Sam Bankman-Fried, who stepped down as CEO of FTX on Friday after the business filed for Chapter 11 bankruptcy, lost his entire crypto empire in an epic collapse this week, and even Elon Musk took a moment out of his incredibly hectic week at the head of Twitter to say that he never trusted SBF. SBF.
SBF contacted Musk in March to indicate his interest in funding Musk's acquisition of Twitter through their middlemen (in SBF's instance, William MacAskill from FTX's Future Fund philanthropic arm, which closed on Friday). When Musk's text messages were revealed through a legal action, the story broke in September.
Michael Grimes from Morgan Stanley, Musk's banker on the Twitter purchase, informed Musk at the time that SBF was willing to offer "at least $3 billion" to assist Musk in purchasing Twitter and that SBF wanted to discuss the possibility for "social media blockchain integration."
Musk questioned Grimes, "Does Sam actually have $3B liquid?"
On Friday night, a well-known account that posts internal communications from the IT sector tweeted out the exchange once more as Crypto Twitter proceeded to have a field day re-circulating recent history involving SBF. Correct. He set off my BS detector, which is why I did not think he had $3B, Musk retorted.
In a text message to Musk, Grimes had praised Bankman-Fried's offer:
"He's into you... I do believe you will like him. Ultra genius and doer builder like your formula. Built FTX from scratch after MIT physics."
In order to develop a blockchain-based Twitter, Bankman-Fried was eager to assist. Despite being a supporter of cryptocurrencies, Musk rejected that suggestion and bluntly stated to Grimes:
"Blockchain twitter isn't possible. So long as I don't have to have a laborious blockchain debate."
Even without the blockchain component, Grimes informed Musk, Bankman-Fried was still interested in investing. Musk opted out.
Everyone is naturally eager to remove themselves from the smell in light of the financial misdeeds at FTX, which used customer funds and its own FTT token to support SBF's hedge fund Alameda.
Musk gained control of Twitter on October 27.
After Changpeng "CZ" Zhao, CEO of competing exchange Binance, said his company will sell its interests in FTX's FTT token, the next two weeks saw FTX crash and burn. Due to the collapse in the price of FTT, customers withdrew $5 billion from FTX, which lacked the liquidity to cover them.
Musk undoubtedly had a better week than Bankman-Fried despite this week's public disaster caused by Twitter's bogus account scandal.