Thursday night time, crypto kingpin turned con man Sam Bankman-Fried was discovered responsible of perpetrating “one of the biggest financial frauds in American history.” At first look, the child confronted California wunderkind appears an odd match for the function of archvillain. In the courthouse subsequent door, a extra standard selection 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, nevertheless, 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 ability of storytelling. Sam Bankman-Fried and Donald Trump are specialists within the subject.
When I first noticed SBF in court docket, it took me a second to acknowledge him. His typical uniform—an FTX T-shirt, cargo shorts, and sneakers—had been changed with a colorless purple tie and an ill-fitting grey swimsuit that almost swallowed him entire. It was extra acceptable apparel for a person dealing with life in jail, even when he regarded like a child compelled to take part within the college play. But it was his new haircut that actually stood out. SBF’s signature had beforehand been a mop of curly black hair that seemed to be left to its personal gadgets. While sporting it, he got here off as an eccentric so sensible he had no time to give attention to his look. In court docket, nevertheless, 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 the various fictions SBF cultivated was that he was unaware of his picture. As his former girlfriend (and former Alameda Research CEO) Caroline Ellison testified, the alternative was true. “He thought his hair was very valuable,” she mentioned in court docket, and that it was “essential to his image.” 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 energy swimsuit, perma-tan, and well-coiffed hair are important for creating the character and serving to us neglect the truth of his origins: a child from Queens and the son of a slumlord.
In an identical 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 evident: to undertaking 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 to be able to promote himself as an efficient altruist. He drove a Toyota Corolla and inspired Ellison to drive a Honda Civic. Although he lived in a $40 million penthouse and ceaselessly flew on a personal airplane, the parable of SBF as a beneficiant genius unfold far and vast, aided and abetted by a fawning press.
Of course, as with every efficiency, a certain quantity of improvisation is essential. Trump is legendary for claiming his internet price is no matter he feels it ought to be. It’s additionally essential to recollect: observe makes good. According to Ellison’s testimony, SBF instructed her to organize seven totally 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 Organization can be privately held; solely by means of the lawsuit by the New York legal professional normal has its skullduggery been delivered to mild.
Speaking of skullduggery, there are broad similarities between the inner operations of Bankman-Fried’s empire and the Trump Organization. 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 worth they may fairly be anticipated to promote for ought to the necessity come up. Hence 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 worth of FTT for years, shopping for again tokens every time the worth dipped. When compelled to liquidate them to fulfill surging buyer withdrawals from FTX final November, they found—quelle shock—nobody truly wished to purchase the rattling issues. FTT turned just about 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 saved his circle of belief tight, a vital ingredient for operating a profitable con. He employed folks he had identified for years, akin to his on-again, off-again ex-girlfriend, and a childhood pal from math camp, and allegedly consulted his dad and mom on the corporate’s operations. Ten of the highest workers of FTX/Alameda even lived collectively in a luxurious penthouse within the Bahamas. The Trump Organization, in the meantime, is a household affair, and members of the interior circle are valued primarily based on their loyalty to the person in cost. Trump is infamous for by no means writing emails and never trusting anybody who takes notes. According to an FBI agent known as by the prosecution, SBF, who performed important enterprise operations through the encrypted utility Signal, participated in 288 discussion groups that had been set to auto-delete.
Finally, a con man wants to rent the correct 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 checklist of mobsters (Fat Tony Salerno and John Gotti amongst others) and quite a few businessmen of sick reputation. From Cohn, Trump realized a easy authorized technique that has to this point served him nicely: by no means give an inch, all the time go on the offense, and make issues up for those who should. The fact is immaterial; it’s the story that counts, a minimum of 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: “This is a very unfair trial, very, very unfair, and I hope the public is watching.” It was a efficiency Cohn himself might 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. Of course, 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 accountable Friedberg for FTX’s unlawful actions—the precise maneuver Trump pulled with Michael Cohen. (Friedberg has reportedly cooperated with US investigators by offering data on how FTX operated.)
Ultimately, SBF’s makes an attempt to evade punishment for his crimes proved unsuccessful. Donald Trump faces not simply the New York legal professional normal’s lawsuit, however indictments in 4 separate states. And optimistically, he may even see the identical destiny.