Embattled FTX Founder Sam Bankman-Fried (SBF) fell victim to one of the classic mistakes often made by a leader: He believed in his own schtick.
And like most toppled leaders, the 30-year-old wunderkind — and a whole bunch of blind loyalists — is paying a high price for getting carried away.
“He got caught up with how great he was,” leadership expert and former Medtronic CEO Bill George said on Yahoo Finance Live. “And I don’t think he was ever there. I’ve not seen the performance at all. This is a young guy who really hasn’t created anything — and he charmed a lot of people.”
The cryptocurrency exchange FTX filed for bankruptcy earlier this month, with court proceedings starting on Tuesday. Bankman-Fried resigned at the time of the filing and has since taken to Twitter to share his side of things in a series of bizarre tweet storms.
SBF became a crypto billionaire and a mainstream star in the industry by the time he was 29. A year later, he has lost his fortune and admitted to loaning FTX customer funds to Alameda Research, a trading firm he co-founded. Trust and money immediately flowed out of the stunned crypto space.
The Bahamas-based SBF has not been charged with a crime, although a criminal case against him is not out of the question. Federal prosecutors in Manhattan are investigating the FTX collapse, the Wall Street Journal reported, citing unnamed sources familiar with the matter.
In any case, George said that investors would be wise to heavily scrutinize leaders, especially those held up on a pedestal by the media and those in other avenues.
“How do people get sucked into this? Because it can happen again,” George added. “There’s somebody coming around every year with these kind of approaches. And I think investors have to be careful not to get drawn in, to really look: Who is the leader? And can you trust the leader?”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi there is LinkedIn.
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