Jack Tame: Bankman-Fried's story was too good to be true

Saturday Morning with Jack Tame

25 years.

If Sam Bankman-Fried was to spend his full sentence behind bars, he’d be in his fifties by the time he was released from prison. Still, it could have been worse. The maximum potential sentence faced by the so-called crypto king was more than a century.

Like many, I’ve marvelled in the rise and fall of Sam Bankman-Fried. It’s an extraordinary story. The son of high-profile professors, he made a fortune in crypto currency faster than any human had ever made money before. $NZ 43 billion with his dual crypto-currency companies, FTX and Alameda Research. Companies which turned out to not be nearly as independent from each other, and from each other’s balance books, as they legally should have been.

But what is really extraordinary about the Sam Bankman-Fried story is that we fell for it.

Not you or I, necessarily —even though I’m firmly in the crypto demographic, I’ve never heard anyone sensibly explain what it actually does. It just seems like speculation for the sake of speculation. No different to gambling for the sake of it— by we, I mean the world.

Looking at it now, it all just seems so obvious.

Bankman-Fried, like however many characters before him, perfectly played the part of an uncouth, slobbily-dressed, beanbag-sleeping tech bro. I say characters because —come on— the whole wearing sneakers, shabby socks, and poorly-fitting t-shirts despite billions of dollars in net worth, while meeting a former President – this has become such a cliché for so called tech geniuses.

He suckered the world with his image. And he suckered the world with his money. How many celebrities took a buck, or a few million, to shill for something they didn’t really understand? How many politicians chose not to ask too many questions, but gladly received the campaign donations he passed on their way?

It remains to be seen how much investors will actually get back from Bankman-Fried’s fraud. But following the case, what is clear about his $NZ13 billion fraud is not that it was the work of a tech genius, but that it was the work of a simple conman. The fraud was not breathtaking in its complexity, it was breathtaking in its simplicity. A good old fashioned ponzi scheme.

For all of the hype, then. For all of the fuss. For all of the big promises about crypto’s future and the blazing path of a brilliant young billionaire who’s genius sucked in titans of industry and some of the most powerful people in the World, we are left once again with an old pearl of wisdom: If it sounds too good to be true, it probably is.

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