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 had never trusted to SBF, who stepped down as CEO of FTX on Friday when the company filed for Chapter 11 bankruptcy.
Bankman-Fried contacted Musk in March through their intermediaries (in SBF’s case, that was William MacAskill of FTX’s Future Fund philanthropy arm, which closed on Friday) to express interest. to invest in Musk’s offering on Twitter. This news came out in September when Musk’s text messages were leaked in a legal 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 talk about the potential for ” social media blockchain integration”.
Musk asked Grimes, “Does Sam actually have $3 billion in cash?”
On Friday evening, as Crypto Twitter continued to have a field day to recirculate the recent story involving SBF, a popular account that shares internal tech industry emails tweeted the exchange again. Musk replied, “Precise. He triggered my bs detector, that’s why I didn’t think he had $3 billion.”
Grimes had spoken about Bankman-Fried’s offer to Musk, texting, “He’s in you…I believe you’ll like him. Ultra genius and actor builder like your formula. Built FTX from the ground up after MIT physics.”
Bankman-Fried was interested in helping design a blockchain version of Twitter. Musk, despite being a crypto advocate, rejected that proposal, telling Grimes in a matter-of-fact tone, “Blockchain twitter is not possible.” He added that he would only meet with SBF “as long as I don’t have to have 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 malfeasance of FTX – which used client funds and its own FTT token to back SBF’s Alameda hedge fund – everyone is eager to distance themselves from the stench.
On October 27, Musk took over Twitter.
The next two weeks saw FTX go up in flames after Changpeng “CZ” Zhao, CEO of rival exchange Binance, announced that his company would be liquidating its holdings in FTX’s FTT token. This drove down the price of FTT and prompted $5 billion in withdrawals from FTX customers, who did not have the cash to cover.
Musk, even through the public mayhem of Twitter’s fake Twitter account crisis this week, certainly had a better week than Bankman-Fried.
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