After the epic collapse of Sam Bankman-Fried’s entire crypto empire this week, even Elon Musk took a moment from his extremely chaotic week at the helm of Twitter to declare that he never trusted SBF, who stepped down as CEO of FTX on Friday when the company filed for Chapter 11 bankruptcy.
Bankman-Fried reached out to Musk back in March through their intermediaries (in SBF’s case it was William MacAskill from FTX’s Future Fund philanthropic arm, which shut down on Friday) to express his interest in investing in Musk’s bid for Twitter. That news came out in September when Musk’s text messages leaked through a legal proceeding.
Musk’s banker on the Twitter deal, Michael Grimes from Morgan Stanley, told Musk at the time that SBF was offering «at least $3 billion» to help Musk buy Twitter, and wanted to talk about the potential for «social media blockchain integration.»
Musk asked Grimes, «Does Sam actually have $3B liquid?»
On Friday night, as Crypto Twitter continued to have a field day re-circulating recent history involving SBF, a popular account that shares internal tech industry emails tweeted out the exchange again. Musk replied, «Accurate. He set off my bs detector, which is why I did not think he had $3B.»
Accurate. He set off my bs detector, which is why I did not think he had $3B.
— Elon Musk (@elonmusk) November 12, 2022
Grimes had talked up Bankman-Fried’s offer to Musk, texting, «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.»
Bankman-Fried was interested in helping to engineer a blockchain version of Twitter. Musk, despite being a crypto advocate, shot that proposal down, telling Grimes matter-of-factly, «Blockchain twitter isn’t possible.» He added he would only meet with SBF «so long as I don’t have to have a laborious blockchain debate.»
Grimes told Musk that even absent the blockchain component, Bankman-Fried wanted to invest. Musk passed.
Of course, in light of the financial malfeasance behind the scenes at FTX—which was using customer funds and its own FTT token to prop up SBF’s hedge fund Alameda—everyone is eager to distance themselves from the stench.
On October 27, Musk took control of Twitter.
The next two weeks saw FTX go up in flames after Changpeng «CZ» Zhao, CEO of rival exchange Binance, announced his company would liquidate its holdings of FTX’s FTT token. That tanked the price of FTT and prompted $5 billion of customer withdrawals from FTX, which didn’t have the liquidity to cover.
Musk, even through the public mess of Twitter’s fake account crisis this week, certainly had a better week than Bankman-Fried.