SBF still pretending his crypto collapse was a ‘mistake’ — charges show it was a con

The behavior unveiled in the cascade of criminal and civil charges against Sam Bankman-Fried would seem hard to rationalize — but the accused crypto crook was clearly ready to spew more nonsensical excuses in testimony he was scheduled to give to the House Financial Services Committee on Tuesday.

Of course, his arrest on money laundering, fraud and even campaign finance violations spared us more of the BS he’s been spreading in recent weeks to a slew of gullible reporters. Yet a reading of his leaked prepared remarks, including his admission that he “f–ked up” in evaporating billions in customer funds does provide insight into how Bankman-Fried fooled so many smart people for so long.

It’s been my experience covering white-collar crimes for the past 30 years that to pull such a stunt, you have to be smart, but also a delusional and pathological liar. These are sociopaths who can easily convince themselves that behavior can be justified — as SBF did with his incessant virtue signaling over “effective altruism.”

It’s how they can keep their scams going without a second thought of who they’re hurting. And it’s why if even half of what was in the SBF indictment is true, SBF needs to go to jail for a very long time.

Madoff hid his $64 billion Ponzi scheme for years behind a veneer of respectability that he spun in interviews and meetings with regulators. Yet even in prison, Madoff offered me barely a hint of guilt along with a variety of bizarre excuses for his crimes.

He committed the fraud because he was “trapped into the greed of others,” he once wrote me.

It was only later, after serving time in prison and seeing what damage his scheme did to his own family, that Madoff admitted he made “a terrible mistake.”

SBF, meanwhile, keeps preaching that he was just a witness to the collapse of his FTX crypto exchange — that it was bad luck that happened to him, but because of him.

But this was no accident, prosecutors say. Much of the money supposedly locked in FTX accounts appears to have vanished, either spent or traded away. It’s possibly untraceable and likely unrecoverable.

That means all those investors that had FTX crypto wallets are completely and utterly screwed.

And yet, Bankman-Fried was prepared to tell the House Financial Services Committee that it was all a simple mistake. “FTX didn’t have a team dedicated to risk management,” he admits, and that “we were not transparent,” which is as far as he goes in admitting guilt.

SBF also claims he could have saved the whole operation with an infusion of capital just before his bankruptcy filing in early November. He said he received “a large number of call from prospective investors, many of them potentially interested in contributing more than a billion dollars of financing.”

In other words, “I could have kept the Ponzi scheme going if I just had more money.”
There are so many bizarre and illogical excuses buried in the transcript of SBF’s prepared remarks that I can’t list them all. But just like Madoff before him, it may be a long time before SBF’s reality denial field finally collapses and he admits what really happened.