SBF dubbed ‘most generous billionaire’ in cringeworthy video prior to FTX collapse

Disgraced crypto boss Sam Bankman-Fried was lauded as “the most generous billionaire” in a cringeworthy resurfaced video earlier this year.

Disgraced crypto exchange founder Sam Bankman-Fried was lauded as “the most generous billionaire” in a cringeworthy resurfaced video earlier this year.

As the fallout from the collapse of Mr Bankman-Fried’s companies FTX and Alameda Research continues to ripple through the cryptocurrency market, other major exchanges are scrambling to reassure customers that their funds are safe.

Among them are Binance, the largest crypto exchange — whose founder Changpeng “CZ” Zhao also featured in an eerily similar puff piece by YouTuber Nuseir Yassin of NasDaily.

“The guy you see next to me is the most generous billionaire in the world,” an excited Yassin says in the January 2022 video with the FTX founder.

“Sam has crazy hair! Sam is vegan! Sam sleeps five hours a night! Sam lives in the Bahamas with 10 roommates. Sam is 29 years old only! But Sam has $22 billion. And he wants to donate all of it to charity. But why?”

Yassin then claims that the crypto founder “is not a traditional billionaire because he believes in the concept of ‘earn to give’, which means his goal as a human is to make as much money as possible just to give it away”.

Mr Bankman-Fried explains in the video: “So let’s say that you have $100 and you wanna figure out what you can do with it to help the world.

“Earning to give is thinking about which causes, which charities save the most lives per dollar. The amount of good that you can do for the future of the world is really large and it’s way more than you can do to actually make yourself happy with anything like that amount of money.”

I swear to God I have nothing to do with this. 👀

— Nuseir Yassin (@nasdaily) November 8, 2022

In May, Mr Zhao was featured in an equally enthusiastic NasDaily video branding him the “most humble crypto billionaire”.

“It’s not about making money!” Yassin says of Binance.

“In fact, CZ doesn’t care about money. Look at his clothes! He has no fancy clothes or cars, and he plans to donate his wealth to charity.”

Mr Zhao tells Yassin that money isn’t the most important factor for him.

“I don’t focus on that, I focus on building products people use, how to make that the most efficient, the most impactful thing for the world.”

Elon Musk said Sam Bankman-Fried set off his ‘BS detector’. Picture: Philip Pacheco/AFP

‘BS detector’

At its peak FTX was valued at $US32 billion, with Mr Bankman-Fried luring high-profile celebrity investors like NFL star Tom Brady and then-wife Gisele Bündchen, and striking sponsorship deals including naming rights for the Miami Heat arena.

But questions are being raised about why red flags were not spotted sooner.

Elon Musk said over the weekend he knew early on Mr Bankman-Fried was full of it.

Back in March, Mr Bankman-Fried offered via intermediaries to help Musk buy Twitter, according to texts leaked Friday.

The texts show that Musk’s banker Michael Grimes told Musk that Mr Bankman-Fried was offering “at least $3 billion” to help Musk fund the Twitter deal.

Musk was sceptical. He asked Mr Grimes, “Does Sam actually have $3b liquid?”

My reaction to SBF was … different

— Elon Musk (@elonmusk) November 13, 2022

After the texts were leaked, Musk replied on Twitter, “Accurate. He set off my BS detector, which is why I did not think he had $3b.”

The Tesla billionaire also reacted to a resurfaced puff piece that has since been deleted from the website of Sequoia Capital, FTX’s largest outside investor which had a stake worth $US425 million at its peak.

In the piece, shared on Twitter by Armada ETFs founder Phil Bak, freelance San Francisco author Adam Fisher gushed that “after my interview with SBF, I was convinced: I was talking to a future trillionaire”.

“Whatever mojo he worked on the partners at Sequoia — who fell for him after one Zoom — had worked on me, too,” Fisher wrote.

“For me, it was simply a gut feeling … I don’t know how I know, I just do. SBF is a winner.”

But he added “there was something else I felt: something in my heart, not just my gut”.

“After sitting 10 feet from him for most of the week, studying him in the human musk of the start-up grind and chatting in between beanbag naps, I couldn’t shake the feeling that this guy is actually as selfless as he claims to be,” he wrote.

Musk commented on Twitter, “My reaction to SBF was … different.”

FTX filed for bankruptcy on Friday. Picture: Stefani Reynolds/AFP

Exchanges calm fears

On Friday, Mr Bankman-Fried stepped down from his CEO position at the Bahamas-based FTX and filed for Chapter 11 bankruptcy.

The fourth-biggest exchange collapsed after suffering a liquidity crisis, unable to meet customers’ withdrawal requests.

FTX now faces numerous investigations into whether it mishandled customer funds, amid reports it lent billions of dollars to sister trading company Alameda for risky bets.

According to the Financial Times, FTX had less than $US1 billion in liquid assets against $US9 billion in liabilities before it went bankrupt.

Last week, Mr Zhao warned FTX’s implosion could mirror the start of the 2008 financial crisis.

“With FTX going down, we will see cascading effects,” he told the annual Indonesia Fintech Summit in Bali. “Especially for those close to the FTX ecosystem, they will be negatively affected.”

Binance, along with rivals Crypto.com, OKX and Derebit, have vowed to publish proof they hold sufficient reserves to meet their liabilities, while US-listed exchange Coinbase sent an email to customers on Friday insisting their funds are “safe and secure”.

“Our public, audited financials confirm our financial strength and ample liquidity — we largely hold our assets in USD,” the email said.

“We ended Q3 with $US5.6 billion in total available USD resources, including $US5 billion in cash and cash equivalents. Coinbase holds customer assets 1:1, and we won’t lend those assets without your consent.”

In a blog post last week, the company stressed that meant “there can’t be a ‘run on the bank’ at Coinbase”.

Sam Bankman-Fried is facing a criminal probe in the Bahamas. Picture: Lam Yik/Bloomberg

SBF ‘questioned by police’

Meanwhile, Bloomberg reports Mr Bankman-Fried was interviewed by Bahamian police and regulators on Saturday.

That came after rumours he had fled on his private jet to South America, around the same time FTX reported it had been “hacked” and hundreds of millions of dollars worth of crypto were siphoned from its digital wallets.

“In the Bahamas, law-enforcement inquiries don’t necessarily mean someone will be arrested or charged with a crime,” Bloomberg noted.

Mr Bankman-Fried is also facing investigations by the US Securities and Exchange Commission and the Commodity Futures Trading Commission.

Over the weekend, industry website CoinTelegraph claimed Mr Bankman-Fried and two former FTX associates — co-founder Gary Wang and director of engineering Nishad Singh — were “under supervision” by local authorities in the Bahamas.

The report claimed that the trio, as well as Caroline Ellison, the Hong Kong-based CEO of Alameda Research, were trying to flee to Dubai — which does not have an extradition treaty with the US.

“Right now three of them, Sam, Gary, and Nishad are under supervision in the Bahamas, which means it will be hard for them to leave,” an anonymous source told the publication, adding Ms Ellison “might be able to get to Dubai”.

In another stunning twist, the Bahamas regulator issued a statement on Saturday accusing FTX of lying about why funds were being withdrawn prior to filing for bankruptcy.

FTX had claimed that “per our Bahamian HQ’s regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds” and “as such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators”.

In its statement, the Securities Commission of the Bahamas said it “has not directed, authorised or suggested to FTX Digital Markets Ltd. the prioritisation of withdrawals for Bahamian clients”.

In a statement on Sunday, Bahamas police confirmed FTX was facing criminal investigation.

“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” police said.