The recent arrest of Samuel Bankman-Fried should come as no surprise to those who have been following the tattered case from the failed crypto exchange FTX rich man.
“SBF,” who became widely known as an eccentric and soft-spoken CEO, was arrested in the Bahamas following an indictment by the Southern District of New York prosecutor. The Securities and Exchange Commission is reportedly filing additional charges for alleged “securities law violations.”
While the indictment is sealed, the New York Times and other news outlets report that SBF faces charges including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. .
Get ready for a wild ride.
The SBF story will probably be discussed in the press for months, if not years to come. Ultimately, the cryptocurrency ecosystem, which was ostensibly very attractive to many investors due to its lack of regulation, has become a key reason why financial oversight and protection is sorely needed on a massive scale. is showing.
Almost overnight, SBF became an outcast from crypto celebrity status and media darling. After filing for bankruptcy by bankruptcy, it had a staggering downfall. Since FTX’s bankruptcy, at least one million depositors have lost access to their funds.
One of the strangest twists is the incredibly dangerous PR strategy employed by SBF. Before the meltdown, SBF described himself as the smartest person in the room. He enjoyed derogatory press coverage that typically presented him as brilliant, innovative, altruistic, and generous. He was a supporter of progressive causes, donated to the press, and spoke publicly about the important role of press freedom. , seemed to be trying to buy positive press.
In the days following the collapse of FTX, SBF must have known that it was only a matter of time before the federal government shut down and that he was in handcuffs. But in the days until the U.S. government takes him into custody, the SBF will focus on his highly risky PR efforts, which may come back to haunt him.
Jumping from interview to interview, his goal was to garner public attention as a naive ingenuity who didn’t know there was trouble brewing within his cryptocurrency empire. Instead of being extremely vigilant, SBF seems to have engaged the press and calculated snow jobs, knowing full well that it could be used against him. from a brilliant prodigy and sage to a naive newbie who didn’t really understand what went wrong.
The audacity and irony of such a strategy are striking. The pattern of facts is not exactly the same, but the comparison between SBF and Theranos CEO Elizabeth Holmes is instructive.
- Both situations involve charismatic CEOs known as genius innovators at the tip of the spear.
- Both principals appeared to be thriving in the public eye, seemingly knowing full well that they were involved in activities and behaviors that did not match the squeaky clean image they were trying to present. .
- Forged relationships with journalists and pandered to highly respected institutions.
- Both CEOs were arrested and charged with fraud.
When the mystique surrounding Theranos begins to crumble and Holmes finds herself transformed from media darling to suspected con artist, she wisely chooses to shut down the PR machine. . She stopped giving interviews and almost disappeared.
By the time her trial finally turned around, Holmes was married and pregnant with her first child. Rather than being a ring entrepreneur, she became a taciturn matron.
Perhaps SBF studied Holmes’ fall. If so, he may have concluded that staying silent didn’t do her any good after all.
We probably haven’t heard the last story from him. He might be bold enough to continue the interview even as his bills pile up.
His lawyers will probably be against it, but he may be confident he can talk a way out of his current predicament.
If I were to give him advice, it would be to get off the mic and start preparing your long-term strategy. Ensure that key mitigation information reaches outlets that can disseminate and amplify it. Try to talk about systemic failure, not about one person’s responsibility. In the meantime, please take concrete actions to show goodwill, clear up confusion, and provide any help you can to pay back your losing investors.
Continuing to seek the public spotlight would prove dangerously attractive to a young man who showed a tendency to bet big on himself and seemed unafraid to take big risks.
Evan Nierman is the CEO of a crisis PR firm red banyan He is also the author of Crisis Avoidance: PR Strategies to Protect Your Reputation and Revenue.