Thursday F-minus Mailbag
Q: Is SBF still lying to us?
He probably doesn't think so: If he'd been connected to a polygraph during yesterday's interview, I bet he wouldn't have triggered it more than two or three times.
Although, you hardly needed a machine: The painfully obvious tell being when he starts compulsively bouncing his legs.
(Sam: If you have any money left, I'd love to play poker sometime.)
But I suspect the tell was so infrequent because he's deceived himself into believing the least-incriminating story he's able to tell: that FTX was not a deliberate fraud but a failure of sloppy accounting, inattentive management, and criminally negligent risk controls.
I think he genuinely believes that story, mostly because the only way to get people to believe a story is to believe it yourself. And he's definitely gotten some prominent people to believe, like Bill Ackman and Kevin O'Leary.
I believe that he believes. But I'd like to do it all again with a polygraph to find out.
He can put it on pay-per-view to fund some of the legal bills coming his way.
Q: What grade would you give Andrew Sorkin's performance?
A+.
The West Wing is still the best show ever.
Q: ANDREW Sorkin, not Aaron.
Ah! Sorry. I always get those two mixed up.
I think the universal praise Andrew is enjoying today is a result of him sounding tough with his accusatory and occasionally sneering tone — but how hard is it to kick a dog when he's down?
No, Andrew gets an F (and only because F- isn't an option).
He failed to ask some pretty obvious questions: How does anyone lose $10 billion in crypto? Did you have a backdoor into the accounting system? Did Luna break FTX's liquidation engine? Was your $1 billion loan from Alameda funded by FTX deposits? Was your personal stake in Robinhood bought with customer money? How much are you being paid to keep taking sips of La Croix on camera?
Sorkin's tough-sounding performance was fine, but I didn't think his questions were particularly up to the task.
It was probably the easiest interview job ever: FTX is such a comprehensive disaster that asking anything at all about any aspect of it would have been enough to turn SBF into a fidgeting, disseminating, self-incriminating mess.
So I'm giving A. Sorkin an F — just to balance out everyone else giving him an A+.
Q: Did SBF steal customer deposits?
Steal is a strong word that I'm guessing will be difficult to prove in court.
I expect it will depend on whether there is any substance to his response to the question about FTX's terms of service: "There were other parts of the terms of service."
The terms clearly state that customer assets would not be used by FTX, but if he still has money to pay for lawyers, I'm sure they will parse the "other parts" in some way no customer would ever understand.
But no customer ever reads the terms of service, anyway, so even the most careful reading wouldn't have helped anyone.
It would have been counterproductive even: I've used FTX and when you sent them money it very much felt like you were handing it over to them and trusting they would give it back when you ask for it.
It's not at all like sending money to a Vanguard account, where they are clearly holding the assets in your name.
FTX just didn't feel like that, irrespective of what the terms of service say.
Q: Will the FTX bankruptcy have any effect outside of crypto?
In the same week that we learned FTX employees had a $200 DoorDash allowance per day, DoorDash itself announced plans to cut 1,200 employees.
Coincidence? Yes.
But FTX and other failed or failing crypto businesses were big spenders on all kinds of things, from lunch deliveries to web hosting services — FTX has an unpaid AWS bill of $5 million, for example.
I'd bet all sorts of companies will be citing the crypto collapse as a partial excuse for missing estimates in the next set of quarterly earnings reports.
Q: Why hasn't SBF been charged with any crimes?
I'm sure they're coming, but financial crimes are hard to prove: Bernie Madoff, remember, was only arrested so quickly because his sons turned him in the day after he confessed to them.
But I think the lack of urgency here is instructive in other ways, too: For one thing, no taxpayer money will be forthcoming for a bailout, so the political response will be muted.
For two thing, most of the political class thinks crypto is a scam. So the fact that crypto traders got scammed by a scammy crypto exchange is probably not much of a story to them — very much dog bites man.
And for three thing, it all happened in the Bahamas, where both the exchange and the users of the exchange were deliberately avoiding US regulators.
Q: Why'd he agree to incriminate himself by answering all those questions?
My guess is he's deploying the old PR strategy of flooding the media zone: If you've messed up to a headline-worthy degree, rather than lying low and dodging all the questions — and thereby keeping the story alive — you answer every possible question there is to ask until people get thoroughly bored of you and start talking about something else instead.
It's like the scene in The West Wing where Arnie Vinick squashes the story about his support for a failed nuclear plant by holding a marathon press conference and answering any and all questions until everyone's bored senseless.
I know I'm getting bored of SBF, and I'm sure you are, too, so I'll do my best to mention him no further — which is probably what he was hoping for.
Aaron Sorkin couldn't have written it any better.
Thanks for reading, A+ readers, and I'll see you tomorrow for Friday Charts.
No comments:
Post a Comment