[Discussion] Cryptocurrency

Sam Bankman-Fried is so f*cked.

I have come to court every day since opening arguments thinking, Surely things cannot get worse for this man. Surely we have reached the bottom. Unfortunately, there is no bottom — in the prosecution’s telling, FTX and Alameda Research, his exchange and trading company, were matryoshka dolls of crime. Today, the defense started its case, which should theoretically present Bankman-Fried in a better light. But if what I saw of him on the stand is any indication, he may be more damning for himself than any of the prosecution’s witnesses.

Whatever Bankman-Fried can’t pin on Alameda CEO Caroline Ellison, he is essentially trying to off-load onto FTX lawyer Dan Friedberg. But blaming your lawyers for your decisions often implicates stuff — conversations, communications, documents — that are sometimes covered by attorney-client privilege. (If you blow up your own attorney-client privilege, it’s much worse for you than it is for anyone else, which is why most adults blame their own lawyers only under extreme circumstances.) The defense appears to be trying to thread the needle by saying that Bankman-Fried believed everything at FTX was fine because lawyers had been involved.

o today the jury got to go home early while the judge conducted an odd evidentiary hearing to figure out exactly what Bankman-Fried wants to tell the jury — and how much of it going to be admissible.

Bankman-Fried took the stand as part of this hearing. This meant that prosecutor Danielle Sassoon got a crack at him, and boy howdy, she beat him like a piñata.

We’ve heard a lot of testimony in this trial about disappearing messages on Signal, which the prosecution has strongly implied are evidence of wrongdoing. I don’t believe this to be true! Plenty of businesses destroy documents as a matter of course, for a wide variety of reasons, many of them harmless.

The defense is seeking to testify that the disappearing text messages were part of a document retention policy which had been approved by FTX general counsel Friedberg. Though Bankman-Fried has testified that important business records were retained, the defense has been unable to produce the actual document retention policy, though they say it exists.

We saw a document that cataloged all 288 Signal chat rooms set to auto-delete that Bankman-Fried was in. Some of those chats contained lawyers. Bankman-Fried said that Slack messages were more official than Signal messages, though informal conversations about serious matters did take place in chats that disappeared. In rambling testimony that I have heroically condensed, Bankman-Fried noted that some sensitive business records relating to know-your-customer laws needed to be deleted for customer safety — photos of passports, for instance, or social security numbers. He then added that in November 2022, in response to the concerns of regulators, he turned the auto-delete feature off on most of his chats.

Defense lawyer Mark Cohen did his best. Unfortunately for him, the cross-examination was conducted by Sassoon, who looks like someone who uses “summer” as a verb, and often appears deceptively timid, with her hands held close to her chest. In her cross, she simply unhinged her jaw and ate Bankman-Fried.

Two unnecessary sports metaphors in three sentences. That’s how you know it’s one of my comments.

IT’S THE SIXTH annual Black Blockchain Summit, and organizers are quietly removing a couple rows of chairs from the room. The Howard University auditorium we’re in looks a third empty. There are at most 100 people in the crowd today—a far cry from the 1,500 who attended the summit over three days last year, when Sam Bankman-Fried was still hailed as crypto’s boy wonder. Now, in late September, he’s weeks away from being convicted for an $8 billion fraud scheme. Meanwhile, the price of Bitcoin has been staggering back up from post-FTX fallout. The public reputation of crypto and its promoters has not recovered.

Despite this, the mood in the room is cheery, like a crypto homecoming weekend. There’s a table with free T-shirts reading “Satoshi Is Black.” If the summit’s agenda is to be trusted, crypto and blockchain still have formidable power to financially liberate Black people. Also to potentially end poverty, disrupt the prison-industrial complex, mitigate environmental injustice, and supercharge political dissidence.

The music switches from soft elevator tunes to Usher, signaling that the day’s events are about to begin. Brother Sinclair Skinner, the Summit’s cofounder, enters the auditorium, and the stragglers in the room snap to order. Skinner is one of those people who’s never met a stranger in his life. He’s wearing his usual “I ♥️ Black People” T-shirt—it’s his version of a black turtleneck. His cat-eye glasses, lenses tinted pink, are giving Clark Kent meets P-Funk Mothership. He says a few words of welcome, and we stand up to receive libations from Priest Nana Akua N. Zenzele: “Bless us abundantly. We ask that you continue to support our people in this blockchain summit and that we are supported in using this technology throughout the world.” We sing along to a Howard student’s beautiful rendition of “Lift Every Voice and Sing.”

I’m here as a nonbeliever. I worry that the Black-utopian narrative of a crypto-fied future leaves out how many of us will survive to the end of the story. With Skinner onstage, though, my mood swivels toward optimism. It helps that he’s an unusually credible narrator: a Howard alum, with a storied history in organizing protests on that campus and for the 1995 Million Man March, as well as forming the first Black super PAC for Barack Obama’s 2012 campaign. He was turned on to crypto when he helped organize a DC Occupy encampment and saw how a Bitcoin wallet was used to distribute resources. In 2017, he launched the remittance company BillMari by embarking on a bus tour of historically Black colleges and universities, spreading the gospel of this new tech to young Black minds. The tour ended in Zimbabwe, where it was abruptly stopped by the uprising against Robert Mugabe. (“When people tell their startup launch stories, I say mine included a coup,” Skinner tells me later. “If you can’t top that, I’m not impressed.”) The idealistic ethos of crypto—anarcho-populist protest meets decentralized network, as Skinner saw it—convinced him it could be a way to build a pan-African movement.

The next year, in 2018, Skinner created the Black Blockchain Summit to hash out with other Bitcoin disciples, currency creators, artists, and government reps what the future could look like for Black communities globally. This was during crypto’s early wave, when Nipsey Hussle was evangelizing the digital revolution. Then, as the market inflated, scams proliferated, and Black investors started to get crowded out, Skinner envisioned the summit as a “safety net” by which Black people could learn from and protect one another. He still sees it that way. When I ask him what he thinks of the FTX crash, he replies that no one should be surprised. The company’s founder may have used the language of altruism, but “it’s still the same white elites moving money around,” he says. What about the risks for the average investor? Skinner acknowledges that crypto is a gamble—but the promise of the future it might deliver seems, to him, magnitudes better than sticking to the status quo. When you have nothing to lose, and no sign that TradFi or Silicon Valley will show up for Black people, gambling on crypto starts to look like a necessity.

Crypto holds a certain appeal for Black people. Black Americans are significantly more likely to invest in cryptocurrency than white Americans and to buy crypto as their first investment. A definitive picture of the current moment is hard to capture, but last year an estimated 25 percent of Black Americans owned cryptocurrency; for those under 40 years old the portion jumped to 38 percent. At the same time, Black people are significantly less likely than white people to think of cryptocurrencies as risky. They are about twice as likely to believe, falsely, that cryptocurrency is both safe and regulated by the government—a perception helped by Black celebrities paid to lend cultural cred to white-led crypto companies.

All this might start to form a picture of a Black populace that is uniquely vulnerable to crypto’s deceptions. But the Black Blockchain Summit insists on troubling this assumption. As the debris settles from last year’s crash, the energy in this room continues to be bullish. I want to know: What’s left to buy into?