#1192 Brady Dale | Reporter Exposes SBF’s Secrets

Brady Dale is a journalist at Axios, and the author of a brand new book "SBF: How The FTX Bankruptcy Unwound Crypto's Very Bad Good Guy." In this conversation, we talk about Sam Bankman-Fried, collapse of FTX, Three Arrows Capital, Terra Luna, and many other things that led up the situation we are in today. I really enjoyed talking to Brady, because he has done the work through interviewing people and doing the research. ======================= Pomp writes a daily letter to over 235,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. We have no advertisers on this podcast, so it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Brady Dale is a journalist at Axios and also the author of a brand new book titled SBF: How the FTX Bankruptcy Unwound Crypto's Very Bad Good Guy. In this conversation, we talk

• 0:45Anthony Pompliano?

  about Sam Bankman-Fried, the collapse of FTX, Three Arrows Capital, Terra Luna, and many of the things that led up to many of these situations. I really enjoyed talking to Brady because he's done the work. He's gone, he's interviewed people, he's done the research, and he had tons of insights around that story. Even me, who lived through all of these different moments, I learned a lot in reading the book and in talking to Brady. So here is my conversation with Brady Dale.

• 1:13Speaker 01

  The action's on the court, and as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to U.S. residents 21+. Begins on October 1st, 2026, and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 1:41Speaker 02

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 2:04Anthony Pompliano?

  All right, guys. Bang, bang. I'm super excited to talk to Brady. He's got a brand new book out called SBF: How the FTX Bankruptcy Unwound Crypto's Very Bad Good Guy. I've read the whole thing. Here's my proof of work. I got all my little notes and highlights, et cetera. Brady, I thought a great place to start is why write this book? Is it just the biggest story in finance, biggest story in crypto? Was it just you had a front row seat? Like, what drove you to write this and do it so quickly?

• 2:31Speaker 03

  Well, I mean, to be perfectly honest, it was Wiley's idea, the publisher. They wanted to do it. They thought it made sense to get a book out quickly on this topic, and they sought me out and asked me to do it. And I've always wanted to do books. But I think it's a great story. In fact, I, a part of the backstory of it is, I had already been thinking about a book that was related to Sam anyway. I had a book proposal I had written that hadn't gone anywhere for the sushi swap specific story, which is sort of I view as Sam's kind of debut as a leader in the crypto world. And so I had already done a ton of work on that. So that whole kind of middle part of the book that covers that was like largely ready. So I'd already been thinking about him as a character. And then when Wiley

• 3:15Speaker 03

  was like, we think this would be a good story to do. I was like, obviously, it would be a good story to do. So I agreed to do it.

• 3:20Anthony Pompliano?

  All right. So in the book, you turn the first draft into Wiley and December 30th, 2022, and then you basically get a chance to interview Sam. And you've got a quote in in the book that I thought was just fascinating. He basically says, in terms of facing the future, I think I'm just going to tell the truth and see what happens. And I certainly don't agree with the public narrative, but that's not for me to decide at the end of the day. I think like my biggest concern is that the incredibly toxic media environment will mean that there's no way for me to have a fair trial, and that no matter what happens, there will be too much political and public pressure to find me guilty, and that it won't matter what really happened. You've talked to him. You've done all the work, all this

• 3:59Anthony Pompliano?

  stuff. Does the truth matter in this story? Or is there already this kind of preconceived, hey, they broke the law, and they're all going to get in trouble? Like, how do you kind of get out of it? Because outside of law enforcement, you probably are one of the people who've done the most work on what exactly has happened here in order to be able to write a book about it?

• 4:19Speaker 03

  Yeah, I think the truth does matter. And, you know, one thing that's a bummer about doing a book is you can't hear the tone of his voice towards the end of that conversation. But

• 4:30Speaker 03

  I found him to be defiant when we talked, I think it was December 31st of last year. And one of the things, and I also quote him in saying this elsewhere in the book, is he says, you know, he didn't really think the government had real evidence against him, but as time has gone on, like particularly this additional charge that came out about the bribery in China, it does seem like they do have a decent amount of evidence and, you know, I'll be curious. I don't, I don't think he's going to take a plea at some point, but I think one of the things that really struck me is he thought he had a case, but it does seem as time goes on that there's more and more evidence that they really did do some pretty bad things. So I think the truth does matter, but I do think the truth is probably going to be on

• 5:15Speaker 03

  the side of the courts, but I mean, you know, or law enforcement, but we'll see.

• 5:19Anthony Pompliano?

  So in the book, you highlight this idea of like, basically Sam appears to have served a purpose that everyone was looking for. Everyone wanted to find the hero. Everyone wanted to find the person that was going to kind of save the world. And in it, you say Sam Bankman Fried offered a story that you wanted to believe. The talkative boy billionaire who would turn the wealth creation engine of cryptocurrency into a robber baron's war chest with which he could fix the world. And you go on to talk about Andrew Carnegie and how, you know, we, we put all of these people on a pedestal today, but actually they might've been doing some pretty bad shit when they were really kind of coming up and creating wealth. And then at the end of that chapter, you say, well, in fact, the lesson of SBF is this, the last thing anyone needs is a hero. And I thought that was so good in

• 6:02Anthony Pompliano?

  terms of, that might just be in life in general, but definitely in a crypto market where it seemed like he was able to capture this narrative. How much of that was intentional versus kind of the media just was looking and they found somebody and then they built this character out of nowhere and Sam didn't have that much to do with it?

• 6:22Speaker 03

  Well, I think it was a collaboration. I don't know if Sam set out to do it, but he certainly loved it once it got going, you know, and he played into it. I do think Sam loved the attention. I do think he loved this story about himself. I think Sam wanted to be the guy to save the world. And it wasn't just he wanted the world to be saved. He wanted himself to be the one who saved it. So I think all of those things are true. So I think Sam was complicit in building this story and really liked it that he was getting to take on that role.

• 6:55Anthony Pompliano?

  So that is from a mainstream media narrative, right? And obviously, we saw everyone write articles, magazine covers, conferences, like the whole thing. But then you had this one line in the book that just cracked me up. You said, "FTX's only real insurance on customer deposits was a meme." And I think what it really highlights here is this idea of like the mainstream media is what traditional finance is used to. They participate, they manipulate in some ways, they they hold back information, they feed it information, they do all that stuff. Crypto has the whole meme culture and Twitter and Telegram and like a whole almost like alternative universe of content and information that gets played out. And what you really are highlighting here is like, customer deposits and insurance

• 7:39Anthony Pompliano?

  are no laughing matter. Like, that's actually a very real concept in traditional finance. But when you mix it with crypto, this idea that like, maybe customer deposits were being held up by a meme? What do you mean by that?

• 7:50Speaker 03

  Well, it's just this idea that he that Sam had created this idea that he was smart and safe and you could trust him. But, you know, when you look at when you when you started to dig in more into FTX, one thing, one, you know, a lot of people, a lot of fingers are being pointed at CZ and Binance these days, for example. And look, I have no doubt that they've probably done some things that, you know, law enforcement wouldn't love that they did. But one real striking difference between the two of them, and I know people have critiques of this model, but Binance has been pretty upfront about which wallets are it's, you know, it's like, we'll publish all of our wallet addresses, we'll tell you, you know, we'll tell you what's there, have a look. And that inspires a certain amount

• 8:31Speaker 03

  of trust. And as I understand it, FTX has always been pretty hesitant about doing that, right? And yet, people were like, willing to trust them so much because he just had this whole vibe of being a smart, a smart guy. He was on the level, he was doing everything right. And people bought into that. So it was kind of just a meme.

• 8:49Anthony Pompliano?

  At one point, you said, he's a geek, but a geek with swagger. And I thought I had not heard anyone said it before. What do you mean by a geek with swagger?

• 8:58Speaker 03

  Well, I'm pushing back there on this idea that he also, I think, helped construct this idea that he was this dorky, a lot of people calling him autistic, you know, awkward guy, which I don't think is at all right. I think, you know, I don't know if you've ever talked to him. I have. He's a fun guy to talk to. He's got social skills. He's charming. You know, this is a guy who, who plays up sort of a geek is a person who has a very specific interest that not everyone is into, but it doesn't necessarily mean like they're like a nerd they use as a crutch. You know, he just has these specific interests. And so I think he actually was a lot cooler than people want to admit in his story. And he used this whole narrative of awkwardness to kind of protect himself.

• 9:42Speaker 03

  But the truth is, he was like the super confident person who, you know, wanted to be in charge of fixing the world. So that's what I mean by the swagger.

• 9:49Anthony Pompliano?

  So at one point, you talk about the Miami Heat arena deal, and you say the Heat deal had the scent of hubris. And you point out that about six weeks after that announcement, SBF said, it's been a pretty good year for us to the point where frankly, we don't need to rely on the full 19 years to have the funds for paying for the arena. And I thought the next paragraph of what you wrote in this book was like alarm system, you know, loud siren. You said, the Greeks wrote whole tragedies warning against this kind of talk. SBF would have probably called such cautionary tales irrational, and they might be, but they are also Lindy and they look pretty good right now. And so how much of this was just pure arrogance and hubris versus, you know, hey, we believe in ourselves and you kind of need that to be successful.

• 10:33Anthony Pompliano?

  And then shit kind of went sideways, but it's not necessarily because of arrogance and hubris.

• 10:39Speaker 03

  You know, that, that moment of the Miami Heat thing is an important one for me kind of personally, you know, I don't know that I could prove this to people. They could just be saying, I'm sort of telling a story to make myself look smarter later. But I can remember the day that that quote came out because I had been pretty into the Sam story and even was still at that point. But that was the first time that I was kind of personally, I was like, Bro, you're you're putting your name on an arena right now like this just does not it seems too early, you know, this just seems way too early. And you know, you've read the book, you know, that I have sources in there who say that kind of marked a moment where you started to get kind of celebrity hungry. And I think that's the moment where he got the taste of fame. And you know, it started to go to his head and we sort of see the repercussions of that later.

• 11:21Anthony Pompliano?

  So what I thought was interesting is like you call out these moments that you personally experienced or you you saw, you know, along the way. And I think you're like, pretty honest, you're like, hey, look, for a long time, like, I bought into the story and, you know, had a certain view. And then over time, I got more and more data and like my view changed. And obviously, there was kind of this big, you know, moment towards the end. But you said that in the start of 2022, SBF told you, my reading now, given what I know now, which is still not everything, is that basically, there's some number of black swans that would necessary that would be necessary to blow out Alameda. And like, that number was slowly decreased over the course of the year. And so when I read that, it's like 21 was this amazing year for investors across all asset

• 12:03Anthony Pompliano?

  classes, crypto specifically, right? We hit all time high in Bitcoin and many other asset prices. Hedge funds were literally just like printing money. They were returning and distributing and all this stuff. And so when you take the Miami Heat Arena, the celebrity hungry stuff, and then you add in the performance, like, it's easy to see how you start to believe that like, you actually are really, really good at playing this game. 2022 happens. And when there's a drawdown, you know, the famous Warren Buffett quote of like, when the water goes out, you see, you know, who's naked. And there were definitely the moments of lunaterra, etc., that kind of put increased pressure. But is it actually something where like, 21 created the exposure that took them down in 22, in your opinion? Or do you think that there was like, specific things they made, decisions they made in 2022 that actually was the undoing?

• 12:49Speaker 03

  Well, the thing you have to understand about Sam, I don't I don't know that I have a great answer to that question. I mean, it's just speculation. But I do think one of the things I came to understand about Sam was he had this viewpoint that FTX needed to get huge as fast as humanly possible. So it could it could have a moat around it that no one could beat. And I think

• 13:16Speaker 03

  I think they had a culture where they had gotten very big in 21 and they were like, well, we need to make a few more really big bets so that no one can ever overtake us. I think they were hungry to like overtake Binance or something like that to be the biggest. And so I think where it might have been smart to be like, wow, this is really blown up. This really looks like the top. We should start cashing out and planning for a winter. They were like, no, we can get a few more wins in here. Like, I'm pretty sure, you know, I think, I'm pretty sure they were, I don't know for sure, but I'm pretty sure they played Terra. I'm pretty sure they played the, um, that crazy DeFi thing that, um, I mentioned in the book, the name is alluding to me right now, but that happened in January. That was kind of the first

• 13:57Speaker 03

  blow up of 2022 that people don't talk about as much. The really weird, it was the om fork on, on Avalanche. I think they were in there. So I think they were going for a few final big swings to cement themselves to the top. And, and here, and this is one of the parts of the story that I am most confused about with Sam, because you know, you and I have both been around for a minute, right? So we both have some appreciation for like, things go up and then they really go down and you have to do things differently in those times. I mean, I'm not an investor, but I still, you know, I get this, you know, I see what happens, right? What's confusing about Sam is he was there for 2018 too. You know, he started in 2017. So this is what I'm confused about with him. It's just like, I feel like those of us who went through 2017 and 2018 kind of know how to read the tea leaves. It's just

• 14:41Speaker 03

  like, okay, it's time to cash out now. It's time to start going careful. For whatever crazy reason, they didn't, you know, he, I don't know, he thought this time is different or what. But, um, yeah, I think that was it. They wanted, they wanted to overtake Binance and, um, and staying second place through Crypto Winter wasn't an option. And Sam has said this, you know, and I quote him in the 80,000 Hours podcast, for example, saying this, he was always willing to bet the farm. He was always willing to take that double or nothing bet to go even bigger or lose everything, um, which I think was fine until he launched FTX and it was no longer just his money he was playing with. It was no longer just house money playing with. He started playing with everyone else's money too.

• 15:21Anthony Pompliano?

  How much of it, you mentioned in, in the book, Suzu talks about kind of the super cycle. And institutional participation means it's different this time. There's not going to be this big drawdown. Do you think that Sam just kind of bought into similar thinking, whether it was that specific theory or something like that? And that's why he played it differently? Or do you think that it was just missed, you know, market timing? There's plenty of people who are professional investors who just miss it, right? They think it's going higher or going longer or whatever, and it ends up actually crashing before they can get out?

• 15:50Speaker 03

  I don't know. I think, I do think, and everybody sort of told me, all my various sources told me, some I reported on, some I didn't, you know, some were people who didn't want to, you know, be included in the book, but still kind of talk to me a little bit. A lot of people tell me that when you interacted with the Alameda crew and the FTX crew, there definitely was this whole vibe of we're the smartest kids in the room kind of thing. And I wonder if kind of they bought their own nonsense that like, we can always win and we can always come out on top. And that's certainly what it kind of looks like, you know, with them like doubling down in mid 2022 and like buying every company in sight. It certainly made it look like they could always find a way to get out.

• 16:33Anthony Pompliano?

  So talking about being overly honest, you have a section in the book where you basically rehash what Do Kwon said on my podcast, which I took a lot of shit for. People were very pissed that he came on the podcast, that I was even willing to talk to him, etc. And my thought process at the time was like, this is the biggest buyer of Bitcoin in the world at the moment. How are we not going to talk to him about what he's doing with Bitcoin, right? And so what you say in the book is, you know, he talks about the purchase of Bitcoin. He was frank about the risk. Terra needed Bitcoin as an extra defense, he explained. And then later on, you say this was the death spiral that everyone knew was the chief risk in a design like Terra's. And Do Kwon explained it

• 17:13Anthony Pompliano?

  too pomp, without any spin, he just said it. And so what I always think about is like, if you go and you interview a big hedge fund manager in the traditional financial world, they ain't saying shit. They got their talking points, they're sticking to it, right? You can ask them anything. What's colors the sky? They'll tell you about how we have, you know, a risk mitigated investment strategy for long-term hold, blah, blah, whatever. Crypto is not like that. I mean, to see Do Kwon literally almost call his shot on, hey, if it works, this is what's going to happen. If it doesn't work, it'll be for this reason and everything will blow up, is shocking in hindsight, which I think you're kind of calling out here in the book. Explain a little bit more as you see that now with the hindsight bias, like how you read into that.

• 17:55Speaker 01

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• 18:23Speaker 03

  Well, I mean, I think, I think the way I understand that is, you know, I know Doe kind of well. I mean, we've never met in person, but we've talked a bunch of times. I think I got a handle on his vibe.

• 18:40Speaker 03

  And I read it at the time as a flex, you know, like him saying like, "I will just admit what the biggest risk is and I think I can mitigate that risk and get around it because I'm so smart and clever." And I also think he really thought that he had done a very smart thing by buying all this Bitcoin as a bulwark. I think he thought it was, I mean, it turned out it was like a, it was a bunch of tissue paper, you know, we learned it did, it did nothing as that, as the spiral happened. But I think he thought that that was a really smart move and that would also, you know, get people behind him. So my read of that in retrospect is it was a flex.

• 19:21Speaker 03

  It was an expression of confidence, you know, it was like, be honest to show that you think you can still get through it. And then in retrospect, you're just like, well, I guess it was hubris then.

• 19:32Anthony Pompliano?

  So what's so interesting is during that blow up of Terra Luna, Three Arrows Capital obviously came under immense stress and you said, "At the time, Three Arrows Capital's fall looked like Sampson defeated, but once FTX crumbled in November, 3AC looked like a different metaphor. The canary in the coal mine." And so it seems like now actually, maybe that one event is really what kicked off all the contagion. And yes, some of the things that happened later in 2022 obviously had an effect, but really most of the trouble that started for many of these companies, funds, et cetera, was really Terra Luna going down, not the things that happened later in the year. Those were just kind of the final punch that knocked out, you know, some of the firms. Is that, is that an accurate read?

• 20:14Speaker 03

  Well, I think that's an accurate read. I mean, I also think another way to look at all of it is... If you're in crypto for a minute, you should know that until this stuff becomes mainstream, we're going to have a series of wild rides up and you should probably get out before the big rides up ends and then go conservative. And a bunch of people didn't. I mean, you know Bitcoin, I mean, we all know that Bitcoin is what marks the height of this market. By the time Terra fell apart, it had been six months since Bitcoin's all time high. Like, you're insane to still be playing hard six months after the Bitcoin's all time high

• 20:54Speaker 03

  in a crypto market, you know? So I think, yes, I think Terra is a crucial part of it, but I think another crucial part of it is just, we know that this thing has cycles. The cycle was clearly over. Why are people still swinging for the fences?

• 21:07Anthony Pompliano?

  So that's interesting because in another part of the book, you talk about Pierre Rochard's tweet. And Pierre's been around for a long time in the Bitcoin world. And he tweeted out the following. He said, "Easiest prediction I'll ever make." What a hot start to a tweet. "Easiest prediction I'll ever make. Fiat-brained bozos. Try fractional reserve banking with Bitcoin and get wrecked. SBF fancies himself to be a savvy JP Morgan. Bails out the bozos." He puts in parentheses, "You are here." Then he says, "Which only encourages more bad risk-taking. SBF needs a bailout, but you can't print Bitcoin." In hindsight, Pierre looks like Nostradamus, right?

• 21:49Speaker 03

  Yep.

• 21:49Anthony Pompliano?

  Were the Bitcoiners right? Was everything else bullshit? And Sam, etc., was just playing a game that was unwinnable? Or was it a case of bad risk-taking? And actually, there is, you know, some degree of truth to the things they were trying to invest in or value created there. And it's more so bad risk-taking than it is just like Bitcoin is the thing and everything else is nonsense, as if, you know, what I think Pierre would argue.

• 22:16Speaker 03

  Yeah, I don't quite agree with Pierre on that. You know, I think there's good things. You know, if you look at my coverage, I cover all kinds of things in the crypto world. I think a lot of is interesting. You know, I mean, on the flip side, one thing I'd point out is, for example, a lot of crypto lenders blew up, but none of the DeFi lenders did. You know, they all had some big liquidations, but it was all orderly. You know, there was just like, yep, a bunch of money came out, you know, nobody, there was no defaults, you know, went fine, you know. So I think, I think there's some plenty of good things out there in the crypto world on the ongoing slow build of this new industry. But we both know it's all prone to irrational exuberance and people getting too excited. And even Bitcoin is prone to that, right? I mean,

• 22:58Speaker 03

  Bitcoin goes up above where it should really be, and it falls back down, you know, kind of always each time higher than the last level of irrational exuberance. So obviously, there's a real build of wealth happening there, a real build of value happening. So I think it's a mix of both, but I'm still very impressed by Pierre's call. You know, I missed that at the time. I found, I found that in my research later, but I was just like, this guy definitely deserves credit for this call. This is amazing, you know?

• 23:22Anthony Pompliano?

  It was absolutely insane. Talk about what happened after FTX blew up. What's kind of your read? So FTX freezes withdrawals, and there's a period of, I think it was like nine, 10 days. People on the internet are going wild. There are folks flying there, both investors in FTX, people who were not happy with FTX. There's all sorts of speculation and debate. There was a hack that happened and some of the funds got drained. Like, talk a little bit as you did work in terms of, okay, the blow up happens. What were those nine or 10 days like?

• 23:55Speaker 03

  Well, the weirdest thing about a lot of those days is something happened that had never happened before. Sam went silent, you know? And that's one of the things which Nathaniel Whittmore really talks about on his, on his podcast afterwards, once it's all said and done, and FTX has gone, and FTX has gone into bankruptcy, is just that, like, everybody was like, what the hell, for the first time ever, our, our CEO who won't shut up is not saying anything. And that was a real source of concern to lots of people and you know I've got sources in there who are inside the company and who were just like you know look if Alameda goes under that's no big deal they're just one market maker you know in the company where we are

• 24:38Speaker 03

  we're resilient against that we got multiple market makers it should it should be no problem and then more and more it becomes clear that like no there is a very big problem and then it looks like there's a giant hole in the balance sheet so yeah I mean I think almost immediately became clear that something was wrong because Sam always had something to say about everything and all of a sudden he wasn't talking and then eventually you know they declared bad well they tried to sell a Binance which was out of control and then and then when Binance didn't want to buy they declared bankruptcy it's wild.

• 25:07Anthony Pompliano?

  Do you think CZ sleight of hand it and knew he wasn't gonna buy it but kind of cut off all of their options or do you think that that was you know kind of in the moment everyone's trying to figure it out?

• 25:18Speaker 03

  Um, my colleague Dan Primack at Axios uh reported some reporting on this a little bit at the time and you know who knows it's all just impair it it's all just um it's all just opinions and things like that but his sources at the time told him that what CZ believed he was doing was inflicting a little pain on a rival who'd been kind of a jerk and it turned out that there was way more there than even he suspected so I think CZ was trying to slap Sam on the wrist I don't I don't really think he thought he could sink the company with a tweet

• 25:52Speaker 03

  it just turned out that there were much bigger issues going on there than anyone realized and that's what happened so I don't really I I think I think CZ wanted to hurt them he was just like if I sold a bunch of FTT right now that would not be good for them and I never do this so everyone will notice it and then it just turned out there was a much bigger weakness there than anyone suspected.

• 26:12Anthony Pompliano?

  So you talk about towards the end of the book uh SBF's uh maybe public communication strategy and you say in late November and early December SBF would not leave the public eye he was in magazines he was in the New York Times he was doing interviews on YouTube he was on Twitter Spaces and then you list a ton of people who interviewed him you talk about the fact that he goes to various conferences including uh there's a recording of a phone call with Tiffany Fong there's the New York Times Dealbook Summit Good Morning America New York Magazine the Scoop Podcast uh Axios interviews etc. Is that like a strategy? Is that just like, I'm gonna wing it? What's going on there? Cause I don't see very many people when they're in this type of, you know,

• 26:54Anthony Pompliano?

  hot water and scrutiny being like, let me jump on Twitter spaces and just like, anyone can ask me any questions. Let me go on, you know, Coffeezilla and let him just ask me whatever he wants. Like, that's a very unique strategy.

• 27:07Speaker 03

  It is a unique strategy. You know, there are those out there who think he had like Samurai level PR people who were telling him to do this to like, you know, flood the public consciousness and believe that there was some chance that he was gonna get away with all he did because of that. I don't think that's true. You know, I think that was Sam being Sam. My least charitable read of it is he believed he was about to lose the public eye for good and he was gonna have his last few tastes of fame, you know, cause he enjoyed that attention. My most charitable read of it is he thought he could, you know, kind of like Do Kwon telling you, this is how my, this is how my project falls apart.

• 27:51Speaker 03

  He thought by maximizing honesty, he could convince the world that he was innocent. So, but I really, if you had, if you made me make a bet, I would say it was the former. I think he was addicted to the attention and couldn't get himself to stop and didn't have people around who knew how to tell him no yet. And so he just took all the attention he could get because he thought he might never get it again.

• 28:14Anthony Pompliano?

  So you also talk about some of the investors. You say FTX list of investors span powerful and well-known investment firms. I'm sorry, this is New York Times writing this. FTX's list of investors spans powerful and well-known investment firms. NEA, IVP, Iconic, Third Point, Tiger Global, Altimer, Lux Capital, Mayfield, Insight, Sequoia, SoftBank, Lightspeed, right? I mean, just go through the line. There's a ton, BlackRock, Temesic, et cetera. What, what do they all think now? Do you have any sense in terms of, you know, is this just a case of fraud? And fraud happens in every market? And if somebody says they're doing one thing, if their auditors are tricked, their regulators are tricked, then, you know, we shouldn't expect investors to be able to uncover this? Or is there a little bit of, you know, kind of egg on people's faces?

• 28:58Anthony Pompliano?

  And maybe it's a different story?

• 29:01Speaker 03

  Well, I, Pom, I gotta turn this question back to you on some level, because you're an actual investor, and I'm curious about this. My, as someone who's not an investor, who's never been in any of the rooms of any of these things, I don't really know. My read is the way these things work in a hot market, when startups start to be in the driver's seat, they get to start sort of lowering standards, lowering standards, and the hotter a startup is, the more demands they can make of investors. I mean, is that, is that, this is my guess. I mean, do you know? Like, do you see your peers doing this? Are you like, how the hell did you sign this term sheet at this point? Like, does that happen?

• 29:38Anthony Pompliano?

  I think that there is a laundry list of situations that we saw over the last two or three years that exact situation played out. I will say that sometimes it's a negative, right, in terms of when there's no board of directors, there's no diligence, like those types of things, that's obviously not good. This is an example of what can happen in those scenarios. There's also a lot of different examples where people took money off the table or whatever, and like, the businesses worked, right? And so like, in some weird way, I think that investors, especially when they start out, I was like this early in kind of my investing career, is like, I want to invest in companies and I want to be really helpful, right? And it's like, yeah, that's great. Okay, cool. That makes you feel good because you're helpful,

• 30:22Anthony Pompliano?

  and maybe you're actually helping, or maybe you're not, you learn, right? But what you find over time is like, the best companies don't need your help, right? Maybe they need advice every once in a while, or they need a specific introduction or whatever. It's not like they don't ever talk to the investors, but it's like, when something's working, it's going to be very hard for outside investors, especially the smaller investors in the rounds, to have any material impact on the business, right? And so in some way, it's like this like, self-selection thing, where you want to invest in the companies that don't need your help. And so naturally, what that means then is like, you kind of are asking them permission to invest in the company. And so a lot of these firms, if there's a bunch of competition, to your point, then you can lower the standard because there's so much demand. I actually don't know if it matters whether you're an individual angel investor,

• 31:06Anthony Pompliano?

  or you're a very large firm. Like, in some way, you may just come to the conclusion like, hey, we don't want to break any glass, we're not going to get invited to invest in the company, right? And so you get this kind of weird thing. What I also think, though, is if somebody says, send me your audited financials, and they're sent, and for some reason, they end up not being true... It's kind of hard, you know, or is the expectation that every single investor is going to go and check the auditor's work to make sure that the financials that were audited and approved, you know, are actually factual. Maybe, right? I don't want to say never, but I think that the point of having the auditor is that the auditor is supposed to be the one that is able to sign

• 31:48Anthony Pompliano?

  off on it. So if they get tricked, it's kind of hard for other people to do it. And you can extrapolate this from the private markets, the public markets. I think that's the other thing, right? Is audited financials, there are rules if you submit financials that are inaccurate, right? But at the end of the day, even public hedge fund investors evaluating public companies, how many of them have the ability, let alone have the desire, but the ability to actually go and underwrite some of this stuff outside of what the auditor is saying, or what a regulator is saying. And so, you know, it's kind of like in a bad situation, like, oh, people should do more diligence. 100% agree that that is definitely something that has to play out in these bull markets. But, you know, somebody on Twitter was yelling at me one time, and they were like,

• 32:30Anthony Pompliano?

  how did you not know? I was like, well, what questions, you know, would I ask? Right? And I wasn't an investor, but, but we had worked with their US-based entity. And he was like, you should have asked if they were taking all of the crypto assets, siphoning it into Alameda, and then making leveraged risky bets with customer funds. I said, okay, if I had asked them that, and they said, no, then what? Right? And like, in some way, that's kind of what people saw in the terms of service and some of these businesses. Some businesses say, hey, we're doing X with the funds. Other businesses say we're doing Y with the funds. That's why it's written there. What's in what is unique or interesting about this case is it appears, at least what's been reported, that what the doc said, they were doing something different. And so, again,

• 33:13Anthony Pompliano?

  you know, who uncovers that? In some way, you know, this is a case of the free market uncovered Right. The market dynamics were able to identify and expose this faster than any of the kind of fail safes or safety nets that we put in place in terms of regulation, auditing, et cetera. And like, whether that's good or bad, I'm not really sure. But like, that just seems to be what happened, right?

• 33:36Speaker 03

  Yeah. Yeah. You know, yeah, I think, I think that's right. And I don't, I don't really know what the clear solution is. You know, people are doing this proof of reserves thing right now. Obviously, that is not perfect, you know. But what else are you going to do? You know, there are, to me, there are other red flags. Like, I could get this wrong. So, you know, we can issue a correctionary or whatever. My quote here is wrong. But I do think that this is, this is what it said. In that crazy kind of profile that Sequoia put out about SPF, right? Which I mentioned a couple of times in the story, and everyone talked about when it came out. It was just this, remember that glowing profile they put up on his site? They hired this ex journalist to, you know, write of him. There was a line

• 34:15Speaker 03

  in that where I was just like, how can this possibly make sense? It's in the part of where he's doing the staff meeting. And it might have been a smaller number than this. But I think what it was, he said, he was, he was like, look, guys, we're going to have to rein in our spending a little bit. If there's expenditures over a hun, I swear to God, the number was $100 million put it in there. If it's over $100 million, you're going to have to get preapproval from some managers. Otherwise, you know, good to go. And I was like, even if they raised $4 billion, right? Which I think, you know, was the amount they raised, right? $100 million is still a significant portion of $4 billion. Like, how is, how is that the number that you have to have approvals above? And how did Sequoia

• 35:00Speaker 03

  print that story and not go, wait, 100? You know, like, even if it was, even if I'm exaggerating by 10, even if it was 10 million, I think it was 100 million. You know, we could check. But that still seemed like, I know, whatever the number was, as I read it, I was like, that's a crazy number. How are the investors not like, more concerned about that? You know? There were other red flags, I feel like, but um, yeah, who knows?

• 35:21Anthony Pompliano?

  It also is um, one of these situations where it's so easy in hindsight to put them all together, right? But to your point, like, even the people who are experts along the way are, okay, maybe there's one thing that's a little weird, this little weird, whatever, but like, it's very hard to kind of find this stuff. And I've got a friend who I recently was having lunch with, and I said to him, you know, what other ones are hiding in plain sight? And we started talking about, you know, what are the things that uh, could potentially be, whether they're fraudulent, uh, they're not what they say they are, uh, maybe they're not going to be as successful as people think they are, for whatever reason, you know, we're going through kind of a bunch of brainstorming

• 36:01Anthony Pompliano?

  of these things. And he said to me, no, actually, I start my list not with what are the riskiest things, or the things that people are suspecting. I start my list with the things that everyone thinks is the safest. I start my list with the thing of that everyone trusts. And I thought it was just a really like, like, yes, like, that is a great way to to kind of compile a list, right? Is actually like, what are the things that no one questions that actually may have have an issue if you kind of think about it. And so I tend to think, um, you know, when when there's trust, even if you have decentralization, even if you have kind of all the the merits of uh, what the industry provides, like, there is still a level of trust, right? And I think that that is something that doesn't get talked a lot about, is whether you trust a company,

• 36:46Anthony Pompliano?

  whether you trust a decentralized, uh, you know, platform, whether you're literally just trusting the fact that the information you're looking at is accurate, right? I always ask people, you know, hey, how many uh, how many Bitcoin uh, are in circulation? And they'll say a number, and I say, okay, cool. Did you read that on a website? Or did you actually go run a node and and check? And a lot of people will just look at the website, even though they have the ability to go check, right? And like, guess what? Like, it takes a little bit longer, it requires you to do a little bit more work, like, there's all these things as to why people won't do it. But even when you can 100,000% check to make sure that the number you're looking at is accurate, most people still just go look at the website. And so you there you introduce trust and, you

• 37:27Anthony Pompliano?

  know, kind of this reliance on a third party, um, which, again, Bitcoin promises not to have to, you know, rely on. But I think people will still do it, even if it's available to go run the node and figure it out for yourself.

• 37:40Speaker 01

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• 38:08Speaker 03

  Yeah, well, so I want to circle back to this, how you could know in advance, but on that, on that score, um, you know, one of the things I always feel like a bit of a jerk about every time there's a big blow up in crypto, and I do think this is, does make me kind of a jerk, but also I do think it's sort of right, is like you'll see a lot of these mainstream media stories that they'll talk about people who lost everything, you know, when the blow up happens, and there'll be these cases of people like, I had my entire life savings in like whatever coin or whatever thing and it like lost all this and I've lost all of it. And that really sucks and I feel bad for that person, but I'm also just like, if you were in this space at all and you were listening to any of the responsible long-term people in here, I guarantee you they were all saying, don't go all in on anything.

• 38:51Speaker 03

  You know, like they all say that again and again and again, like you, I am, you know, I know you're the biggest Bitcoin fan on the planet. You wouldn't tell anybody to put 100% of their, of their capital into Bitcoin, I don't think. Am I right?

• 39:03Anthony Pompliano?

  I'll take it even a step further. When a lot of this stuff blew up, there were people who were yelling and screaming at me on the internet. They were so mad, right? Um, uh, the US-based FTX thing, uh, BlockFi, et cetera. And I was sitting there and I was like, through 2017, 2018, I was one of the biggest anti-ICO people in the whole world. I literally was just saying like, I think this is all bullshit. I think that the SEC is going to step in, whatever. Took a while, but like here they are, right? Uh, the second thing is, uh, I was the person who, uh, popularized the idea of get off zero, like literally go from zero to like a dollar, go from a zero to, you know, a hundred dollars, whatever. And then the third thing was, people used to get mad at me in the bull market when I would say on national television or anything, you know, I don't know, maybe most people are putting one to

• 39:49Anthony Pompliano?

  5% of their portfolio into this and people be like, how could you not tell them to put more like, you know, the dollar is going to zero, whatever. When we get to the bear market, it's like it's your fault. Everyone lost savings. And I used to sit there and just be like, the, the two things can't be true, right? Like they can't both be true. And, and I, I think I share your sentiment of like, I feel bad for anyone who is harmed in any market when things go down. I mean, we now are seeing, obviously, you know, people who took out adjustable rate mortgages and the Fed hikes interest rates. And now all of a sudden their mortgage payment triples. But again, at some point, we have to have this idea of like self reliance and self responsibility as well. Right? And so it, it doesn't completely excuse everyone's behavior, right? Because obviously people have a responsibility when

• 40:32Anthony Pompliano?

  they have a platform, all this type of stuff. But I do think there's this very weird dynamic where because of the way that attention works, the most egregious extreme stories are the ones that get pushed the hardest. And so to your point, the like person who took a hundred thousand dollars that they had to their name and put it all into an obscure crypto coin. There's a lot to unpack there. And it's not just like, hey, the coin went down. And so the people who made the coin are bad.

• 40:57Speaker 03

  Right, right. So I want to circle back to this idea of could we have foreseen it? You know, for folks, I, you know, hopefully your listeners pick up the book and have a look. One of the things about how the book works is it goes all the way to the back to the beginning of Sam in crypto up to when, you know, the end of last year. And one of the things I do think as I revisited that story, and again, I wasn't smart enough to see this in the time, at the time, but there is a way and, and, and, you know, you know, as having read the book, one of the themes of the book kind of is just sort of, I have all this sort of like spiritual language, like you read one of the things in there about the Greek tragedies and things. And I sort of, I sort of come back to like, you know, the gods don't like it when you do this, like that kind of thing, a variety of times. And a part of the reason why I did, I, I like that kind of language, but I also did it because

• 41:40Speaker 03

  when you look back over the year, there are some other ways in which it was almost like the universe was making warnings. So two examples that I have in the book in there are cream finance and mango and mango markets, both of which were instances where, where, well, cream finance was a case where the community pushed back against Sam making gigantic bets against FTT using the platform. They were just like, we're going to put some brakes on this. You know, that was a community realizing that you shouldn't go all in an FTT. So on some level, I, I saw that as kind of a warning to the world about, about the story. And then mango markets was like, Almost exactly the same thing as what happened a month and a half later with FTX.

• 42:20Speaker 03

  You know, Mango Markets was this decentralized exchange on Solana that allowed people to make bets against its native currency, which was Mango, which was obviously a tiny, tiny currency that was thinly traded. And you know, this guy of Abraham Eisenberg, you know, pulled this hustle where he made the price of Mango go up really high, borrowed all of the capital that was on their credit thing and just walked away from it, let his loan go bad. And it was just like, and of course, Sam went on to Twitter afterwards and talked about how like they had poor safety measures on Mango and FTX had much better safety measures. But I'm looking at that story and I'm just like, wow, this is a story about an exchange that let you take out excess collateral

• 43:02Speaker 03

  against its native token, you know, can we think of another exchange that did the same thing? Oh, right, FTX did, you know? So it's like, the universe does on some level provide warnings of these things. You've just got to be, you've just got to be paying attention to when it gives the warnings. And so those stories are in the book and that's why they're in there.

• 43:20Anthony Pompliano?

  I think that that makes a ton of sense. The book is called SBF, How the FTX Bankruptcy Unwound Crypto's Very Bad Good Guy, which is a fucking amazing title. Where can we send people to find the book?

• 43:32Speaker 03

  Well, definitely go to your local bookshop and ask them to order it. Tell them you'd be excited for them to have lots of copies there. Obviously it's up on Amazon already, you can order it from there. Also, bookshop.org if you want to order it from a, you know, a local bookshop that way. But yeah, I mean, the best thing folks could do is go to their local bookshop and be like, hey, I can't wait for this book to come in. You should have tons and tons of copies. That would be fantastic.

• 43:52Anthony Pompliano?

  I think that is a great thing. I've had a lot of authors come on here, no one has ever said that, so you know what you're doing, which I appreciate. Brady, where can we send people to find you on Twitter? And if they want to follow up after this, ask questions, whatever, where should they do that?

• 44:06Speaker 03

  Yeah, I'm at BradyDale on Twitter. Also, would love for folks to search Axios Cryptocurrency and subscribe to our newsletter. We put a newsletter out every single day, me and my colleague, Crystal Kim. I think it's pretty good. I think folks will like that. So yeah, the Twitter and my Axios newsletter would both be great.

• 44:23Anthony Pompliano?

  Amazing. Brady, I always enjoy talking to you. The book was fantastic. I don't think that I've ever read a book about something that I like lived through and was like, oh yeah, there's a bunch in here that I didn't know even as it was going on. So I appreciate all the hard work it goes into writing this and I hope that people go pick it up. SBF, How the FTX Bankruptcy Unwound, Crypto's Very Bad Good Guy. For those that are watching on YouTube, yes, I have the spiral bound version, which just means that I got to look at it before you, but you should go buy it because it's awesome. Brady, thank you so much. We will definitely do this again in the future.

• 44:59Speaker 03

  Thanks, Matt.