Thursday night time, crypto kingpin turned con man Sam Bankman-Fried was discovered responsible of perpetrating “one of many greatest monetary frauds in American historical past.” At first look, the newborn confronted California wunderkind appears an odd match for the position of archvillain. Within the courthouse subsequent door, a extra typical alternative for the half provided his personal efficiency Monday. Former fraudster-in-chief Donald J. Trump took the stand in his civil trial on allegations of economic fraud.
On the floor, the 2 males seem like polar opposites. Having spent the final month observing SBF’s trial in particular person, nonetheless, I used to be struck by the quite a few methods wherein they’re comparable. All good con males, like all good actors, perceive the facility of storytelling. Sam Bankman-Fried and Donald Trump are specialists within the subject.
After I first noticed SBF in court docket, it took me a second to acknowledge him. His regular uniform—an FTX T-shirt, cargo shorts, and sneakers—had been changed with a colorless purple tie and an ill-fitting grey swimsuit that just about swallowed him complete. It was extra acceptable apparel for a person dealing with life in jail, even when he seemed like a child compelled to take part within the faculty play. Nevertheless it was his new haircut that actually stood out. SBF’s signature had beforehand been a mop of curly black hair that gave the impression to be left to its personal units. Whereas sporting it, he got here off as an eccentric so good he had no time to deal with his look. In court docket, nonetheless, the ’do had been shorn—and with out it, he had misplaced his energy, trying like simply one other finance wiz child caught enjoying with different folks’s cash.
One of many many fictions SBF cultivated was that he was unaware of his picture. As his former girlfriend (and former Alameda Analysis CEO) Caroline Ellison testified, the alternative was true. “He thought his hair was very worthwhile,” she stated in court docket, and that it was “important to his picture.” The change in SBF’s look was so stark that Ellison took practically 30 seconds to determine him from the witness stand. On the opposite finish of the spectrum is our former president. Donald Trump sells himself as an actual property magnate, the scion of a New York dynasty. The ability swimsuit, perma-tan, and well-coiffed hair are important for creating the character and serving to us neglect the fact of his origins: a child from Queens and the son of a slumlord.
In the same method, Trump prides himself on an ostentatious show of wealth. The marble and the omnipresent gold leaf of Trump Tower could seem garish, however the intention behind them is obvious: to venture an aura of extraordinary energy and fabulous affluence. For the supposedly humble billionaire Sam Bankman-Fried, the alternative was true: He wanted to convey humility and disdain for materials possessions as a way to promote himself as an efficient altruist. He drove a Toyota Corolla and inspired Ellison to drive a Honda Civic. Though he lived in a $40 million penthouse and regularly flew on a non-public airplane, the parable of SBF as a beneficiant genius unfold far and large, aided and abetted by a fawning press.
After all, as with every efficiency, a specific amount of improvisation is essential. Trump is legendary for claiming his internet price is no matter he feels it needs to be. It’s additionally essential to recollect: observe makes excellent. In keeping with Ellison’s testimony, SBF instructed her to arrange seven completely different steadiness sheets for him earlier than approving one he felt comfy sharing with stakeholders. FTX and Alameda had been privately held companies, so these shenanigans had been shielded from public view. The Trump Group can also be privately held; solely by way of the lawsuit by the New York legal professional basic has its skullduggery been dropped at mild.
Talking of skullduggery, there are broad similarities between the interior operations of Bankman-Fried’s empire and the Trump Group. Trump Inc. is alleged to have inflated the worth of its belongings to obtain loans, after which purposefully undercounted their worth when it got here to paying taxes. SBF’s model of this was to mark the worth of illiquid cryptocurrencies he owned (and one he created himself) far past the value they may fairly be anticipated to promote for ought to the necessity come up. Therefore why tokens like FTT, created by Bankman-Fried and his colleague Gary Wang, are known as “shitcoins” by the crypto crowd. SBF and Ellison had been manipulating the value of FTT for years, shopping for again tokens each time the value dipped. When compelled to liquidate them to satisfy surging buyer withdrawals from FTX final November, they found—quelle shock—nobody truly needed to purchase the rattling issues. FTT grew to become nearly nugatory in a single day, and FTX filed for chapter shortly thereafter. (Ellison and Wang pleaded responsible to fraud and agreed to cooperate with prosecutors.)
To allow this scheme, SBF stored his circle of belief tight, a vital ingredient for working a profitable con. He employed folks he had identified for years, reminiscent of his on-again, off-again ex-girlfriend, and a childhood pal from math camp, and allegedly consulted his mother and father on the corporate’s operations. Ten of the highest staff of FTX/Alameda even lived collectively in a luxurious penthouse within the Bahamas. The Trump Group, in the meantime, is a household affair, and members of the inside circle are valued based mostly on their loyalty to the person in cost. Trump is infamous for by no means writing emails and never trusting anybody who takes notes. In keeping with an FBI agent known as by the prosecution, SBF, who carried out important enterprise operations through the encrypted utility Sign, participated in 288 discussion groups that had been set to auto-delete.
Lastly, a con man wants to rent the fitting authorized counsel. Trump was a devotee of the infamous shark and authorized fixer Roy Cohn. Cohn was an adviser to Joseph McCarthy, in addition to an extended listing of mobsters (Fats Tony Salerno and John Gotti amongst others) and quite a few businessmen of ailing reputation. From Cohn, Trump discovered a easy authorized technique that has up to now served him effectively: by no means give an inch, at all times go on the offense, and make issues up when you should. The reality is immaterial; it’s the story that counts, not less than within the court docket of public opinion. This technique was on full show throughout Trump’s testimony Monday when he tried to show his personal misdeeds into an indictment of the authorized course of: “It is a very unfair trial, very, very unfair, and I hope the general public is watching.” It was a efficiency Cohn himself may need tried.
Sam Bankman-Fried employed Daniel Friedberg as FTX’s in-house counsel, an legal professional whose earlier stints included working for a web based poker web site that folded when it was revealed insiders might entry a secret “god mode” to see different gamers’ playing cards. After all, as soon as he will get in sizzling water, a con man should take care of himself above all else. After his indictment, SBF employed new attorneys who tried in charge Friedberg for FTX’s unlawful actions—the precise maneuver Trump pulled with Michael Cohen. (Friedberg has reportedly cooperated with US investigators by offering info on how FTX operated.)
In the end, SBF’s makes an attempt to evade punishment for his crimes proved unsuccessful. Donald Trump faces not simply the New York legal professional basic’s lawsuit, however indictments in 4 separate states. And optimistically, he might even see the identical destiny.
