Thursday night, the crypto kingpin turned con man Sam Bankman-Fried was found guilty of committing “one of the largest financial frauds in American history.” At first glance, the child-faced California wunderkind seems like an odd fit for the role of archvillain. In the court next door, a more conventional option for the segment offered its own performance on 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 the SBF test in person, however, I was struck by the many ways in which they are similar. All good tricksters, like all good actors, understand the power of storytelling. Sam Bankman-Fried and Donald Trump are experts in the field.
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 His usual uniform—an FTX T-shirt, cargo shorts, and sneakers—had been replaced by a drab purple tie and an ill-fitting gray suit that almost swallowed him whole. More appropriate clothing for someone facing prison life, even if he looks like a kid forced to participate in a school play. But his new haircut is what really stood out. SBF’s signature used to be a mop of curly black hair that looked like it had been left to its own devices. While sporting it, he became an eccentric so brilliant that he had no time to focus on his appearance. In court, however, the ‘do is cut—and without it, he loses his power, looking like just another finance wiz kid caught playing with other people’s money.
One of the many fictions cultivated by SBF is that he is not aware of his image. As her ex-girlfriend (and former Alameda Research CEO) Caroline Ellison proves, the opposite is true. “She thought her hair was very valuable,” she told the court, and that it was “important to her image.” The change in SBF’s appearance was so drastic that it took Ellison nearly 30 seconds to recognize him from the witness stand. At 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 in creating the character and help us forget the truth of his origin: a kid from Queens and son of a slumlord.
Similarly, Trump prides himself on a flamboyant display of wealth. The marble and the omnipresent gold leaf of Trump Tower may seem inauspicious, but the purpose behind it is clear: to project an aura of extraordinary power and extraordinary wealth. For supposedly humble billionaire Sam Bankman-Fried, the opposite happened: He had to convey humility and disdain for material possessions to sell himself as an effective altruist. He drives a Toyota Corolla and he encourages Ellison to drive a Honda Civic. Although he lives in a $40 million penthouse and flies regularly in a private plane, the myth of SBF as a benevolent genius has spread far and wide, aided and abetted by a fawning press.
Of course, as with any performance, a certain amount of improvisation is essential. Trump is famous for claiming his net worth as he feels it is necessary. It’s also important to remember: practice makes perfect. According to Ellison’s testimony, the SBF instructed him to prepare seven different balance sheets for him before approving one that he felt comfortable sharing with stakeholders. FTX and Alameda are privately held businesses, so these shenanigans are shielded from the public. The Trump Organization is also privately held; it was only through a lawsuit by the New York attorney general that its skullduggery was exposed.
Speaking of skullduggery, there are many similarities between the internal operations of Bankman-Fried’s empire and the Trump Organization. Accused of being inflated by Trump Inc. the value of its assets in order to receive loans, and then deliberately lowers their value when it comes to paying taxes. SBF’s version of this is to mark the value of the illiquid cryptocurrencies he owns (and one he created himself) above the price they can reasonably be expected to sell for when there is demand. So why tokens like FTT, created by Bankman-Fried and his colleagues Gary Wang, called “shitcoins” by the crypto crowd. SBF and Ellison have been manipulating the FTT price for years, buying back tokens whenever the price drops. When forced to liquidate them to meet the growing withdrawal of customers from FTX in November, they discovered-quelle surprise-no one wanted to buy the damn goods. 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 pull off this scheme, SBF keeps his confidence tight, a key ingredient to running a successful con. He hired people he had known for a long time, 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 FTX/Alameda’s top employees even live in a luxury penthouse in the Bahamas. The Trump Organization, on the other hand, is a family affair, and members of the inner circle are valued based on their loyalty to the man in charge. Trump is famous for not writing emails and not trusting anyone to take notes. According to an FBI agent called by the prosecution, SBF, which conducts important business operations through the encrypted Signal application, participated in 288 chat groups set for automatic deletion.
Finally, a fraudster should get the right legal counsel. Trump is a devotee of the famous shark and legal fixer Roy Cohn. Cohn was an advisor to Joseph McCarthy, as well as a long list of mobsters (Fat Tony Salerno and John Gotti and others) and many disreputable businessmen. From Cohn, Trump learned a simple legal strategy that has so far served him well: don’t give an inch, always take offense, and do things when you have to. Truth is immaterial; it’s the story that matters, at least in the court of public opinion. This strategy was on full display during Trump’s testimony on Monday when he tried to turn his own mistakes into an indictment of due process: “It was an unfair trial, very, very unfair, and I hope the public is watching.” It’s a performance that Cohn himself has attempted.
Sam Bankman-Fried was hired Daniel Friedberg as FTX’s in-house counsel, a lawyer whose previous duties included working for an online poker site that folded when it was revealed that insiders could access a secret “god mode” to see other people’s cards players. Of course, once he can drink hot water, a cheater has to take care of himself above all else. After his indictment, the SBF hired new lawyers who tried to blame Friedberg for FTX’s illegal activity—the exact maneuver that Trump pulled Michael Cohen. (Friedberg reportedly cooperated with US investigators by providing information on how FTX operated.)
In the end, the SBF’s attempt to avoid punishment for his crimes proved unsuccessful. Donald Trump is facing not only the New York attorney’s case, but charges in four different states. And with any luck, he might see the same fate.