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Two Sides of the Same Con


DONALD TRUMP AND SAM BANKMAN-FRIED PULLED THE SAME TRIAL TRICKS

They may not be dead ringers. But from watching SBF’s courtroom shenanigans up
close, they looked awfully similar.

By Ashley Valdez

November 8, 2023
Photos from Getty Images.
Save this storySave
Save this storySave

Thursday night, crypto kingpin turned con man Sam Bankman-Fried was found guilty
of perpetrating “one of the biggest financial frauds in American
history.” At first glance, the baby faced California wunderkind seems an
odd fit for the role of archvillain. In the courthouse next door, a more
conventional choice for the part offered his own performance Monday. Former
fraudster-in-chief Donald J. Trump took the stand in his civil trial on
allegations of financial fraud.

On the surface, the two men appear to be polar opposites. Having spent the last
month observing SBF’s trial in person, however, I was struck by the
numerous ways in which they are similar. All good con men, like all good actors,
understand the power of storytelling. Sam Bankman-Fried and Donald Trump are
experts in the field.

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When I first saw SBF in court, it took me a second to recognize him. His usual
uniform—an FTX T-shirt, cargo shorts, and sneakers—had been replaced
with a drab purple tie and an ill-fitting gray suit that nearly swallowed him
whole. It was more appropriate attire for a man facing life in prison, even if
he looked like a kid forced to participate in the school play. But it was his
new haircut that really stood out. SBF’s signature had previously been a
mop of curly black hair that appeared to be left to its own devices. While
sporting it, he came off as an eccentric so brilliant he had no time to focus on
his appearance. In court, however, the ’do had been shorn—and
without it, he had lost his power, looking like just another finance wiz kid
caught playing with other people’s money.




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One of the many fictions SBF cultivated was that he was unaware of his image. As
his former girlfriend (and former Alameda Research CEO) Caroline Ellison
testified, the opposite was true. “He thought his hair was very
valuable,” she said in court, and that it was “essential to his
image.” The change in SBF’s appearance was so stark that Ellison
took nearly 30 seconds to identify him from the witness stand. On the other end
of the spectrum is our former president. Donald Trump sells himself as a real
estate magnate, the scion of a New York dynasty. The power suit, perma-tan, and
well-coiffed hair are essential for creating the character and helping us forget
the reality of his origins: a kid from Queens and the son of a slumlord.

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In a similar manner, Trump prides himself on an ostentatious display of wealth.
The marble and the omnipresent gold leaf of Trump Tower may seem garish, but the
intention behind them is clear: to project an aura of extraordinary power and
fabulous affluence. For the supposedly humble billionaire Sam Bankman-Fried, the
opposite was true: He needed to convey humility and disdain for material
possessions in order to sell himself as an effective altruist. He drove a Toyota
Corolla and encouraged Ellison to drive a Honda Civic. Although he lived in a
$40 million penthouse and frequently flew on a private plane, the myth of SBF as
a generous genius spread far and wide, aided and abetted by a fawning press.

Of course, as with any performance, a certain amount of improvisation is
crucial. Trump is famous for claiming his net worth is whatever he feels it
should be. It’s also important to remember: practice makes perfect.
According to Ellison’s testimony, SBF instructed her to prepare seven
different balance sheets for him before approving one he felt comfortable
sharing with stakeholders. FTX and Alameda were privately held businesses, so
these shenanigans were shielded from public view. The Trump Organization is also
privately held; only through the lawsuit by the New York attorney general has
its skullduggery been brought to light.

Speaking of skullduggery, there are broad similarities between the internal
operations of Bankman-Fried’s empire and the Trump Organization. Trump
Inc. is alleged to have inflated the value of its assets to receive loans, and
then purposefully undercounted their value when it came to paying taxes.
SBF’s version of this was to mark the value of illiquid cryptocurrencies
he owned (and one he created himself) far beyond the price they could reasonably
be expected to sell for should the need arise. Hence why tokens like FTT,
created by Bankman-Fried and his colleague Gary Wang, are referred to as
“shitcoins” by the crypto crowd. SBF and Ellison had been
manipulating the price of FTT for years, buying back tokens whenever the price
dipped. When forced to liquidate them to meet surging customer withdrawals from
FTX last November, they discovered—quelle surprise—no one actually
wanted to buy the damn things. FTT became virtually worthless overnight, and FTX
filed for bankruptcy shortly thereafter. (Ellison and Wang pleaded guilty to
fraud and agreed to cooperate with prosecutors.)

To enable this scheme, SBF kept his circle of trust tight, a crucial ingredient
for running a successful con. He hired people he had known for years, such as
his on-again, off-again ex-girlfriend, and a childhood friend from math camp,
and allegedly consulted his parents on the company’s operations. Ten of
the top employees of FTX/Alameda even lived together in a luxury penthouse in
the Bahamas. The Trump Organization, meanwhile, is a family affair, and members
of the inner circle are valued based on their loyalty to the man in charge.
Trump is notorious for never writing emails and not trusting anyone who takes
notes. According to an FBI agent called by the prosecution, SBF, who conducted
essential business operations via the encrypted application Signal, participated
in 288 chat groups that were set to auto-delete.

Finally, a con man needs to hire the right legal counsel. Trump was a devotee of
the notorious shark and legal fixer Roy Cohn. Cohn was an adviser to Joseph
McCarthy, as well as a long list of mobsters (Fat Tony Salerno and John Gotti
among others) and numerous businessmen of ill repute. From Cohn, Trump learned a
simple legal strategy that has so far served him well: never give an inch,
always go on the offense, and make things up if you must. The truth is
immaterial; it’s the story that counts, at least in the court of public
opinion. This strategy was on full display during Trump’s testimony Monday
when he tried to turn his own misdeeds into an indictment of the legal process:
“This is a very unfair trial, very, very unfair, and I hope the public is
watching.” It was a performance Cohn himself might have attempted.

Sam Bankman-Fried hired Daniel Friedberg as FTX’s in-house counsel, an
attorney whose previous stints included working for an online poker site that
folded when it was revealed insiders could access a secret “god
mode” to see other players’ cards. Of course, once he gets in hot
water, a con man must look after himself above all else. After his indictment,
SBF hired new lawyers who attempted to blame Friedberg for FTX’s illegal
activities—the exact maneuver Trump pulled with Michael Cohen. (Friedberg
has reportedly cooperated with US investigators by providing information on how
FTX operated.)

Ultimately, SBF’s attempts to evade punishment for his crimes proved
unsuccessful. Donald Trump faces not just the New York attorney general’s
lawsuit, but indictments in four separate states. And with any luck, he may see
the same fate.


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ASHLEY VALDEZ

See More By Ashley Valdez »



Read More
2024
Sam Bankman-Fried Wanted to Pay Donald Trump Not to Run for President Again—And
Trump Was Apparently Willing to Do It for $5 Billion
If this had all come to pass, Trump could’ve stopped lying about his net worth! 

By Bess Levin

CRYPTO WARS
Binance Founder CZ Says SBF’s Decision to “Bad-Mouth” Him to US Authorities Was
“Not Smart”
In a new podcast, Changpeng Zhao tells the coauthor of Billion Dollar Whale
about his tumultuous relationship with rival cryptofinance founder Sam
Bankman-Fried—and his key contribution to the fall of FTX.

By Tom Wright

True Colors
SBF, Bored Ape Yacht Club, and the Spectacular Hangover After the Art World’s
NFT Gold Rush
Auction houses and talent agencies thought the Web3 works were a fast track to
billions. If it weren’t for a global crypto meltdown, they might have pulled it
off. 

By Nate Freeman


FTX Collapse
Sam Bankman-Fried's Growing Legal Troubles Have Made For a Very Bad Week at Data
For Progress
Sean McElwee, the bombastic, well-connected Democratic activist, ousted founder
of Data for Progress, a polling firm, has come under intense scrutiny for his
campaign finance practices. His well-documented alliance with SBF is only
raising more eyebrows.

By Eric Lutz





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