Sam Bankman-Fried lobbied for Taylor Swift deal as FTX bled cash and execs urged restraint

Earlier this year, arsenic the crypto meltdown was draining the manufacture of liquidity, FTX executives were begging institution laminitis Sam Bankman-Fried to sphere currency and halt spending hundreds of millions of dollars connected personage endorsements.

But the 30-year-old billionaire, who'd relied connected branding and hype to rapidly instrumentality his crypto speech from upstart to stalwart, was acceptable connected signing up 1 much large name.

Three radical adjacent to FTX and Bankman-Fried told CNBC that the erstwhile CEO lobbied aggressively for a concern with 11-time Grammy Award victor Taylor Swift. The deal, which would person outgo the now-bankrupt institution much than $100 cardinal implicit 3 years, was adjacent to coming to fruition earlier it fell isolated successful the spring, said the people, who asked not to beryllium named due to the fact that of confidentiality agreements.

The erstwhile executives, who had nonstop cognition of the negotiations, said the concern would've been a catastrophe for FTX due to the fact that of the steep terms tag. Bankman-Fried's committedness to getting the Swift woody done contempt the deteriorating concern situation acceptable a signifier of ignoring his lieutenants and going it alone, a half-dozen erstwhile institution insiders and concern partners said.

The Financial Times reported earlier that FTX held talks with Swift astir a imaginable sponsorship.

Bankman-Fried's overconfidence was embedded into an enactment that had fewer checks connected its person and nary committee of directors to clasp him accountable. Meanwhile, Bankman-Fried portrayed a precise antithetic persona to the public, showing himself arsenic a quirky young genius comfy successful shorts and a T-shirt oregon successful a suit successful beforehand of Congress who repeatedly professed his content successful effective altruism, a doctrine that promotes the thought of earning a batch of wealth successful bid to donate it to the astir important causes.

Valued astatine $32 cardinal earlier this year by backstage investors, FTX spiraled into bankruptcy past period aft skepticism emerged astir the wellness of the crypto exchange's financials and customers began demanding withdrawals lone to beryllium told their wealth wasn't available. Even facing imaginable transgression charges and the anticipation of years successful prison, Bankman-Fried has continued to shun advisors by speaking publicly, offering property interviews and tweeting his defense.

"I person a work to speech to people; I person a work to explicate what happened," Bankman-Fried said successful a video interview astatine The New York Times DealBook Summit past week, acknowledging that his lawyers are opposed to his existent tactics. "I don't spot what bully is accomplished by maine conscionable sitting locked successful a country pretending the extracurricular satellite doesn't exist."

Between his DealBook appearance, an interrogation with ABC's "Good Morning America" and his commentary connected assorted podcasts, Bankman-Fried has repeatedly claimed that FTX's downfall was the effect of sloppy absorption and excessive risk.

Bankman-Fried has denied committing fraud and said helium was unaware of overmuch of the intermingling of funds that took spot betwixt FTX and Alameda Research, Bankman-Fried's hedge fund. At slightest $8 cardinal successful FTX lawsuit funds are present unaccounted for and were utilized to backstop billions successful indebtedness losses astatine Alameda.

Bankman-Fried besides ran accelerated and escaped with institution cash. Within conscionable implicit 2 years of starting FTX successful 2019, Bankman-Fried signed a $135 million, 19-year woody with the NBA's Miami Heat for naming rights connected the team's arena. He besides signed sponsorships with the Golden State Warriors, Major League Baseball and Formula One, and got Larry David to beforehand the institution successful a Super Bowl ad. Gisele Bündchen, Tom Brady, Shaquille O’Neal, Stephen Curry, David Ortiz and Naomi Osaka were among the brand's ambassadors.

Part of the Swift woody would person included the accumulation by the vocalist of a postulation of non-fungible tokens (NFTs), oregon integer items that tin emergence and autumn successful value. Beyond that, determination was a deficiency of clarity implicit what Swift would beryllium doing for the company, sources said. After the Swift statement fell apart, talks emerged internally implicit a woody with Katy Perry arsenic precocious arsenic August, 1 idiosyncratic said.

Representatives for Swift declined to comment, and Perry did not respond to CNBC's petition for comment.

FTX insiders said that portion immoderate radical successful and astir the institution questioned Bankman-Fried's decisions, helium surrounded himself astir instantly with a unit of yes men. Two sources utilized the connection "insular" successful describing his enactment style. Bankman-Fried chiefly sought proposal from a tight-knight radical successful the Bahamas, wherever helium lived and wherever the institution was headquartered, sources said.

One erstwhile FTX enforcement said Bankman-Fried had a inclination to chew retired employees who disagreed with him successful a mode that deterred others from speaking up. When Bankman-Fried was angry, sources said his knee-jerk absorption was to instantly blasted underlings. Some erstwhile insiders said Bankman-Fried enactment connected an enactment for the public, portraying himself arsenic an easygoing CEO.

Bankman-Fried said successful a connection to CNBC that helium disagrees with the characterizations provided by those erstwhile employees. He declined to remark connected details of the Swift negotiations.

"Partnerships were an country that was much contentious and connected the borderline I primitively was successful favour and yet started pushing backmost connected caller ones," Bankman-Fried said successful the message.

John Ray III, the caller CEO tapped to restructure FTX said successful filings that successful his 40 years of ineligible experience, which includes Enron's liquidation, helium had ne'er seen "such a implicit nonaccomplishment of firm controls and specified a implicit lack of trustworthy fiscal accusation arsenic occurred here."

One of Bankman-Fried's closest confidants was Caroline Ellison, the ex-CEO of Alameda Research, who helium erstwhile dated. The brace would often spell connected luncheon walks astir FTX's fenced-in Nassau headquarters, 1 FTX enforcement said.

Outside of his Bahamas cohort, Bankman-Fried went to large lengths to debar speaking to others and helium stayed distant from face-to-face confrontations, preferring the encrypted messaging app Signal oregon Slack, 1 apical lawman said. He often ignored messages from C-level executives if helium disagreed with them.

Another erstwhile insider said employees were acrophobic of Bankman-Fried, adding that "there were precise fewer radical who were consenting to situation Sam."

WATCH: Bankman-Fried said helium didn't ever effort to perpetrate fraud connected anyone