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



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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 acknowledged in a now-deleted tweet, “We don’t make investments shopper property (even in treasuries).”

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

FTX’s new turnaround CEO John Ray III acknowledged in court docket paperwork, “By no means in my profession have I seen such a whole failure of company controls and such a whole absence of reliable monetary info as occurred right here.” In the identical court docket paperwork, FTX admitted that it might have greater than 1 million collectors, nearly all of whom had 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 Road Journal, The New York Instances, The Washington Put up, Forbes, and plenty of others have coated the FTX scandal and ensuing meltdown with kiddy gloves, refusing to name out Bankman-Fried and his internal circle for utilizing and abusing buyer funds.

As a substitute, these publications have largely framed the FTX catastrophe as a sequence of sincere errors by overly formidable and quirky entrepreneurs that adhere to the efficient altruism motion. Bankman-Fried and insiders like Caroline Ellison, former CEO of Alameda Analysis, had been merely attempting to do good for the world and can not be capable of see their benevolent aspirations via.

The Wall Road Journal, for example, revealed an article targeted totally on Bankman-Fried’s charitable aspirations — whereas calmly glossing over the truth that he misused buyer funds:

Bankman-Fried has mentioned his law-professor mother and father instilled in him an curiosity in utilitarianism, the philosophy of attempting to do the best good for the best variety of folks. He mentioned he began placing these beliefs into observe whereas majoring in physics at MIT. Involved with the struggling of animals on manufacturing unit 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 acquire on promised grants:

“The collapse of Mr. Bankman-Fried’s empire has reverberated properly past its Bahamas base, via the halls of academia and pioneering laboratories world wide. A number of grant recipients […] had been nonetheless owed funds when FTX failed, based on folks aware of 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 had been stolen from FTX prospects who had been promised their deposits had been protected.

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

A Washington Put up assessment of lobbying disclosures, federal data and different sources discovered that the brothers and their community have spent no less than $70 million since October 2021 on analysis tasks, marketing campaign donations and different initiatives supposed to enhance biosecurity and stop the following pandemic.

The publication omitted the truth that charitable donations had been, the truth is, funded by cash SBF obtained from prospects. The article additional lamented that the brothers will not be capable of fund their pandemic-related philanthropic efforts:

However the sudden collapse of FTX, which filed for chapter final Friday after experiences that buyer funds had 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. Tens of millions of individuals misplaced their cash by trusting FTX to custody their crypto. Firms utilizing FTX to carry their company treasuries are actually going underneath. 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 formidable however overextended entrepreneur who made errors however did so legally. With a bit of bit extra oversight or maybe a bigger staff, they suggested, these pricey errors could have been averted. They even described SBF as a philanthropist who let his charitable ambitions get too giant:

At the same time as he saved hiring down, Mr. Bankman-Fried constructed an formidable 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 so much much less.’

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

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

In a follow-up submit, the NYT explored SBF’s political and charitable contributions in depth, describing the now-shamed entrepreneur because the Democratic Occasion’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 corporations funded by FTX or its executives labored to court docket politicians, regulators and others within the coverage orbit, with the aim of creating Mr. Bankman-Fried the authoritative voice of crypto, whereas additionally shaping regulation for the trade and different causes, based on 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 had been stolen from customers to prop up FTX’s fairness worth or FTT’s value which are then used for political and charitable donations needs to be clawed again. Put merely, the cash was not Bankman-Fried’s to present.

Forbes wrote the same 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 also be one of many supporting gamers in Sam Bankman-Fried’s FTX disaster.

The article went on to profile her ascension from star pupil at Stanford to Alameda Analysis, the place she finally took the reins on the proprietary buying and selling agency. It mentioned her penchant for math, polyamory and, after all, efficient altruism. It additionally advised she stands out as the scapegoat for the downfall of Alameda:

Most of the individuals who have flocked to Ellison’s protection collect on Urbit, a peer-to-peer platform […], one among her on-line supporters informed 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 needs to be accountable to increased requirements of journalism than we’ve seen on this protection. Too many shops 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 trade and extends into the mainstream media. We want stronger citizen journalism to get the total reality 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 via 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 basic info 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.

Practically 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 compelled to file for Chapter 11 chapter. The insolvency impacted tens of millions of traders, leaving many portfolios fully worn out.




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