crypto strategy

Sam Bankman-Fried Launches Crisis Communication Handbook

Sam Bankman-Fried sat down for interviews this week about the collapse of FTX, the cryptocurrency exchange he co-founded and once ran, even as investigators dug and its new leaders have traveled the globe for assets to be saved.

The interviews could be a case study in what not to do in a crisis, some communications officials said.

“It basically breaks every rule that someone in the crisis communications business would advise,” said Andrew Gilman, president and CEO of CommCore Consulting Group, a public relations and communications firm.

Mr. Bankman-Fried, often referred to as SBF, told interviewers for The New York Times DealBook Summit and “Good Morning America” ​​that he bore the blame for FTX’s failure. But he said he did not intend to commit fraud or use client funds to support bets from Alameda Research, a crypto hedge fund attached to FTX that pushed the exchange out of business. “I didn’t know exactly what was going on,” he said of Alameda.

When asked at the DealBook conference if his lawyers thought it was wise for him to speak, Mr. Bankman-Fried said no.

“The classic advice is this: don’t say anything. Back up in 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 doesn’t care what others may think, his current focus is to do whatever he can to help FTX customers and ensure they are well informed,” he said. “The only person who can honestly tell the story of Mr. Bankman-Fried is Mr. Bankman-Fried, and he will continue to do so.”

The strategy worked well with hedge fund manager William Ackman,

who tweeted about the DealBook interview, “Call me crazy, but I think @sbf is telling the truth.”

Opening expectations

Asaf Fybish, co-founder and managing director of GuerillaBuzz, a public relations agency that works for clients involved in crypto, blockchain and Web3, said Mr. Bankman-Fried’s decision to speak with the press n was unconventional, but perhaps understandable in the context of cryptocurrency.

The crypto community values ​​communication and accessibility, especially from its leaders, so keeping quiet could have created the wrong impression with a key constituency, Fybish said.

“SBF was very open and always communicating,” he said. “It was a pretty familiar voice in space. It was getting a lot of love from the press, both crypto and mainstream press. For him, always being so open when everything is going well and then suddenly turning off the radio when everything is going badly does not seem to suit him.

Several communication professionals, however, highlighted the disadvantages they perceived.

There comes a point in any crisis when it becomes possible to pivot to the future, but FTX and Mr. Bankman-Fried are not there yet, CommCore’s Mr. Gilman said. “People are still finding out how much money was lost,” he said.

If Mr. Bankman-Fried is determined to say anything now, Mr. Gilman said he would have advised putting a statement online and declining to answer questions at this time.

The typical formula for crisis communications includes describing the steps taken to resolve a problem and prevent it from happening again, said Jill Zuckman, a partner at communications agency SKDK, which is part of

Stagwell Inc.

“He doesn’t really have the ability to put everything back together because he’s been kicked out of the business,” she said.

Struggling people and businesses also need to know the facts before publicly discussing the issues, Ms Zuckman added. “I’m not sure he really knows the breadth and depth of what happened,” she said. “So the risk for him is that he said something that is going to cause him legal harm.”

Observers have said that public statements may create legal exposurefurthermore, if investigators find discrepancies between these statements and internal communications.

The interviews could have served a purpose, even if that purpose is opaque to outsiders, suggested Michael Sitrick, chairman and CEO of Sitrick and Company, a strategic communications and crisis management firm.

People in those situations shouldn’t do interviews without a clear and meaningful purpose, and Mr. Bankman-Fried’s interviews generated good critical coverage, Mr. Sitrick said.

But Mr Sitrick said he could not fully assess the results of the mini-media tour because he did not know Mr Bankman-Fried’s aims.

“Was it to show that he is transparent? he said. “Was it to show he didn’t know what was going on?” I couldn’t say.

“Just because I don’t know his goal doesn’t mean he doesn’t have a goal,” he said.

Write to Nat Ives at [email protected]

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