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 through their brokers in March (in SBF’s case, it was William MacAskill of the philanthropic arm of FTX’s Future Fund, which shut down Friday) to express his interest in investing in Musk’s bid for Twitter. That news came out in September when Musk’s text messages were leaked through legal proceedings.
Musk’s banker on the Twitter deal, Michael Grimes of Morgan Stanley, told Musk at the time that SBF offered “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 $3 billion worth of liquid?”
On Friday night, as Crypto Twitter continued to have a field day recirculating recent history with SBF, a popular account that shares internal emails from the tech industry re-tweeted the exchange. Musk replied, “Accurate. He turned off my bs detector, which is why I didn’t think he had $3 billion.”
Grimes had talked off Bankman-Fried’s offer to Musk and texted, “He likes you…I really believe you’ll like him. Ultra genius and doer-builder like your formula. FTX built from scratch after MIT- physics.”
Bankman-Fried was interested in helping develop a blockchain version of Twitter. Musk, despite being a supporter of crypto, shot down that proposal, telling Grimes matter-of-factly, “Blockchain twitter is not possible.” He added that he would only meet SBF “as long as I don’t have to engage in a tedious blockchain debate.”
Grimes told Musk that even without the blockchain component, Bankman-Fried wanted to invest. Musk passed.
Of course, in light of the behind-the-scenes financial malpractice at FTX — which used client money and its own FTT token to prop up SBF’s hedge fund Alameda — everyone naturally wants to distance themselves from the stench.
On October 27, Musk took control of Twitter.
For the next two weeks, FTX went up in flames after Changpeng “CZ” Zhao, CEO of rival exchange Binance, announced that his company would liquidate its holdings of FTX’s FTT token. That drove the price of FTT down and led to $5 billion in withdrawals from customers of FTX, who lacked the liquidity to cover.
Musk certainly had a better week than Bankman-Fried, despite the public mess of Twitter’s fake account crisis this week.