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Sam Bankman-Fried: The Dark Side of Storytelling

Sam Bankman-Fried storytelling


By John Millen

Sam Bankman-Fried (SBF), found guilty of seven counts of financial conspiracy and fraud, has been sentenced to 25 years in prison by Judge Lewis Kaplan.

Following the astonishingly fast collapse last year of FTX, a $32 billion crypto currency company, the prosecuting attorney called this “one of the biggest frauds in American history."

In a few days last year, SBF, as he is known, went from being one of America’s richest people with an estimated worth of tens of billions of dollars to ground zero.

SBF was convicted on evidence of massive fraud with investor and customer funds. I won’t get into all of the details, which you can easily find online.

Dark side of storytelling

Instead, I want to explore the narrative, the storytelling, SBF used to fool many of the world’s most sophisticated investors, as well as regulators, politicians, media, celebrities and customers. 

This represents the dark side of storytelling.

As I wrote about Bernie Madoff’s Ponzi scheme, the 30-year-old SBF built trust by creating an image of an other-worldly financial expertise producing extraordinary returns.

This compelling profile of a financial genius led many of the world’s leading institutional investors like Black Rock, Sequoia Capital and SoftBank, to invest apparently without doing their typical rigorous due diligence. 

These financial experts, along with FTX spokesperson Kevin O’Leary, an investor best known for being on Shark Tank, invested in a company with no CFO, no independent board of directors and no audits or internal controls.

In fact, the new FTX CEO John Ray III, who was brought in to clean up the mess, said it’s the worst he’s ever seen. That means something coming from a leader who over decades has handled dozens of these meltdowns, including Enron.

Suddenly, the people who bought into the SBF story have realized the sad truth, with one anonymous director saying, “Sam Bankman-Fried was the devil in nerd’s clothes.”

As a storytelling and communication coach for CEOs and other leaders, I find three key storylines SBF employed to build trust: 

1. Origin story: nerdy boy genius

The son of Stanford Law Professors, SBF graduated from MIT and was portrayed as a nerdy boy genius.

He was employed by a traditional Wall Street firm for a few years, but quit to start his own company. SBF was a Bitcoin hobbyist who’d noticed that crypto currency was being valued differently around the world.

He founded Alameda Research to exploit these differences in price. The firm was practicing Bitcoin arbitrage, essentially buying low in one region of the world and selling high in another.

This origin story of a bright innovator in the crypto space served him well in becoming a darling of Silicon Valley and traditional investors. It was also candy for the media for glowing stories on major business publications and TV networks.

It’s like the Apple story of starting in Steve Job’s garage. Who doesn’t want to invest in the next Apple?

Result: This origin story established SBF as having made the “hero’s journey.” This is the term author Joseph Campbell used to describe our most powerful cultural myth: The journey from humble beginnings to extraordinary success.

2. Purpose story: making money to change the world

SBF inspired his company’s employees and a range of other audiences as a proponent of “Effective Altruism,” a so-called “earn-to-give” philosophy.

He said he wanted to make as much money as possible so that he could make the world a better place by giving away 99 percent of his money.

His personal brand, his appearance and nerdy manor, seemed to support this philosophy: including his floppy long hair and his brand uniform of shorts, tee shirt and tennis shoes. 

Dressing like this instead of in a dress shirt or suit gave the impression that he didn’t care about clothes or appearance. SBF was busy making money to give away. 

This facade of an empathetic billionaire was bolstered with charitable donations that helped to market him and FTX as a caring company in a sea of profit takers.

Result: This purpose-story disarmed suspicion: sure he wants to make a ton of money, but it’s for a heart-felt purpose. He’s a giver.

3. Vision story: pioneering the future of finance

This purpose-story, along with tens of millions of dollars in political donations to both parties, gave SBF a warm embrace from Washington lawmakers. 

He testified before Congress advocating for greater regulation that would, ironically now, increase “transparency and accountability” in crypto companies.

Lawmakers gave SBF an additional aura of legitimacy, attracting high-visibility speaking opportunities and media profiles 

Result: This vision-story established SBF as the thought leader with a clear vision of the evolving industry of crypto and blockchain.

Of course, I’m not attributing all of SBF’s “success” in deceiving people to his narrative, but you can see the power of storytelling goes a long way in building trust.

That's why I recommend leaders use these three story types, but for positive purposes. 

I’d say the lesson that we human beings have to learn is that if it seems too good to be true, it probably is.

It’s all right to trust people but don’t suspend your rational thinking. 

As the old saying goes, trust…but verify. 


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John Millen

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