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Spellcaster: The Fall of Sam Bankman-Fried

The Smartest Person I Know

Mon Jun 05 2023

Baja Mar Resort and Crypto Bahamas Event

00:00 - 07:59

  • The Baja Mar Resort is a large hotel on a beautiful stretch of beachfront.
  • Tegan, a crypto entrepreneur and influencer, attended the invite-only Crypto Bahamas event at the resort.
  • Katy Perry and Orlando Bloom were also in attendance.
  • Sam Bankman-Fried, co-founder and CEO of FTX, was the star of the event and spoke with Michael Lewis about his success in the crypto world.
  • Sam's awkwardness was seen as charming by his audience who were captivated by his good intentions to give away all of his wealth to charity.
  • FTX was processing $12.5 billion worth of transactions each day at one point.
  • However, behind the scenes, Sam's closest advisors were abandoning him and Bloomberg published stories about issues within FTX.
  • By year's end, FTX was bankrupt with $8 billion missing and Sam was arrested.

Sam Bankman-Fried and Alameda Research

07:52 - 15:36

  • Spellcaster is a six-part series about the fall of Sam Bankman Freed
  • Caroline Ellison, co-CEO of Alameda Research, was described as the smartest person by her friend and colleague Hannah Miller
  • Alameda Research is a powerful crypto trading firm owned by Sam Bankman Fried's crypto empire
  • Caroline was in charge of trading billions of dollars in crypto and had been co-CEO of Alameda for less than a year at 27 years old
  • Caroline enjoyed writing larks (live action role play)
  • Sam and Caroline had broken up the month before Hannah interviewed Caroline about their relationship and its impact on Alameda's operations
  • FTX and Alameda were both owned by Sam but supposed to be completely separate entities due to potential conflicts of interest between an exchange and a trading firm with the same owner

Relationship Between FTX and Alameda Research

15:23 - 23:06

  • FTX and Alameda have a Chinese wall between them to ensure that no one gets customer information from FTX or special treatment from FTX.
  • FTX and Alameda share the same office food delivery people, but they have separated legal and compliance teams.
  • Alameda's venture capital operation had been moved over to FTX, which undermines the company line that everything was separate.
  • Sam Bankman-Fried came out swinging on Twitter after Caroline Hyde's article about Alameda Research and FTX was published.
  • Sam Bankman-Fried claimed there wasn't much of a relationship between Sweet Alameda STX and FTX as of today, but it wasn't as simple as what he was claiming.
  • Sam Bankman-Fried seemed casual during his interview with Bloomberg reporters despite being combative in previous interviews.
  • Sam Bankman-Fried gave puzzling answers when asked about where he lived.

Questions About FTX and Sam Bankman-Fried

22:37 - 28:45

  • Sam Bankman Fried gave puzzling answers about employees living together.
  • Questions were raised about the relationship between FTX and Alameda Research.
  • An article was published about Alameda's operations and Sam and Caroline's living arrangements.
  • A leaked Excel spreadsheet raised questions about Sam's work.
  • People started questioning how a group of 20-somethings gained so much power in the industry.
  • Sam had unchecked power over billions of dollars, but his company lost millions of dollars at once.
  • 'Spellcaster: The Fall of Sam Bankman Freed' is a podcast series hosted by Hannah Miller.