Hello, friends, and happy scam season. To usher in the spirit, let me tell you a story.
A few years ago, I was sitting at my office in New York, when I got a phone call from my former co-founder, Jon. He was on a boat and he had a big question for me:
'Have you heard of something called Fyre Festival?'
'Yes, Jon. The entire internet has heard of Fyre festival.'
'Well, I'm on this dude's boat.’
‘What dude, Jon.’
‘The Fyre Festival guy. He's here with me.’
As I would learn, Jon had just explained to Billy MacFarland, the Fyre Fest “mastermind,” that we'd recently worked on another high-profile crisis communications case and might discuss the possibility of working together to solve his public relations crisis. I asked Jon to take me off speaker.
'Jon, he has no money. There is no way he has money. if he had money he wouldn't have a.... fyre.’
Jon put me back on speaker.
‘We'd be happy to assist, Billy. Can you wire payment?’
Crickets.
Billy has since been to prison and back, and just this fall he tried to set up a Fyre redux called PYRT, which the Bahamas have shut *right* down, promising they’ll arrest him if he plans another event on their land.
But that’s not the end of the drama for those islands.
These days, they’re home to a new and ever more expensive scandal at the hands of Sam Bankman-Fried.
“SBF,” for the uninitiated, is the mogul who founded the crypto exchange FTX, which is incorporated in the Bahamas (nothing to see here!) and at the height of its success was valued at $32 billion. At age 30, SBF was the new Valley wunderkind, gracing the covers of Forbes and Fortune and god-knows-what-else in schlubby grey shorts and a halo of unkempt frizz.
He espoused the gospel of “effective altruism,” a framework encouraging people to give up on their shit-pay nonprofit jobs and instead focus on generating income for charitable donation. A morally upright crypto bro! What a miracle!
That was the vibe until someone leaked a balance sheet this fall, which revealed how precarious SBF’s enterprise really was. What followed was a classic bank run: people got nervous and pulled their money from the FTX token, tanking its value, and the company’s, and the entire speculative market around it. The problem was, because he’d been funding FTX with funny money, Bankman-Fried didn’t have the money to pay out people divesting their coins, and in November, had to declare bankruptcy.
On that funny money: now it turns out that SBF has been lying to investors since the beginning. He’s been charged with wire fraud on both customers and lenders, and conspiracy to defraud the Fed. Oh, and there’s some campaign finance law violation in there — he’s big on lobbying on behalf of crypto.
So now he’s being held in the Bahamas without bail as he awaits an extradition hearing, and I can’t even feign surprise. This guy ran on ego and fumes and absolute hubris. He’s also admitted publicly that he doesn’t actually believe in altruism, he’s just been giving people an image to believe in.
“On a macro level, it’s human to worship things,” the investor Scott Galloway told Vanessa Friedman at the New York Times. “Tech with its mysteries is easy to worship. It’s the idolatry of innovators.”
It’s easy to look away from potential wrongdoing when you want to believe an optimistic story. The temptation is even greater if you want to emulate the protagonist. “I could be like him,” the thinking goes — and that thinking gets complicated when you take into account that getting to be like him might take some dirty work.
In this case, that dirty work is not just lying to a bunch of wealthy speculators, but making the Bahamas a colonial trampling ground for our greedy little boys. It’s a tale as old as time, and we routinely let it happen when we believe in the conquest, whether it’s literal land conquering, or the more contemporary cause of rapid wealth accumulation.
When will we learn that the out-of-nowhere maverick is not a hero? Maybe when we don’t have to rely on magical thinking for our own salvation.
Wishing you a holiday season full of honesty, integrity, and contentment with what you already have.
I can’t remember the first time I read Goodnight Moon — probably because my parents started reading it to me before my infant brain could really catalog memory. Chances are, you had a similar experience. The book turns 75 this year, and over that time, it’s sold over 48 million copies, touching at least that many lives, time and time over.
Hello, friends, and happy scam season. To usher in the spirit, let me tell you a story.