The lessons of the fall of FTX and Sam Bankman-Fried

What could go wrong?

Bankman-Fried, or SBF as he is commonly referred to in crypto circles, may not be a big celebrity in the common-household sense. But if crypto is your thing as a trader, observer or journalist, he was — and in some ways still is — a massive presence. And a massive cautionary tale.

Brady Dale doesn’t buy or trade in crypto. As a crypto journalist for Axios, it’s a conflict that his job doesn’t allow.

But Dale knows crypto, and he has followed SBF’s rise and fall pretty much since the beginning. Which, all things considered, wasn’t very long ago. His fall, aka the collapse of his FTX cryptocurrency and Alameda Research, happened just a few months ago, at the end of 2022.

It’s all detailed in Dale’s new book, “SBF: How the FTX Bankruptcy Unwound Crypto’s Very Bad Good Guy.”

Before that fall, Dale (who once worked for Tehnical.ly as Brooklyn reporter, back when the borough was one of our markets) had pitched a proposal for a book that featured, but didn’t entirely center, SBF. That made it relatively easy to pivot to writing one about the former FTX CEO when publisher Wiley called.

“I have covered most of Sam’s story at least going back to like 2020,” Dale told Technical.ly. ” I had already been paying a ton of attention to the broader crypto story and Sam’s place in it, so it wasn’t too hard for me to fill in whatever gaps in knowledge I had.”

“The story of Sam ultimately underscores the fact that the larger crypto ethic has been right all along.”Brady Dale

For a book about crypto, SBF tells a compelling human story that’s accessible for readers who aren’t in that world. But don’t expect a crypto explainer.

“Here’s the thing. Crypto people are always wishing that someone would just make the magic [crypto explainer] YouTube video or whatever, and that’s just not going to happen,” Dale said. “I’m a firm believer that you can’t ever really get crypto and the blockchain without messing around with some coins. [Non-crypto] people are never going to really get it until it’s so ubiquitous — it’s like it’s email, you just use it. So my hope with the book is that some non-crypto people would be interested in the story itself.”

There doesn’t seem to be a shortage of interest in stories of a rich, young tech geniuses falling from grace. WeWork’s Adam Neumann and Elizabeth Holmes of Theranos each have documentaries plus drama series on multiple streaming platforms.

But the story of SBF, while it has some of those entrepreneurial true crime elements — including the alleged theft of hundreds of millions of crypto tokens soon after FTX filed bankruptcy, a cult-like following and, ultimately, fraud charges — also serves as a warning for people interested in getting into crypto.

“The story of Sam ultimately underscores the fact that the larger crypto ethic has been right all along, and a lot of the problem is that people want the gains but they don’t actually want to commit to the values” of cryptocurrency, Dale said. “Bitcoin and subsequent cryptocurrencies were created with the idea that you could be sovereign over your own wealth.

“But if you’re using a centralized exchange like FTX or Coinbase,” he said, “you should use them just to get on and off and make trades, but a lot of people go beyond that and they just leave all of their assets there. They just trust these third parties to take care of their assets, which was never supposed to be the point of crypto.”

“SBF: How the FTX Bankruptcy Unwound Crypto’s Very Bad Good Guy” is available for presale and  will be released on May 9. Hear more from Dale when he’s a panelist at Philly Tech Week 2023 presented by Comcast’s Every Voice, Every Vote session at the Builders Conference on May 11.

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