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From the NY Times to WaPo, the media is fawning over Bankman-Fried

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Almost three weeks have handed since FTX founder Sam “SBF” Bankman-Fried introduced that his alternate was dealing with a deep liquidity disaster, was unable to discover a last-minute bailout, and was pressured to file for Chapter 11 chapter. The insolvency impacted thousands and thousands of traders, leaving many portfolios utterly worn out.

Bankman-Fried has overtly admitted that FTX loaned buyer deposits to Alameda Analysis, FTX’s sister hedge fund, though he has characterised this as a mistake that was brought on by “complicated inside labeling.” FTX’s phrases of service explicitly state that buyer funds won’t ever be lent to different monetary establishments or utilized by FTX for proprietary trades. Sam publicly said in a now-deleted tweet, “We don’t make investments consumer property (even in treasuries).”

The broader crypto markets have bled pink in response, and different business stalwarts now face insolvency threat with the contagion spreading to Genesis, Grayscale and plenty of different companies that held property on FTX or have been owed cash by Alameda Analysis.

Associated: The fall of FTX and Sam Bankman-Fried might be good for crypto

FTX’s new turnaround CEO John Ray III said in courtroom paperwork, “By no means in my profession have I seen such an entire failure of company controls and such an entire absence of reliable monetary data as occurred right here.” In the identical courtroom paperwork, FTX admitted that it could have greater than 1 million collectors, the vast majority of whom have been customers who misplaced cash when SBF took it and loaned it to Alameda Analysis for its proprietary buying and selling enterprise.

Within the wake of Bankman-Fried’s actions, it’s deeply appalling that mainstream media shops like The Wall Avenue Journal, The New York Instances, The Washington Submit, Forbes, and plenty of others have lined the FTX scandal and ensuing meltdown with kiddy gloves, refusing to name out Bankman-Fried and his interior circle for utilizing and abusing buyer funds.

As an alternative, these publications have largely framed the FTX catastrophe as a sequence of sincere errors by overly bold and quirky entrepreneurs that adhere to the efficient altruism motion. Bankman-Fried and insiders like Caroline Ellison, former CEO of Alameda Analysis, have been merely making an attempt to do good for the world and can not have the ability to see their benevolent aspirations by way of.

The Wall Avenue Journal, as an example, published an article targeted totally on Bankman-Fried’s charitable aspirations — whereas evenly glossing over the truth that he misused buyer funds:

Bankman-Fried has mentioned his law-professor dad and mom instilled in him an curiosity in utilitarianism, the philosophy of making an attempt to do the best good for the best variety of individuals. He mentioned he began placing these beliefs into observe whereas majoring in physics at MIT. Involved with the struggling of animals on manufacturing facility farms, he mentioned, he stopped consuming meat.

The WSJ additionally delved into the FTX Basis and its Future Fund (a nonprofit arm of FTX), discussing what number of good causes are not capable of accumulate on promised grants:

Associated: Will SBF face consequences for mismanaging FTX? Don’t count on it

“The collapse of Mr. Bankman-Fried’s empire has reverberated nicely past its Bahamas base, by way of the halls of academia and pioneering laboratories world wide. A number of grant recipients […] have been nonetheless owed funds when FTX failed, in keeping with individuals accustomed to the matter.”

Not as soon as did the WSJ condemn Bankman-Fried for his actions. Whereas it mentioned multi-million greenback losses that charitable causes have suffered, it failed to say the a number of billions that have been stolen from FTX prospects who have been promised their deposits have been protected.

Equally, The Washington Submit reported that Sam Bankman-Fried and his brother Gabe needed to make a distinction after the worldwide pandemic rocked the world in 2020:

A Washington Submit evaluation of lobbying disclosures, federal data and different sources discovered that the brothers and their community have spent a minimum of $70 million since October 2021 on analysis initiatives, marketing campaign donations and different initiatives supposed to enhance biosecurity and forestall the following pandemic.

The publication omitted the truth that charitable donations have been, in truth, funded by cash SBF obtained from prospects. The article additional lamented that the brothers will not have the ability to fund their pandemic-related philanthropic efforts:

However the sudden collapse of FTX, which filed for chapter final Friday after experiences that buyer funds have been getting used to prop up a sister buying and selling agency, has sparked a monetary contagion anticipated to doom the brothers’ pandemic-prevention agenda.

Sadly, the affect of FTX collapsing goes far past negatively impacting pandemic-prevention funding. Hundreds of thousands of individuals misplaced their cash by trusting FTX to custody their crypto. Corporations utilizing FTX to carry their company treasuries are actually going below. Hedge funds, enterprise capitals, and centralized finance platforms have all been severely crippled, with some traders which have in any other case outperformed the market now dealing with 50% losses due to the embezzling of their funds.

Maybe essentially the most egregious experiences have come from The New York Instances. In a single extensively criticized puff piece, the creator painted an image of an bold however overextended entrepreneur who made errors however did so legally. With a bit bit extra oversight or maybe a bigger workforce, they suggested, these pricey errors might have been averted. They even described SBF as a philanthropist who let his charitable ambitions get too massive:

At the same time as he stored hiring down, Mr. Bankman-Fried constructed an bold philanthropic operation, invested in dozens of different crypto firms, purchased inventory within the buying and selling agency Robinhood, donated to political campaigns, gave media interviews and provided Elon Musk billions of {dollars} to assist finance the mogul’s Twitter takeover. Mr. Bankman-Fried mentioned he wished ‘we’d bitten off lots much less.’

The downright offensive reporting painted the embattled ex-CEO as merely being too busy and overworked to correctly monitor what was occurring in his firms.

FTX and Alameda Analysis are described as intently linked. Nevertheless, they don’t seem to be described as associated events that ought to have clear restrictions when doing enterprise with each other. In no world was it applicable to commingle funds between the 2 events when FTX’s property have been primarily buyer funds. As an alternative, the article defined Bankman-Fried’s protection of the muddied relationship by stating that Alameda is a vital market maker and liquidity supplier to FTX.

Associated: My story of telling the SEC ‘I told you so’ on FTX

In a follow-up post, the NYT explored SBF’s political and charitable contributions in depth, describing the now-shamed entrepreneur because the Democratic Get together’s second-largest donor behind George Soros, and depicting his broad affect on politics and regulation:

A community of political motion committees, nonprofits and consulting companies funded by FTX or its executives labored to courtroom politicians, regulators and others within the coverage orbit, with the objective of constructing Mr. Bankman-Fried the authoritative voice of crypto, whereas additionally shaping regulation for the business and different causes, in keeping with interviews, electronic mail exchanges and an encrypted group chat seen by The New York Instances.

Amid the dialogue of his quite a few donations, the article by no means as soon as posited the place Bankman-Fried’s beneficiant funding got here from. There isn’t any point out that FTX and Alameda are actually bankrupt, and that many lives are ruined. Funds that have been stolen from customers to prop up FTX’s fairness worth or FTT’s value which can be then used for political and charitable donations ought to be clawed again. Put merely, the cash was not Bankman-Fried’s to present.

Forbes wrote a similar puff piece on the opposite antagonist within the FTX downfall and former CEO of Alameda Analysis, Caroline Ellison. It led with effusive compliments for the now-fired government:

Alameda Analysis CEO Caroline Ellison is a math whiz who loves Harry Potter, fringe political philosophy and taking huge dangers. She can be one of many supporting gamers in Sam Bankman-Fried’s FTX disaster.

The article went on to profile her ascension from star scholar at Stanford to Alameda Analysis, the place she ultimately took the reins on the proprietary buying and selling agency. It mentioned her penchant for math, polyamory and, after all, efficient altruism. It additionally instructed she often is the scapegoat for the downfall of Alameda:

Lots of the individuals who have flocked to Ellison’s protection collect on Urbit, a peer-to-peer platform […], one among her on-line supporters advised Forbes. They suppose Ellison was set as much as be the autumn individual, and declare that former co-CEO Sam Trabucco, who they derisively name ‘Sam Tabasco,’ is behind Alameda’s implosion.

Forbes hinted that Ellison may flee Hong Kong for Dubai, however did little in assigning accountability to the previous CEO. It blatantly omitted the truth that she was on the helm of disastrous buying and selling and threat administration at Alameda, together with her involvement in transferring FTX buyer funds to Alameda to backstop her buying and selling losses.

The mainstream media ought to be accountable to increased requirements of journalism than we’ve seen on this protection. Too many retailers have compromised the veracity of their reporting, maybe as a result of their reporters share Bankman-Fried’s left-leaning politics.

It’s clear Bankman-Fried’s affect reaches far past the crypto business and extends into the mainstream media. We want stronger citizen journalism to get the complete fact out, and we should collectively ensure that the previous billionaire is held accountable for his actions.

Matthew Liu is the co-founder of Origin Protocol, a blockchain platform that brings NFTs and DeFi to the plenty by way of its two flagship merchandise, Origin Story (story.xyz) and Origin Greenback (ousd.com). A serial entrepreneur, he beforehand co-founded PriceSlash (acquired by BillShark) and Unicycle Labs. He was one of many earliest PMs at YouTube earlier than it was acquired by Google, and in addition served as VP of Product at Qwiki (acquired by Yahoo!) and Bonobos (acquired by Walmart). He purchased his first BTC in 2012 and took part within the Ethereum crowdsale in 2014.

This text is for common data functions and isn’t supposed to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the creator’s alone and don’t essentially replicate or characterize the views and opinions of Cointelegraph.



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