The Naked Emperor podcast review: the rise and fall of crypto’s golden boy Sam Bankman-Fried
Sam Bankman-Fried sold himself as the man who would bring crypto to the masses, kind of like Karl Marx in the fintech space. But was it all a scam?
A rapid rise to fame followed by a dramatic crash to ignominy is soul food for those stuck in the trenches. Sam Bankman-Fried founded the crypto trading platform FTX in 2019 and in just a couple of years went from bitcoin to a personal wealth of $US16bn ($24bn).
No wonder he appeared on the cover of Forbes as the “richest twenty-something in the world”.
But was it all a scam? A new podcast The Naked Emperor – from CBC and hosted by tech journo Jacob Silverman – interrogates the rise and fall of the crypto prodigy.
Bankman-Fried sold himself as the man who would bring crypto to the masses, kind of like Karl Marx in the fintech space. He drove a Toyota Corolla, had facial stubble, slept on a bean bag, didn’t eat animal products and pushed for government regulation of the notoriously libertarian e-currency space.
Bankman-Fried played video games in front of investors and journalists, presumably as some kind of geek power move. He was born on the Stanford University campus to distinguished law professor parents.
Bankman-Fried was presenting as the golden boy of crypto, an antidote to all the tech bros. Good? Yes but possibly not true.
As the title suggests, the rise and fall of Bankman Friedman has parallels with the Hans Christian Andersen classic The Emperor’s New Clothes, in which a vain leader is exposed as a fool before his subjects. Once people stopped believing Bankman-Fried’s wealth was in good order, his empire came crashing down. And then he was arrested in the Bahamas and charged with fraud.
The Securities and Exchange Commission alleges Bankman-Fried was improperly diverting FTX customer funds to his crypto hedgefund Alameda Research and had been doing so since 2019.
The “house of cards”, it is alleged, began to plummet in 2022 when Alameda’s lenders started demanding repayments on billions of dollars in loans.
Bankman-Fried faces 12 criminal charges for a range of offences, including fraud, conspiracy and money laundering. He reportedly faces up to 115 years in prison if convicted on all counts. The former crypto lord denies all. Let’s see what the courts decide.
So what’s Alameda then? Bankman-Fried started the hedgefund in 2017 with some mates from MIT. Essentially the company made bets with borrowed crypto. Sounds risky but what does this reviewer know about making money.
It was at MIT Bankman-Fried discovered effective altruism, which was about making as much money as possible to give as much as possible to the most efficient charities.
Sounds noble but does generosity with what is alleged to be other people’s money count?
Crypto has been a wild ride, from Dogecoin to Potcoin and Bitcoin, people really lost their minds for a bit. In a way the rise of cryptocurrency also mirrors The Emperor’s New Clothes.
Enough people believed enough to pump billions into cryptocurrencies. Until they didn’t and it all came crashing down. There’s a bit of an 80s vibe to this podcast, the music sounds ripped from an arcade game. But more mellow.
In the queue
Escape from Crypto Island – All the weird and wonderful of cryptocurrency captured in a podcast.
WeCrashed – A fraudulent co-working space comes crashing down and it’s delicious.
The Drop Out – The first podcast investigating the rise and fall of Theranos founder Elizabeth Holmes remains a classic
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