Perhaps no one in the history of finance has been more predisposed to gamble on redemption than Sam Bankman-Fried, but his lawyers disagreed. The New York Times reports:
“As the crisis unfolded, a group of FTX lawyers and executives moved to strip authority from Mr. Bankman-Fried and urged the company’s top leaders to prepare for bankruptcy. For days, Mr. Bankman-Fried ignored their warnings and clung to power, seemingly convinced that he could save the firm, despite mounting evidence to the contrary….”
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That checks out: The risk-neutral traders wanted to keep trying; the lawyer did not. I have to say that the likelihood of a rescue on Nov. 10 struck me as … very very close to 0% … but then I was trained as a lawyer and did not quit my job to move to an island and start a crypto exchange. Nor did I quit my job to become a top lawyer for someone who had done that! Seems stressful.
Source: Further FTX Flailing – Bloomberg
