Sam Bankman-Fried sat for news interviews this week about the collapse of FTX, the cryptocurrency exchange he co-founded and once ran, even as investigators dug in and its new leaders scoured the globe for assets to salvage.
The interviews could be a case study in what not to do in a crisis, some communications executives said.
“He’s basically breaking every rule that somebody in the crisis communications field would advise,” said Andrew Gilman, president and chief executive at CommCore Consulting Group, a public relations and communications firm.
Mr. Bankman-Fried, frequently referred to as SBF, told interviewers at the New York Times DealBook Summit and on “Good Morning America” that he bore responsibility for the failure of FTX. But he said he didn’t intend to commit any fraud or use customer funds to back bets by Alameda Research, a crypto hedge fund attached to FTX that pushed the exchange to bankruptcy. “I didn’t know exactly what was going on,” he said of Alameda.
Asked at the DealBook conference whether his lawyers thought it was wise for him to be speaking, Mr. Bankman-Fried said no.
“The classic advice, right: Don’t say anything. Recede into a hole,” he said. “And that’s not who I am … I have a duty to explain what happened.”
Mark Botnick, a spokesman for Mr. Bankman-Fried, defended the interviews.
“Sam is not concerned about what others may think, his focus right now is doing anything he can to help FTX customers and make sure they are well-informed,” he said. “The only person who can honestly tell Mr. Bankman-Fried’s story is Mr. Bankman-Fried, and he will continue to do so.”
The strategy played well with hedge-fund manager William Ackman, who tweeted about the DealBook interview, “Call me crazy, but I think @sbf is telling the truth.”
Expectations of openness
Asaf Fybish, co-founder and chief executive officer of GuerillaBuzz, a public-relations agency that works for clients involved with crypto, blockchain and Web3, said Mr. Bankman-Fried’s decision to talk with the press was unconventional, but perhaps understandable in the context of cryptocurrency.
The crypto community values communication and accessibility, especially from its leaders, so going silent could have created a bad impression with a key constituency, Mr. Fybish said.
“SBF was very open and always communicating,” he said. “He was a pretty familiar voice in the space. He was getting a lot of love from the press, both crypto and traditional press. For him to be always this open when times are good and then all of a sudden turn radio silent when everything turns bad, it doesn’t seem to fit with him.”
Several communications professionals, however, emphasized the downsides they perceived.
There comes a time in any crisis when it becomes possible to pivot toward the future, but FTX and Mr. Bankman-Fried aren’t there yet, said CommCore’s Mr. Gilman. “People are still finding out how much money was lost,” he said.
If Mr. Bankman-Fried is determined to say something now, Mr. Gilman said he would have advised putting a statement online and declining to take questions yet.
The typical formula for crisis communications includes describing the steps being taken to fix a problem and prevent it from happening again, said Jill Zuckman, partner at communications agency SKDK, part of Stagwell Inc. “He doesn’t really have the ability to put it back together because he’s shut out of the company,” she said.
People and companies in trouble also need to know the facts before they discuss problems publicly, Ms. Zuckman added. “I’m not sure he really knows the breadth and depth of what happened,” she said. “So the risk to him is that he said something that’s going to cause him legal harm.”
Observers have said that public statements can create legal exposure, moreover, if investigators find discrepancies between those statements and internal communications.
The interviews could have served a purpose, though, even if that purpose is opaque to outsiders, suggested Michael Sitrick, chairman and chief executive of Sitrick and Company, a strategic communication and crisis management firm.
People in these situations should not do interviews without a clear and meaningful objective, and Mr. Bankman-Fried’s interviews generated a fair amount of critical coverage, Mr. Sitrick said.
But Mr. Sitrick said he couldn’t fully gauge the results of the mini-media tour because he didn’t know Mr. Bankman-Fried’s goals.
“Was it to show he’s transparent?” he said. “Was it to demonstrate that he wasn’t aware of the stuff that was going on? I couldn’t tell.”
“The fact that I don’t know what his objective is doesn’t mean he doesn’t have an objective,” he said.
Write to Nat Ives at [email protected]
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