SBF in Shambles (w/Teddy Schleifer)

Sam Bankman-Fried (Photo by Alex Wong/Getty Images)

On the latest episode of Dead Cat, we examine how effective altruism’s crypto benefactor took the world — and the media and the Democratic Party, in particular — for a ride.

Sam Bankman-Fried escaped much of the skepticism that rival exchange Binance has faced — yet it’s SBF’s FTX that has filed for bankruptcy.

With the help of Puck reporter Teddy Schleifer, Dead Cat co-hosts Tom Dotan and I try to make sense of what exactly happened and explain the saga to the non-cryptographically inclined.

Schleifer tells us what the midterm elections will mean for tech and Peter Thiel. Dotan confesses his deficiencies as a political forecaster.

On this week’s episode of the podcast, I’m pretty open that I think the media had a blindspot for Bankman-Fried because of his effective altruism, pedigree, crypto skepticism, and Democratic politics. Yesterday, Stratechery quoted my tweets declaring as much. I assume my tweets caught the newsletter’s attention because I was willing to say something that most reporters won’t really admit publicly.

Eric Newcomer @EricNewcomer

definitely i think the good democrat / guy with a real worldview (EA) was compelling to me. and plus the story of a smart trader who didn't buy into the crypto stuff. but man this is so crazy.

I agree with the subtext of Marc Andreessen’s latest tweets. Bankman-Fried’s performative virtue now appears to have been an obvious cover for his private transgressions. And the left was more susceptible to Bankman-Fried because it shares many of his professed values.

Marc Andreessen @pmarca

"Motivated largely by his own awareness of the discreditable nature of his secret behavior, the covert deviant develops a presentation of self that is respectable to a fault. His whole lifestyle becomes an incarnation of what is proper and orthodox."--Laud Humphreys

Marc Andreessen @pmarca

Affinity Fraud: A type of investment fraud in which a con artist targets members of an identifiable group based on things such as race, age, religion, etc. The fraudster either is or pretends to be, a member of the group. Often the fraudster promotes a Ponzi or pyramid scheme.

But I tweeted last Tuesday and recorded the podcast on Friday — and already the narrative is moving so fast. Republicans are clearly starting to spin up the Bankman-Fried criticism as an anti-Democratic talking point.

I think it’s ridiculous to expect that the federal government should have suspected anything in particular was amiss at FTX relative to the other exchanges, when the company’s own investors didn’t seem to know anything was going on. Yes, I think that the Securities and Exchange Commission should have been more aggressive about regulating crypto broadly and not just waited for things to come undone on their own. But I don’t think Republicans were exactly cheering them on there.

And while the media could have been more skeptical, you can’t expect reporters to ferret out every scandal (though CoinDesk certainly played a role in bringing FTX down). Ultimately, the company and major shareholders are responsible for the company’s behavior.

Eric Newcomer @EricNewcomer

Forget the crypto cult or the investors, you know who is really to blame in the FTX scandal … the media and the Democrats!

So while I think that the mainstream media would have been more skeptical of Bankman-Fried if not for his persona and politics, I don’t think it was a corrupt or conscious act. Here’s a case where the left is guilty of the sort of implicit bias that it’s always talking about.

It’s too easy to overlook someone’s shortcomings when he wraps himself in the very things that you believe in.

Give it a listen