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 explain that he never trusted SBF, who resigned as CEO of FTX on Friday, when the company Filed for Chapter 11 bankruptcy.
Bankman-Fried reached out to Musk through their intermediaries back in March (in SBF’s case, it was William MacAskill of the FTX Future Fund’s philanthropic arm who closed on Friday) to express his interest in investing in Musk’s offer for Twitter. This news came out in September when Musk’s text messages were leaked through a court proceeding.
Musk’s banker on the Twitter deal, Morgan Stanley’s Michael Grimes, told Musk at the time that SBF was offering “at least $3 billion” to help Musk buy Twitter and wanted to discuss the potential for “social media blockchain -Integration”.
Musk asked Grimes, “Does Sam actually have $3 billion in liquidation?”
On Friday night, as Crypto Twitter continued to have a field day rehashing the recent story with SBF, a popular account that shares internal tech industry emails tweeted the exchange again. Musk replied, “Exactly. He triggered my BS detector, which is why I didn’t think he had $3 billion.”
Grimes had approached Musk about Bankman-Fried’s offer and texted him: “He’s into you… I think you’ll like him. Ultra genius and doer likes your formula.
Bankman-Fried was interested in helping develop a blockchain version of Twitter. Musk, while a crypto advocate, shot down that suggestion, telling Grimes matter-of-factly, “Blockchain Twitter isn’t possible.” He added that he’ll only meet with SBF “unless I’m having an arduous blockchain debate.” got to”.
Grimes told Musk that Bankman-Fried wanted to invest even without the blockchain component. Musk passed.
Of course, given the financial misconduct behind the scenes at FTX – that was with customer funds and its own FTT token to prop up the SBF hedge fund Alameda – everyone wants to distance themselves from the stench.
On October 27, Musk took control of Twitter.
Over the next two weeks, FTX burst into flames after Changpeng “CZ” Zhao, CEO of rival exchange Binance, announced his company would do so liquidate its holdings of the FTT token from FTX. That depressed FTT’s price and resulted in $5 billion in withdrawals from FTX by customers who didn’t have the liquidity to cover them.
Musk certainly had a better week than Bankman-Fried, despite the public muddle of Twitter’s fake account crisis this week.