Sam Bankman-Fried’s elite parents enabled his crypto empire

https://www.bloomberg.com/news/features/2023-09-14/sam-bankman-fried-s-parents-did-they-enable-ftx-s-rise

by randycupertino • 3 years ago

54 21 3 years ago

bloomberg.com

jtode• 3 years ago

"Wasn't us ethical Wall Street types, naw, we got fooled like everyone else! Sign up for our NFT exchange!"

djmips• 3 years ago

It's the parents fault!

LapsangGuzzler2• 3 years ago

I'm glad to see the parents getting some scrutiny here because it sounds like FTX probably wouldn't have been successful without them. But it also wouldn't have been this widespread without Sequoia, and this part really got me:

No one in Silicon Valley likes to think of themselves as privileged. Ayn Rand-reading VCs and entrepreneurs tend to bristle at the suggestion that their decisions are anything other than a product of calculated reasoning. Yet the valley’s knee-jerk elitism is so blindingly obvious that it seems almost beside the point to bring up. Investors overwhelmingly favor companies run by White men, often hailing from a tiny group of elite colleges, while shunning anyone who deviates from their superficial sense of what a successful founder should look, talk and act like. Some openly discriminate against founders over the age of 30, against founders with an accent and against anyone who comports themselves as if they’re not already rich. God help you if you show up to a pitch meeting wearing a suit.

When the money becomes so detached from reality as to think that people over the age of 30 aren't capable of building products, you know stuff like this is going to keep happening. So much of the stupid stuff SBF did reads as pure inexperience wrapped around an untouchable genius persona. The fact that FTX ran on Quickbooks and had zero internal financial controls really just shows how little due diligence Sequoia really did when they were vetting SBF.

FTX couldn't have been such a colossal disaster without the Sequoia funding, but they'll plead ignorance and move on to fund the next major 20-something fraud without thinking twice about it.

peyton• 3 years ago

I thought FTX lead its own rounds? Sequoia was in for <1%.

LapsangGuzzler2• 3 years ago

The percentage doesn't matter. FTX basically laundered its reputation through Sequoia. Sequoia gave them legitimacy to go out and be a huge player and tell investors and the celebrities that endorsed them "we're not like the other guys."

bmitc• 3 years ago

Sequoia invested a total of around $225 million, and they wrote this article: https://web.archive.org/web/20221110031633/https://www.sequo....

labrador2• 3 years ago

Bankman-Fried's FTX, senior staff, parents bought Bahamas property worth $300 mln

https://www.reuters.com/technology/exclusive-bankman-frieds-...

Bankman-Fried's parents named owners of $16.4 mln vacation home

They're strategy to claim they were merely supportive parents is undermined by the multimillion dollar properties they bought with money from their son.

0xy2• 3 years ago

While I think they do deserve very close scrutiny and investigation, receiving gifts obtained with stolen funds unknowingly is not in itself a crime.

At the time, by all appearances, their son was a very successful entrepreneur.

Considering SBF himself still doesn't believe he did anything wrong, it's entirely possible he made his family believe it.

labrador2• 3 years ago

New FTX CEO says ‘unprecedented’ lack of oversight, bad decisions caused collapse

https://www.timesofisrael.com/new-ftx-ceo-says-unprecedented...

If my son was running a billion dollar crypto company and I was a lawyer, I'd certainly ask the right questions to make sure he wasn't getting himself in over his head and had protections in place.

But maybe the multimillion dollar property calmed any concern they might have had

xwolfi4• 3 years ago

Bankman was employed by FTX and akin to a cofounder. Hardler an innocent granpa receiving a windfall by surprise from a diligent son committing crimes in secret...

leroy_masochist• 3 years ago

https://archive.ph/TAOu9

PopePompus• 3 years ago

Say what you will, the mom has foresight (she wrote this long before the FTX crash):

https://www.bostonreview.net/forum/barbara-fried-beyond-blam...

"The philosophy of personal responsibility has ruined criminal justice and economic policy. It’s time to move past blame." - Barbara H. Fried

alanfranz• 3 years ago

I’ve read a substantial part of the essay now, and I think you’re reading to much into that. The crimes she cites are quite different, and I doubt she would implying “moving past blame” for something like her son did.

And I think it’s a quite interesting essay!

kaycey2022• 3 years ago

While reading this I found myself to be envious of the leg up some people can get owing to the circumstances of their birth. However, I was also disgusted by the use of term "nepo baby" to condemn this entire class of people.

It seems to me the parents were basically good people who just couldn't see their son's psychopathy for what it was. After all parents' inability to view their children without bias is a trope that has been repeated throughout history.

That said, the philosophy of - as the article put it - the ends justify the means can only inevitably lead to these outcomes. Whether free will is an illusion or not, it is pure hubris to think that our knowledge alone can guide us to absolute good for the greatest number of people. We simply cannot process the entire system, and morality is a helpful heuristic here. The specifics of moral code should always be up for discussion, but to use some outdated part of the code to dismiss the whole is just rash.

xwolfi4• 3 years ago

No read the new indictment of his parents: they were not good people and they funneled money out. The best they did was because the end justified the means, but some of their money extraction out of Alameda clients was pure greed.

1vuio0pswjnm7• 3 years ago

Well done, Bloomberg authors.

blast• 3 years ago

Jung brought into psychology the notion that things tend to turn into their opposite (https://en.wikipedia.org/wiki/Enantiodromia) as well as the concept of the (psychological) shadow.

The question raised in the article of how could such "deeply ethical people" be "so close to such a massive ethical lapse", is less paradoxical in this light. The same phenomenon shows up with the Effective Altruism movement, and of course lots of other things that present themselves as extremely good.

Sam Bankman-Fried’s elite parents enabled his crypto empire

Related Stories