you have all the money 269 00:12:51,396 --> 00:12:53,196 Speaker 2: and someone else has left with the losses. And he 270 00:12:53,276 --> 00:12:57,236 Speaker 2: was like describing like a hypothetical trade and decentralized finance. 271 00:12:57,276 --> 00:12:59,516 Speaker 2: But of course he was also like precisely describing what 272 00:12:59,676 --> 00:13:02,676 Speaker 2: FTX and olimedia ended up doing, and so it is 273 00:13:02,716 --> 00:13:04,596 Speaker 2: in that sense, you know it was foreshadowing. 274 00:13:05,516 --> 00:13:15,636 Speaker 1: We'll be right back. Welcome back to judging Sam the 275 00:13:15,716 --> 00:13:20,676 Speaker 1: trial of Sam Bankman freed. So you've taken I think 276 00:13:20,836 --> 00:13:24,356 Speaker 1: more of an interest in crypto finance as serious than 277 00:13:24,436 --> 00:13:27,236 Speaker 1: anybody in the world. You've described it better than anybody 278 00:13:27,276 --> 00:13:29,076 Speaker 1: in the world. You've written really well about crypto. You've 279 00:13:29,076 --> 00:13:33,276 Speaker 1: written sometimes kind of cynically about crypto. I'm curious when 280 00:13:33,316 --> 00:13:36,796 Speaker 1: you make crypto people angry with what you write. Are 281 00:13:36,796 --> 00:13:39,356 Speaker 1: they different from other groups who get angry with what 282 00:13:39,476 --> 00:13:41,956 Speaker 1: you write. Is there a different kind of tone around 283 00:13:41,996 --> 00:13:45,636 Speaker 1: crypto than there is around other parts of finance. 284 00:13:45,956 --> 00:13:49,396 Speaker 2: It's funny. My go to example for years of people 285 00:13:49,436 --> 00:13:52,196 Speaker 2: who get angriest about what I read are the people 286 00:13:52,236 --> 00:13:57,076 Speaker 2: who are mad about high frequency training. That's just true. 287 00:13:58,396 --> 00:14:00,676 Speaker 2: So that's like kind of your fault. It is kind 288 00:14:00,676 --> 00:14:02,596 Speaker 2: of Seriously, people get really mad at me about like 289 00:14:02,636 --> 00:14:05,596 Speaker 2: hiratingryto people. I don't know. I mean, like I definitely 290 00:14:05,716 --> 00:14:07,036 Speaker 2: mute a lot of people on Twitter, right, but like 291 00:14:07,076 --> 00:14:10,676 Speaker 2: I don't I wouldn't say that, like like contrary to stereotypes, 292 00:14:10,676 --> 00:14:12,196 Speaker 2: I would not say that I get a lot of 293 00:14:12,236 --> 00:14:15,316 Speaker 2: like weird or furious reactions When I write cynically about 294 00:14:15,316 --> 00:14:17,476 Speaker 2: critic I think that, you know, it's a big world 295 00:14:17,516 --> 00:14:19,036 Speaker 2: and there are a lot of people with different views. 296 00:14:19,036 --> 00:14:21,276 Speaker 2: But I think that like, broadly speaking, people in crypto 297 00:14:21,796 --> 00:14:24,236 Speaker 2: think of me as being fairly generous to them. Like, 298 00:14:25,316 --> 00:14:27,756 Speaker 2: you know, there's no there's no crypto like mindset, right, 299 00:14:27,756 --> 00:14:29,356 Speaker 2: Like crypto isn't a thing, right, It's just like a 300 00:14:29,396 --> 00:14:31,516 Speaker 2: collection of people, right, And so it is. I think 301 00:14:31,556 --> 00:14:34,276 Speaker 2: it's I think it's like really true and sociologically interesting 302 00:14:34,316 --> 00:14:37,556 Speaker 2: that like the beginning of crypto is really oppositional to 303 00:14:37,596 --> 00:14:41,076 Speaker 2: traditional finance, where like, you know, the openness of the 304 00:14:41,116 --> 00:14:45,636 Speaker 2: blockchain and storing your money yourself rather than at a 305 00:14:45,636 --> 00:14:47,636 Speaker 2: bank that's going to use it to make risky bets. 306 00:14:48,276 --> 00:14:50,556 Speaker 2: Is like those are the obvious appeals of crypto, and 307 00:14:50,596 --> 00:14:53,116 Speaker 2: then over time the numbers keep going up, and so 308 00:14:53,236 --> 00:14:56,276 Speaker 2: all these people flock into speculate and you have people 309 00:14:56,356 --> 00:14:58,556 Speaker 2: like Sam Bankman Freed who are like, I can make 310 00:14:59,116 --> 00:15:03,596 Speaker 2: a fortune arbitraging bitcoin prices between you know, Asia and America. 311 00:15:04,156 --> 00:15:06,916 Speaker 2: And when those people get into it, they just want 312 00:15:06,916 --> 00:15:09,076 Speaker 2: to make money, and they come from in many cases, 313 00:15:09,276 --> 00:15:11,556 Speaker 2: is like in his case, in three hours case, they 314 00:15:11,596 --> 00:15:15,076 Speaker 2: come from traditional financial firms where the way you make 315 00:15:15,116 --> 00:15:17,516 Speaker 2: money is like you spot an arbitrage and you lever 316 00:15:17,596 --> 00:15:20,236 Speaker 2: it up one hundred times, and it just looks exactly 317 00:15:20,396 --> 00:15:23,156 Speaker 2: like the sort of traditional financial system that blew up 318 00:15:23,196 --> 00:15:27,516 Speaker 2: in two thousand and eight, except it's unregulated, it's offshore, 319 00:15:27,916 --> 00:15:30,676 Speaker 2: and you know it's taking money from retail speculators, and 320 00:15:30,836 --> 00:15:32,676 Speaker 2: it's like run by twenty eight year olds, and it 321 00:15:32,716 --> 00:15:34,636 Speaker 2: blows up like as terribly as you could hope for, 322 00:15:34,676 --> 00:15:37,036 Speaker 2: and like everyone goes to jail. Its shape is very 323 00:15:37,196 --> 00:15:38,476 Speaker 2: reminiscent of two thousand and eight. 324 00:15:38,596 --> 00:15:40,916 Speaker 1: Right, I want to swerve for a second and talk 325 00:15:40,956 --> 00:15:42,556 Speaker 1: a bit about your career, if that's all right, Can 326 00:15:42,596 --> 00:15:44,276 Speaker 1: we do that? Sure? I want to know where you 327 00:15:44,316 --> 00:15:46,396 Speaker 1: come from, Like where'd you grow up and how did 328 00:15:46,436 --> 00:15:48,716 Speaker 1: you end up getting into finance and then end up 329 00:15:48,716 --> 00:15:49,676 Speaker 1: writing about finance. 330 00:15:50,756 --> 00:15:53,836 Speaker 2: I grew up on my island. I precociously read Liar's 331 00:15:53,876 --> 00:15:57,156 Speaker 2: Poker as and I was like, this sounds fun. If 332 00:15:57,156 --> 00:15:58,796 Speaker 2: you had found me at some point, like in high school, 333 00:15:58,796 --> 00:16:02,916 Speaker 2: I would have been like Alvia, you know, Salid Brothers, 334 00:16:02,956 --> 00:16:05,036 Speaker 2: Bond Trader or whatever. But then I like got to 335 00:16:05,076 --> 00:16:08,636 Speaker 2: college and very much swerved and I was a classics 336 00:16:08,636 --> 00:16:12,116 Speaker 2: major and I did not take economics. I had friends 337 00:16:12,156 --> 00:16:14,436 Speaker 2: who took like X ten, the big economics class, and 338 00:16:14,436 --> 00:16:15,956 Speaker 2: I would like leave the lunch table when they were 339 00:16:15,956 --> 00:16:18,876 Speaker 2: talking about it was like this is boring, and like 340 00:16:18,916 --> 00:16:21,316 Speaker 2: there was you know, recruiting senior year when it's like, oh, like, 341 00:16:21,356 --> 00:16:22,916 Speaker 2: you go work at an investment bank, and I didn't 342 00:16:22,916 --> 00:16:25,676 Speaker 2: really do it. I graduated with no job. I was like, 343 00:16:25,956 --> 00:16:28,716 Speaker 2: she got a job, and I was able to use 344 00:16:28,716 --> 00:16:31,636 Speaker 2: connections to get a job teaching high school Latin for 345 00:16:31,676 --> 00:16:35,036 Speaker 2: a year. And I did what everyone in that situation 346 00:16:35,236 --> 00:16:37,356 Speaker 2: then does, which is I went to law school. And 347 00:16:37,436 --> 00:16:40,556 Speaker 2: in law school I sort of rediscovered my interest in like, 348 00:16:41,396 --> 00:16:44,236 Speaker 2: you know, financial markets and mergers and acquisitions and stuff. 349 00:16:44,236 --> 00:16:46,196 Speaker 2: And so then I became an M and a lawyer. 350 00:16:46,636 --> 00:16:48,716 Speaker 2: And in two thousand and seven, if you were an 351 00:16:48,796 --> 00:16:50,636 Speaker 2: M and a lawyer, what you wanted to be was 352 00:16:50,636 --> 00:16:52,876 Speaker 2: an investment banker. So then I became an investment banker. 353 00:16:53,036 --> 00:16:54,716 Speaker 2: And then I did that for a while, and then 354 00:16:55,156 --> 00:16:56,676 Speaker 2: I really didn't want to do that anymore, so I 355 00:16:56,716 --> 00:16:57,916 Speaker 2: became a writer on the internet. 356 00:16:58,076 --> 00:17:01,556 Speaker 1: So that transition, Why did you decide? 357 00:17:01,676 --> 00:17:03,716 Speaker 2: So it's not like liar's poker directly sent me to 358 00:17:03,796 --> 00:17:06,996 Speaker 2: investment banking, but like it did, like pave the way 359 00:17:07,036 --> 00:17:08,996 Speaker 2: a little bit, And I know that that's like you 360 00:17:09,236 --> 00:17:11,156 Speaker 2: regret that or whatever, but you know, it's fine. 361 00:17:11,636 --> 00:17:14,956 Speaker 1: Your path resembles my own path, Like I had this 362 00:17:15,036 --> 00:17:17,676 Speaker 1: hostility the economics department when I was in college and 363 00:17:19,196 --> 00:17:21,676 Speaker 1: didn't have a job when I graduated and all that. Anyway, 364 00:17:21,996 --> 00:17:25,316 Speaker 1: it's I'm curious about that transition out of investment banking 365 00:17:25,396 --> 00:17:28,996 Speaker 1: to writing. Why did you decide you didn't want to 366 00:17:28,996 --> 00:17:30,356 Speaker 1: be an investment banker anymore. 367 00:17:30,596 --> 00:17:32,876 Speaker 2: I started as an investment banker as like an associate 368 00:17:33,396 --> 00:17:36,596 Speaker 2: in a weird desk where I was like structuring stuff 369 00:17:36,956 --> 00:17:42,876 Speaker 2: and I was doing interesting stuff involving like math and 370 00:17:43,356 --> 00:17:46,836 Speaker 2: law and like getting into the guts of things. But 371 00:17:46,876 --> 00:17:48,836 Speaker 2: then as you get more senior, you know the job 372 00:17:48,916 --> 00:17:52,676 Speaker 2: is ultimately a sales job, and so I was spending 373 00:17:52,716 --> 00:17:57,596 Speaker 2: less time, you know, learning and understanding things, and more 374 00:17:57,636 --> 00:18:02,036 Speaker 2: time getting on planes to give clients updates. So I 375 00:18:02,076 --> 00:18:04,116 Speaker 2: was getting worse at it. I was enjoying it less, 376 00:18:04,196 --> 00:18:06,756 Speaker 2: and I vaguely imagined being a writer, and so like 377 00:18:06,796 --> 00:18:08,876 Speaker 2: the sort of you know, the lines crossed and it 378 00:18:08,876 --> 00:18:09,916 Speaker 2: became a good time to leave. 379 00:18:11,516 --> 00:18:13,476 Speaker 1: I want to talk to you a bit about there's 380 00:18:13,476 --> 00:18:16,996 Speaker 1: a there's a part of my book. I almost called you. 381 00:18:17,236 --> 00:18:20,436 Speaker 1: I called you. It's just just to clear the air here. 382 00:18:20,476 --> 00:18:22,436 Speaker 1: I thought it was really funny that I was a 383 00:18:22,436 --> 00:18:24,916 Speaker 1: few months into like hanging around with Sam and I 384 00:18:24,996 --> 00:18:28,436 Speaker 1: was questioning whether this was the character I wanted to 385 00:18:28,476 --> 00:18:30,916 Speaker 1: be with. And I thought, I'll call Matt Levine and 386 00:18:30,956 --> 00:18:33,516 Speaker 1: ask him for advice. You remember this call, I said, 387 00:18:33,596 --> 00:18:35,556 Speaker 1: I called you, and I said, I said, I said, 388 00:18:35,756 --> 00:18:37,756 Speaker 1: if you were going to put me with any character 389 00:18:37,796 --> 00:18:39,996 Speaker 1: in Crypto, who would it be? And you said, we're 390 00:18:39,996 --> 00:18:42,876 Speaker 1: not even thinking about Sam Bay and Freed. And it 391 00:18:42,916 --> 00:18:44,756 Speaker 1: was one of those little things that gave me confidence 392 00:18:44,796 --> 00:18:46,516 Speaker 1: I was in the right place because I hadn't actually 393 00:18:46,516 --> 00:18:48,676 Speaker 1: been paying all that much attention to Crypto, and I 394 00:18:48,716 --> 00:18:50,836 Speaker 1: thought I was in the right place. But I didn't know. 395 00:18:50,956 --> 00:18:52,796 Speaker 2: And that's why you're giving me ten percent of the 396 00:18:52,836 --> 00:18:54,636 Speaker 2: movie though, right, did you. 397 00:18:54,596 --> 00:19:05,796 Speaker 1: Get the check yet? We'll be right back, welcome back. 398 00:19:06,796 --> 00:19:09,756 Speaker 1: I'm still wrestling with this. When I all blew up 399 00:19:09,916 --> 00:19:14,116 Speaker 1: and all right, there's some pile of money missing, it 400 00:19:14,156 --> 00:19:16,396 Speaker 1: was a little unclear how big that pile of money 401 00:19:16,916 --> 00:19:19,236 Speaker 1: missing was it seems to see it still be a 402 00:19:19,316 --> 00:19:20,116 Speaker 1: little unclear. 403 00:19:20,196 --> 00:19:22,516 Speaker 2: It's completely unclear to me. I have no idea, and. 404 00:19:22,436 --> 00:19:24,676 Speaker 1: So are you even watching if you've noticed that, Like 405 00:19:24,836 --> 00:19:27,636 Speaker 1: the bankruptcy people, the number they keep they say they 406 00:19:27,796 --> 00:19:30,916 Speaker 1: found keeps going up, and the last number was like 407 00:19:30,956 --> 00:19:33,836 Speaker 1: seven point three billion, and the customer deposits missing was 408 00:19:33,876 --> 00:19:36,836 Speaker 1: eight point six billion. What I'm wondering is to what 409 00:19:36,916 --> 00:19:40,156 Speaker 1: extent the money is lost, like lost in a bad trade, 410 00:19:40,516 --> 00:19:43,236 Speaker 1: and to what extent's lost like, oh, it's in some 411 00:19:43,356 --> 00:19:45,996 Speaker 1: exchange in South Korea or some bank they didn't pay 412 00:19:45,996 --> 00:19:49,356 Speaker 1: attention to. And I was just wondering whether you were 413 00:19:49,556 --> 00:19:52,036 Speaker 1: one following that doesn't sound like you're following that. 414 00:19:52,316 --> 00:19:53,516 Speaker 2: My sense is that there was a lot of money 415 00:19:53,556 --> 00:19:55,076 Speaker 2: lost on bad trades. I think that, like. 416 00:19:55,276 --> 00:19:58,276 Speaker 1: It's unclear what it's unclear what those bad trades were. 417 00:19:59,276 --> 00:19:59,676 Speaker 1: That's there. 418 00:19:59,796 --> 00:20:02,436 Speaker 2: I agree. I think that, like there are interesting theories 419 00:20:02,556 --> 00:20:05,196 Speaker 2: that Alameda was sort of a lost leader to get 420 00:20:05,236 --> 00:20:08,676 Speaker 2: people onto FTX, right, there's like a theory that Alameda 421 00:20:08,756 --> 00:20:12,516 Speaker 2: was sort of regularly losing money on trades, either because 422 00:20:12,516 --> 00:20:14,076 Speaker 2: it was a market maker that was not doing a 423 00:20:14,156 --> 00:20:16,036 Speaker 2: very good job of market making and so you would 424 00:20:16,076 --> 00:20:18,556 Speaker 2: always like get a good trade on FTX because Alameda 425 00:20:18,636 --> 00:20:20,996 Speaker 2: was always losing money on the other side, or because 426 00:20:21,396 --> 00:20:24,156 Speaker 2: Alameda was the sort of counterparty for a lot of liquidations, 427 00:20:24,196 --> 00:20:26,516 Speaker 2: and so if you got liquid on FTX, because the 428 00:20:26,516 --> 00:20:29,116 Speaker 2: trade moved against you, Alameda was on buying it, and 429 00:20:29,156 --> 00:20:32,356 Speaker 2: Alameda was constantly losing money by taking position by catching 430 00:20:32,396 --> 00:20:35,836 Speaker 2: falling knives. Basically, I think there's like probably some truth 431 00:20:35,876 --> 00:20:38,236 Speaker 2: to both of those theories, but not that much because 432 00:20:38,236 --> 00:20:40,876 Speaker 2: I don't think by the end when FTX was huge, 433 00:20:40,876 --> 00:20:43,556 Speaker 2: I don't think Alameda was a huge percentage of volume. 434 00:20:44,036 --> 00:20:47,396 Speaker 2: I think like the shape of those answers is probably 435 00:20:47,436 --> 00:20:49,036 Speaker 2: like a little bit true, but it's not, like it 436 00:20:49,076 --> 00:20:50,636 Speaker 2: doesn't really explain where a lot of the money went. 437 00:20:50,756 --> 00:20:54,596 Speaker 1: And in addition, if that were true, the prosecutors would 438 00:20:54,596 --> 00:20:56,196 Speaker 1: have teased us have Caroline. 439 00:20:55,836 --> 00:20:58,316 Speaker 2: Yes and no, because I like, to me that story 440 00:20:58,956 --> 00:21:02,036 Speaker 2: is like that story sounds like a Ponzi scheme, but 441 00:21:02,076 --> 00:21:04,676 Speaker 2: it's not intuitively obvious that it's a Ponzi scheme. Like 442 00:21:04,716 --> 00:21:07,116 Speaker 2: I think, like if you heard that story, you're like, oh, 443 00:21:07,596 --> 00:21:10,836 Speaker 2: like they were they lost money by doing trades that 444 00:21:10,876 --> 00:21:13,676 Speaker 2: were good for clients, and like that was good, and 445 00:21:13,796 --> 00:21:15,716 Speaker 2: like they were just on the losing side of trades 446 00:21:15,716 --> 00:21:17,796 Speaker 2: and that was innocent. Right, It's not that bad a 447 00:21:17,956 --> 00:21:20,516 Speaker 2: story intuitively. It's just like when you sort of trace 448 00:21:20,596 --> 00:21:22,796 Speaker 2: it through, you're like, oh, so it was a Ponzi scheme. 449 00:21:22,876 --> 00:21:25,436 Speaker 2: They were like giving investors money by taking it from 450 00:21:25,436 --> 00:21:26,076 Speaker 2: other investors. 451 00:21:26,756 --> 00:21:29,236 Speaker 1: Are there any other theories bouncing around? Oh? 452 00:21:29,276 --> 00:21:31,076 Speaker 2: I mean, like the standard theory is, like they spend 453 00:21:31,076 --> 00:21:32,676 Speaker 2: a lot of money on political donations, they spend a 454 00:21:32,716 --> 00:21:34,476 Speaker 2: lot of money on real estate. Like part of the answers, 455 00:21:34,516 --> 00:21:36,316 Speaker 2: they spent five hundred million dollars on a stake in 456 00:21:36,356 --> 00:21:39,436 Speaker 2: Anthropic that was like a great bet and it's now 457 00:21:39,436 --> 00:21:42,276 Speaker 2: worth probably billions of dollars, and so like, as like 458 00:21:42,316 --> 00:21:44,476 Speaker 2: a legal matter, you're not supposed to like take your 459 00:21:44,476 --> 00:21:47,636 Speaker 2: customer money and bet it on early stage AI startups, 460 00:21:47,676 --> 00:21:50,316 Speaker 2: but like that might have worked out, right, And like 461 00:21:50,356 --> 00:21:54,236 Speaker 2: the real estate stuff is like I don't really pretend 462 00:21:54,236 --> 00:21:56,516 Speaker 2: to understand the Bahamas real estate market, but presumably they 463 00:21:56,556 --> 00:21:59,436 Speaker 2: can sell those things for you know, like around what 464 00:21:59,476 --> 00:22:01,276 Speaker 2: they paid for. Right, So some of the money is 465 00:22:01,316 --> 00:22:04,676 Speaker 2: not gone in the sense of like flush down the toilet, 466 00:22:04,716 --> 00:22:05,076 Speaker 2: but it. 467 00:22:05,036 --> 00:22:06,916 Speaker 1: Is in the wrong place. 468 00:22:07,596 --> 00:22:10,076 Speaker 2: Yeah, it's like it's like a lot of fraudsters like 469 00:22:10,196 --> 00:22:12,316 Speaker 2: take customer money and buy a mention for themselves and 470 00:22:12,356 --> 00:22:13,956 Speaker 2: then you can sell the mansion and give them money back. 471 00:22:13,956 --> 00:22:15,076 Speaker 2: But like it's still not okay. 472 00:22:15,236 --> 00:22:20,076 Speaker 1: Yeah, no, I get that. So what questions remain in? 473 00:22:20,556 --> 00:22:22,916 Speaker 1: What questions are you still asking about this? Like to 474 00:22:22,956 --> 00:22:25,316 Speaker 1: what extent is your mind not come to rest on 475 00:22:25,356 --> 00:22:27,836 Speaker 1: the FTX story and you think there are things you 476 00:22:27,916 --> 00:22:28,596 Speaker 1: still want to know? 477 00:22:29,636 --> 00:22:33,676 Speaker 2: I I mean, honestly, the main answer is, I assume 478 00:22:33,716 --> 00:22:38,636 Speaker 2: that Sam will testify. I think that, like the public 479 00:22:38,716 --> 00:22:42,396 Speaker 2: perception of him is really down right now for obvious reasons. 480 00:22:42,676 --> 00:22:46,676 Speaker 2: But I do think that like he like made this 481 00:22:46,756 --> 00:22:48,916 Speaker 2: work for a while people were buying what he was selling. 482 00:22:49,276 --> 00:22:53,716 Speaker 2: And I think he was always a good talker, right, 483 00:22:53,716 --> 00:22:56,596 Speaker 2: And he always like gave you the impression of being 484 00:22:56,676 --> 00:22:59,476 Speaker 2: quite candid, right, And he always was, you know, sort 485 00:22:59,476 --> 00:23:02,676 Speaker 2: of like quick witted and like in his weird way personable. 486 00:23:03,116 --> 00:23:05,916 Speaker 2: I assume he will testify. I assume he will tell 487 00:23:05,956 --> 00:23:10,396 Speaker 2: a story that is like internally coherent. I assume that 488 00:23:10,796 --> 00:23:14,756 Speaker 2: when he's asked even moderately challenging questions, he will have 489 00:23:15,556 --> 00:23:19,196 Speaker 2: quick and like at least superficially reasonable sounding answers. Right, 490 00:23:19,276 --> 00:23:21,476 Speaker 2: I'm interested to see like how he frames the story 491 00:23:21,676 --> 00:23:25,596 Speaker 2: and how compelling it is to me and to everyone 492 00:23:25,596 --> 00:23:28,596 Speaker 2: else and to a jury. And the other class of 493 00:23:28,676 --> 00:23:30,796 Speaker 2: assets that we haven't talked about is the Bankercy estate 494 00:23:30,876 --> 00:23:33,116 Speaker 2: is trying to restart FTX. They're like, oh, we're gonna, 495 00:23:33,156 --> 00:23:35,676 Speaker 2: you know, probably rebrand it and start up an exchange 496 00:23:35,676 --> 00:23:38,156 Speaker 2: again and see what happens. You could imagine the government 497 00:23:38,196 --> 00:23:40,676 Speaker 2: saying like, you can never restart this again. All this 498 00:23:40,796 --> 00:23:43,076 Speaker 2: ip has to be thrown into the ocean, never speak 499 00:23:43,076 --> 00:23:44,796 Speaker 2: of FDIX again. But like they're not doing that. There's 500 00:23:44,836 --> 00:23:46,476 Speaker 2: on and so I don't I mean, there's some chance 501 00:23:46,516 --> 00:23:48,316 Speaker 2: that they'll get back more than like a penny, more 502 00:23:48,356 --> 00:23:50,596 Speaker 2: than the deposits. I don't think they'll do that before 503 00:23:51,516 --> 00:23:53,836 Speaker 2: sam sentencing. And I don't think that the you know, 504 00:23:53,876 --> 00:23:56,556 Speaker 2: the legal system sort of frowns upon like talking about that, 505 00:23:56,956 --> 00:23:59,316 Speaker 2: because like it feels like like a coin flip, right, 506 00:23:59,316 --> 00:24:01,716 Speaker 2: it feels like luck. Right, it feels like you did 507 00:24:02,196 --> 00:24:05,236 Speaker 2: the bad thing and you stole the customer money and 508 00:24:05,276 --> 00:24:07,236 Speaker 2: you put some of it into these lottery tickets and 509 00:24:07,276 --> 00:24:08,956 Speaker 2: then you put the rest of it into like private jet. 510 00:24:09,156 --> 00:24:11,556 Speaker 2: It's for yourself, and like the lottery, your tickets won. 511 00:24:11,836 --> 00:24:13,996 Speaker 2: But that's not like your that doesn't like go to 512 00:24:14,036 --> 00:24:16,636 Speaker 2: your moral guilt. It it's just like a you know, 513 00:24:16,676 --> 00:24:19,396 Speaker 2: you have to get lucky. But what's interesting is like, 514 00:24:19,756 --> 00:24:22,796 Speaker 2: you know, after the fact, like Sam was going around 515 00:24:22,916 --> 00:24:24,916 Speaker 2: trying to save the firm, right, He's trying to find 516 00:24:24,916 --> 00:24:27,836 Speaker 2: a buyer, and at the point when he was doing that, 517 00:24:28,476 --> 00:24:30,236 Speaker 2: it was like a little too late, you know, like 518 00:24:30,316 --> 00:24:34,556 Speaker 2: it was like a little you know, too obvious how 519 00:24:34,596 --> 00:24:36,676 Speaker 2: badly things had gone and how much rest of the 520 00:24:36,756 --> 00:24:40,516 Speaker 2: money was missing. And so I think that like one 521 00:24:40,556 --> 00:24:42,236 Speaker 2: story that Sam will tell is like if he had 522 00:24:42,276 --> 00:24:45,476 Speaker 2: only waited twelve hours before signing the bankruptcy papers, he 523 00:24:45,476 --> 00:24:47,556 Speaker 2: could have saved this whole thing, Right, I don't think 524 00:24:47,556 --> 00:24:50,516 Speaker 2: that's true, But if it turns out that the thing 525 00:24:50,516 --> 00:24:56,436 Speaker 2: has positive value, then he probably wouldn't be going to jail, 526 00:24:56,476 --> 00:24:57,996 Speaker 2: And he certainly wouldn't be going to jail for as 527 00:24:57,996 --> 00:25:00,436 Speaker 2: line as he's looking at here. I think that filing 528 00:25:00,436 --> 00:25:02,396 Speaker 2: for bankruptcy and then getting arrested and then getting the 529 00:25:02,436 --> 00:25:04,556 Speaker 2: money back is just like a terrible order of operations 530 00:25:04,556 --> 00:25:04,916 Speaker 2: for him. 531 00:25:05,276 --> 00:25:07,916 Speaker 1: That's right in addition to the story, Sam tells on 532 00:25:07,956 --> 00:25:09,756 Speaker 1: the stand, is there anything else you I'm looking for 533 00:25:10,236 --> 00:25:12,156 Speaker 1: out of this process? So do you feel like you 534 00:25:12,236 --> 00:25:15,636 Speaker 1: now more or less know what happened? And not much 535 00:25:15,676 --> 00:25:17,396 Speaker 1: that comes out is going to cause you to update 536 00:25:17,436 --> 00:25:18,236 Speaker 1: your understanding. 537 00:25:19,036 --> 00:25:22,236 Speaker 2: So I'm always curious, like how many people knew and like, 538 00:25:22,516 --> 00:25:25,956 Speaker 2: to the extent the number is small, how you could 539 00:25:26,036 --> 00:25:29,316 Speaker 2: keep it small? And I think that, Like, I feel 540 00:25:29,316 --> 00:25:31,956 Speaker 2: like I'm kind of getting satisfied with the answers to that, right, 541 00:25:31,996 --> 00:25:34,316 Speaker 2: Like it does seem like all of the inner circle 542 00:25:34,356 --> 00:25:36,756 Speaker 2: are testifying saying, yeah, we knew it was fraud, with 543 00:25:36,796 --> 00:25:39,596 Speaker 2: like Nishad being like I learned late that it. 544 00:25:39,596 --> 00:25:41,676 Speaker 1: Was fraud in September and. 545 00:25:42,276 --> 00:25:45,476 Speaker 2: Yeah, which is weird because he's sort of integral to 546 00:25:45,516 --> 00:25:47,156 Speaker 2: some of the coding of the fraud. But there is 547 00:25:47,236 --> 00:25:50,756 Speaker 2: kind of an explanation for how other people didn't know that, right, 548 00:25:51,116 --> 00:25:54,396 Speaker 2: which is like some combination of Garrio at. 549 00:25:54,356 --> 00:25:57,396 Speaker 1: Most of the code himself in shortand. 550 00:25:57,076 --> 00:26:00,676 Speaker 2: Sam was a weird passive aggressive manager. Yeah, nobody knew anything, 551 00:26:01,516 --> 00:26:03,316 Speaker 2: but it's still weird, right, I mean, it's still weird 552 00:26:03,356 --> 00:26:06,116 Speaker 2: that the accepted narrative is like five people knew it's 553 00:26:06,156 --> 00:26:08,956 Speaker 2: it's still puzzling to me, but I think that like 554 00:26:09,196 --> 00:26:10,756 Speaker 2: for sort of groping towards an answer on it. 555 00:26:11,756 --> 00:26:14,196 Speaker 1: Thank you for coming on. I really appreciate the time 556 00:26:14,596 --> 00:26:16,116 Speaker 1: and see you down the road. All right. 557 00:26:16,156 --> 00:26:16,396 Speaker 2: Thanks. 558 00:26:17,316 --> 00:26:19,516 Speaker 1: We'll be back in your feed soon with more expert 559 00:26:19,556 --> 00:26:23,476 Speaker 1: analysis and news from Sam Bangmanfreed's trial. Thanks for listening. 560 00:26:25,236 --> 00:26:28,556 Speaker 1: Lydia Gencott is our court reporter. Katherine Girardeau and Nisha 561 00:26:28,676 --> 00:26:32,556 Speaker 1: Venken produced this show. Sophie Crane is our editor. Our 562 00:26:32,636 --> 00:26:35,956 Speaker 1: music was composed by Matthias Bossi and John Evans of 563 00:26:36,036 --> 00:26:40,476 Speaker 1: stell Wagons. Symphonet Judging Sam is a production of Pushkin Industries. 564 00:26:40,876 --> 00:26:43,316 Speaker 1: Got a question or comment for me, There's a website 565 00:26:43,356 --> 00:26:50,476 Speaker 1: for that atr podcast dot com. That's atr podcast dot com. 566 00:26:50,676 --> 00:26:53,796 Speaker 1: To find more Pushkin podcasts, listen on the iHeartRadio app, 567 00:26:53,956 --> 00:26:58,076 Speaker 1: Apple podcasts, or wherever you listen to your podcasts. If 568 00:26:58,116 --> 00:27:01,436 Speaker 1: you'd like to access bonus episodes and listen ad free, 569 00:27:01,796 --> 00:27:04,196 Speaker 1: don't forget to sign up for a Pushkin Plus subscription 570 00:27:04,556 --> 00:27:08,036 Speaker 1: at pushkin dot fm, slash Plus, or on our Apple 571 00:27:08,116 --> 00:27:08,836 Speaker 1: show page.