Unveiling SBF’s Defense Draft of up to 250 Pages I Did What I Believe Was Right

SBF unveils defense draft of 250 pages, believing it to be the right thing to do.

Source: David Yaffe-Bellany, The New York Times; Translation: Joy, LianGuaiNews

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, made a candid assessment of his predicament in the final, unpublished 15,000-word Twitter thread. “I’m bankrupt, wearing an ankle monitor, and one of the most hated people in the world,” he wrote. “I may never be able to do anything to have a positive impact on my life again.”

He added, “The fact is, I did what I thought was right.”

SBF has been charged with fraud in connection with the collapse of FTX and was arrested in December 2022, then released on bail and placed under house arrest. Since then, he has written hundreds of pages of sometimes rambling self-justifications, covering everything from childhood memories to mathematical calculations.

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In his unpublished draft of the thread, he formatted it as a series of tweets, about 70 pages of typing in total, which criticized some of his closest colleagues and interspersed his arguments with high school photos and pictures of popcorn and garden mazes. Every few pages, key moments in the narrative were accompanied by music video links to Alicia Keys, Katy Perry, or Rihanna.

The 31-year-old SBF was once a prolific poster on Twitter, tagging the thread as “draft within a draft of ideas” and including 29 other links related to FTX documents. One file, titled “Inception V2,” was a lengthy attack on the company’s bankruptcy attorney, including screenshots from a 2010 Christopher Nolan film. A separate link opened a spreadsheet listing SBF’s Amazon orders since 2021.

These roughly 250 pages of documents had not been previously reported and provide a window into SBF’s mentality during his eight months of home detention, as his bail was recently revoked in August. The contents also offer new details about his potential legal defense beyond what his lawyers have revealed in court, revealing how he plans to justify his actions in the trial set for October 3.

Prosecutors allege that SBF orchestrated a scheme to transfer FTX customer funds to a hedge fund he created, Alameda Research, so that his company could engage in venture capital investments, buy real estate, and make political donations. He has not previously pleaded guilty, as if convicted, he could face decades in prison.

During his house arrest, SBF sent these documents to Tiffany Fong, a social media influencer with a YouTube channel about the crypto industry. Fong shared the contents with The New York Times.

“He liked that I don’t work for anyone,” she said. “He thought I could draw my own conclusions.”

Representatives of SBF declined to comment.

In several documents, SBF accused his ex-girlfriend and former deputy Caroline Ellison of contributing to the collapse of FTX. He claimed that she was not capable of handling the responsibilities he entrusted to her as the head of Alameda, and alleged that she cried during a meeting with him and refused to develop trading strategies that could have protected his company from market crashes.

“She consistently avoided discussing risk management – dodging my advice – until it was too late,” he wrote in a document titled “Alameda’s Hedge Failure.” “Every time I made a suggestion, it only made her feel worse. I’m convinced that being my ex did not help.”

In a Twitter draft, SBF also criticized Alameda’s co-CEO Sam Trabucco. The document stated that Trabucco did not get along with Ellison. While Trabucco had good instincts for risk management, by the end of 2021, he was “in the process of quietly exiting.”

SBF wrote that Trabucco preferred to “sail around the world while dating a bunch of men.” He then linked to Rihanna’s music video “Cheers (Drink to That).”

Ellison and two other executives of SBF have admitted to fraud charges and agreed to testify against him. In addition, a fourth individual pleaded guilty this month but did not commit to cooperating in court. Trabucco has not been accused of any wrongdoing.

Trabucco and Ellison’s lawyers declined to comment.

FTX was once hailed as a trusted force in the unregulated world of cryptocurrency, but it collapsed in November last year, causing billions of dollars in losses to users and devastating the entire industry. After being arrested, SBF was released on bail and allowed to live with his parents in Palo Alto, California, where his father has long served as a law professor at Stanford University. They have a German Shepherd named Sandor as their guard dog.

During the past few months, SBF has received guests such as writer Michael Lewis and several journalists, as Lewis is working on a book about him.

Very few people had as much access to SBF as KOL Fong, who had established a good relationship with him online before the failure of FTX. Fong said she visited SBF at his parents’ house over a dozen times and recorded their conversations, which she may eventually release.

Fong said that during his house arrest, SBF spent most of his time in the study, where he played computer games, set up chess boards, and sometimes slept on the couch. She said that most of the time, he was writing legal defenses and recording his thoughts on the case in a hundreds-page Google document. SBF also told her that his family was installing a pickleball court in their yard for him.

In late January this year, SBF handed these documents to Fong. It is currently unclear what he wants her to do with them. Fong suffered losses in the collapse of the cryptocurrency company Celsius Network, and she expressed sympathy for the victims of FTX and skepticism about many of SBF’s claims. She sent a document to Aditya Baradwaj, a former engineer at Alameda, who refuted Mr. SBF’s claims point by point, stating that Alameda’s hedging would be “irrelevant” if FTX did not abuse client funds.

In a draft Twitter post, SBF traced his entrepreneurial journey, from his childhood in Palo Alto to the penthouse he purchased near FTX headquarters in the Bahamas. He recalled meeting Trabucco at a math camp, where he and future colleagues sneaked out after curfew to bake cheesecake brownies, and described his early admiration for Ellison, calling her “very smart”. He also inserted some personal photos, including one of him holding a T-shirt Trabucco bought him in high school.

In another section, SBF posted a link to a document he wrote in 2019, titled “Tonight We’re Young,” which reported on his interaction with Binance founder Zhao Changpeng (aka CZ) at a conference in Taiwan. (He also added a link to the music video for Fun’s “We Are Young.”)

“Tonight is a night of alcohol, women, lasers, and noise, and there’s a strange vibe following me,” SBF wrote. “I ran into CZ a few times again, and each time he diverted his gaze from other things and embraced me: people have a lot of thoughts about us.”

In November of last year, CZ’s post triggered a run on withdrawals, leading to the collapse of FTX. Representatives of Binance did not respond to requests for comment.

Some of SBF’s documents detail the arguments made by his lawyers in court. In documents titled “Inception V2,” “Inception V3,” and “Inception Evidence,” SBF claims that the law firm Sullivan & Cromwell, which oversees the FTX bankruptcy, fabricated the allegations of misappropriation of user funds against him.

“They played it very well,” he wrote. “I would tip my hat to them if it didn’t ruin everything I care about in life.”

A spokesperson for Sullivan & Cromwell declined to comment. Prosecutors argued that SBF’s claims about the firm were “veiled insinuations.”

In several documents, SBF also dissected his history with Ellison and wrote that their relationship “ended in the same way as most of my relationships.”

“They wanted more intimacy, commitment, and public recognition than I was comfortable with,” he wrote in the post, “and I felt claustrophobic.”

In another document, he stated that despite his strong advocacy, Ellison refused to hedge Alameda’s aggressive trading strategy. He recalled once sending her a message that was equivalent to “the harshest words I’ve ever said to her” (he said he no longer has a record of this message).

“If Alameda hedges, it will maintain solvency and avoid the entire unfortunate story,” he wrote.

In a draft on Twitter, SBF wrote that his concerns about Alameda intensified in the spring of 2022 as he packed his bags to go to Washington. A group of employees, including Ellison, were frantically discussing potential deficits in the company’s accounts. SBF wrote that he only participated halfway, but heard enough information to realize that the focus of the conversation was an account labeled “fiat@” — regulatory authorities claimed that FTX executives used this account to transfer client funds to other projects.

“I had heard this name before, but I never knew what it was exactly,” he wrote.

After Ellison pleaded guilty, she stated that she conspired with SBF to support Alameda’s financial situation with client funds. She denied misusing the funds.

“Overall, I won’t lie,” he wrote in a document titled “The Truth.” “This is something I firmly believe.”

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