Episode Transcript
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0:00
Ah, the Bahamas. What if you could
0:02
hang out with celebrities, live in a penthouse
0:04
above the crystal clear ocean with all of your
0:06
best friends, and have it be 100% paid for? FTX
0:11
founder Sam Bankman-Fried made that
0:13
dream a reality, but US prosecutors
0:15
say he was hiding a dark secret. As
0:18
cryptocurrency gained mainstream popularity,
0:21
FTX was the poster child, spending
0:23
millions on pro-sport sponsorships
0:25
and A-list celebrity endorsements from the
0:27
likes of Tom Brady, Larry David,
0:30
and even Shark Tank's Kevin O'Leary, with
0:32
some investing their own money in the marketplace.
0:35
Many thought Sam Bankman-Fried was changing
0:37
the game as he graced the pages
0:39
of Forbes and Vanity Fair. Barely 30,
0:41
the young crypto billionaire became
0:43
a powerful financial figure and was influencing
0:45
the global economy. But in
0:48
just one month, his exchange would collapse
0:50
and SBF would find himself in handcuffs
0:53
as tens of thousands of investors would
0:55
blame him for their fortunes lost. It's
0:58
one of the most dramatic
0:59
falls from grace and represents one
1:01
of the most spectacular failures of
1:03
corporate control in American history. Here,
1:05
exclusive tape of Sam and his
1:08
former girlfriend and business partner, Caroline
1:10
Ellison, who later admitted something
1:12
had gone very wrong inside their
1:14
operation. From Bloomberg and Wondery
1:16
comes Spellcaster, a new six-part
1:19
docuseries about the meteoric rise
1:21
and fall of FTX and its founder,
1:23
Sam Bankman-Fried. I'm about to play
1:25
a clip from Spellcaster,
1:26
the fall of Sam Bankman-Fried.
1:29
While you're listening, follow Spellcaster wherever
1:31
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1:34
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1:36
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1:38
today.
1:48
The Baja Mara Resort is a gargantuan
1:51
hotel on a gorgeous stretch
1:53
of Bahamas beachfront. You
1:55
enter by crossing a Roman-style
1:57
bridge over a landscaped lake.
1:59
where every night there's a glitzy
2:02
fountain show with pulsing lights and
2:04
extremely loud music. It's
2:06
like the Bellagio on the Caribbean. Tagan
2:10
Klein checked into the Bahammar one
2:13
afternoon in April of 2022.
2:14
So you arrive
2:16
and there's a fish tank behind the check-in desk.
2:19
A big vertical tank filled with lionfish
2:21
to be more specific. There were signs
2:23
for crypto Bahamas everywhere. It really
2:26
felt like the whole island was kind of buzzing
2:28
about this event. Tagan was a 29-year-old
2:30
crypto entrepreneur and influencer. She'd
2:33
done a lot
2:34
of these crypto conferences before, but
2:36
she didn't know much about this one, called crypto
2:38
Bahamas. Other than that, it was invite
2:40
only and she'd agreed to speak at the event.
2:43
It almost had this dark fantasy Disneyland
2:45
Vegas vibe to it, and
2:48
it really felt surreal from the moment that I landed.
2:50
She got her badge and was directed
2:52
toward the VIP reception. She
2:55
walked out on the hotel lawn to find a small
2:57
gathering of people surrounded by cabanas
3:00
and giant video screens. A local
3:02
marching band played in the background. There
3:04
was one big table. It was a long rectangular
3:07
table set for about 60 people.
3:09
So we kind of coalesced in the middle of that table
3:11
and we all talked together. It was
3:13
a three-course meal, no caviar, but
3:16
definitely nice food. The guests
3:18
took turns introducing themselves. There
3:21
were a lot of the usual suspects. Hedge
3:23
fund guy, venture capital dude,
3:25
crypto bro. Then a woman
3:27
sat down at the table. She came with two
3:30
guys and they were very
3:32
nice. They apologized for being late to the dinner. Tagan
3:34
recognized the woman right away. It
3:37
was Katy Perry as an international
3:39
pop superstar, Katy Perry. Then
3:42
the guy next to her spoke up. He said, I got
3:44
famous from my role playing Legolas
3:47
in Lord of the Rings and it was actually Orlando
3:49
Bloom. But for this crowd, Katy
3:52
Perry and Orlando Bloom weren't
3:54
the biggest celebrities there.
3:55
The next morning,
3:58
Michael Lewis, the world. renowned business
4:00
journalist, sat on stage
4:03
with an awkward looking 30 year old guy
4:05
with a mop of curly hair, wearing
4:07
shorts and a baggy t-shirt. Three
4:10
years ago nobody knew who you were and
4:12
now you're sitting on the cover of magazines
4:15
and you're a gazillionaire and your business is- This
4:17
was who people
4:18
were here to see. The co-founder
4:20
and CEO of FTX,
4:23
one of the world's largest crypto exchanges.
4:26
He was a billionaire many times over,
4:29
a prolific political donor, a
4:32
boundary breaking philanthropist and
4:34
he'd done it all in just a few years.
4:36
These are world- you're
4:38
breaking land speed records and
4:41
I don't think people are really noticing what's
4:43
happened, just how dramatic the
4:45
revolution has become. There's a status
4:48
upheaval that's going on in the financial world and
4:50
you're sitting right in the middle of it.
4:51
Sam Bankman Freed.
4:54
Yeah, I mean basically and I think
4:57
the way that I approached it was like,
5:00
what should the product
5:02
be? Like, you know- Lewis has
5:04
written some of the definitive business books
5:07
of the past 40 years. Moneyball,
5:09
Liar's Poker and The Big Short.
5:12
He has spent a lifetime sorting
5:14
businesses good guys from the charlatans.
5:18
And on stage at least, he sounded impressed
5:20
by what Sam Bankman Freed had accomplished.
5:23
When Sam didn't just sit with Michael Lewis,
5:26
he was everywhere. He shared the
5:28
stage with former President Bill Clinton
5:31
and former British Prime Minister Tony Blair.
5:34
He had an intimate heart to heart with
5:36
Tom Brady. And then another
5:38
with the quarterback's then-wife, Giselle
5:41
Bunshin, the Brazilian supermodel.
5:43
Oh, let's just start. You
5:46
know, I mean, ultimately, the
5:48
scale of impact you can have on
5:50
the world is just really, really large.
5:54
Sam was beyond awkward. His leg
5:56
bounced wildly as he spoke. His
5:58
eyes darted around. around the room. And
6:02
that's, I think, what really sets it apart.
6:05
His audience didn't seem to care. His
6:08
awkwardness came off as a kind of charm.
6:10
Like he was totally indifferent to what
6:13
people thought about it. And they
6:15
lapped it up,
6:16
especially when he talked about his driving
6:19
motivation,
6:20
doing good. Sam
6:23
had promised to give all of his wealth away,
6:25
all $26 billion of it. The
6:28
FTX Foundation's recent announcement to give up
6:30
to $1 billion this
6:32
year alone to high-impact charities show
6:35
how Sam is transforming corporate governance
6:38
and becoming the modern-day CEO that
6:40
the world needs. Today we'll discuss
6:42
what he's doing. On stage with Giselle, Sam unveiled
6:45
a new ad showing him standing with
6:47
his arms crossed with a calmly
6:49
confident, even virtuous expression
6:52
on his
6:52
face. He wore a hoodie and
6:54
shorts. The quote on his ad
6:56
said, I'm in on crypto because
6:59
I want to make the biggest global impact
7:01
for good. There you are.
7:03
Whoo! Yeah. Oh. Watch
7:07
out, he might leave crypto star modeling career. Um.
7:12
Kagan Klein had never seen anything
7:14
like it. I think a lot of people were
7:17
kind of in awe. The crowd was captivated
7:20
by Sam's good intentions, by the celebrities
7:22
and world leaders he kept company with,
7:25
and the sheer scale of his promises.
7:28
This is where I realized that it
7:30
was kind of the Sam show. The
7:33
Sam show.
7:34
In the spring of 2022, crypto was booming and
7:38
Sam Bankman Freed was the star.
7:41
At one point, FTX said it was
7:43
processing on average $12.5 billion
7:45
worth of transactions each day.
7:50
And it was all Sam claimed in the name
7:52
of one day giving his fortune away
7:55
to save the world.
7:57
Then,
7:58
not long after his star turned into a star,
7:59
in the Bahamas, the Sam
8:02
Show began a very different
8:04
season. Competitors
8:06
and regulators began to circle. Crypto
8:09
prices were falling. Behind
8:11
the scenes, Sam's closest advisors
8:14
were abandoning him. At the same
8:17
time, my colleagues at Bloomberg started
8:19
poking at the myth of Sam Bankman
8:22
freed. And we published stories about
8:24
it. We weren't the only ones. But
8:26
even we couldn't imagine the full scale
8:29
of what was wrong
8:29
inside Sam's empire. By
8:33
year's end, FTX was bankrupt.
8:36
$8 billion were missing, and
8:38
Sam was in handcuffs. Investors,
8:41
prosecutors, lawyers, and crypto
8:44
fans were all left to figure
8:46
out what was real and what
8:48
wasn't.
8:56
Call
8:59
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9:01
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