THE 21st CENTURY ISN’T TURNING OUT AS I HAD EXPECTED: Justin Bieber bought a Bored Ape NFT in January for $1.3 million that’s likely worth about $70,000 in the wake of the FTX collapse.
At least he can be comforted by the beautiful aesthetics of the underlying illustration
One of the most striking things about the collapse of crypto exchange FTX, once counted among the world’s largest, is the extent to which it caught the supposed watchdogs of the tech industry by surprise. How could Sam Bankman-Fried, the brainiac financial visionary, crowned earlier this year the “crypto emperor” by The New York Times, have steered his armada of crypto firms into the rocks so recklessly? With allegations of an enormous, brazen fraud lingering, the first place to look is at the central role of the media in this fiasco. Through an almost endless churn of fawning coverage, the news media turned an inexperienced—and, it seems, ethically deranged—trader into the second coming of Warren Buffett.
Over the past two years, Bankman-Fried cultivated the media lavishly, if not carefully. Drawing on what then seemed like an unlimited pool of cash, SBF (as we’ll call the mythologized version of the real person) dispersed investments, advertising dollars, sponsorships, and donations to key news outlets—including ProPublica, Vox, Semafor, and The Intercept—with extraordinary effectiveness.
Bankman-Fried’s head has filled the frame of the most coveted business news covers in the world, including Fortune (“The next Warren Buffett?”) and Forbes (“Only Zuck has been as rich (23 billion) this young (29)!”). CNBC star Jim Cramer once comparedBankman-Fried, who has been active in crypto finance for only a handful of years, to John Pierpont Morgan, the giant of industry who worked in banking for nearly four decades before striking out on his own.
Remarkably, some major news outlets have continued to round the edges of the SBF myth, even after the discovery of at least a billion-dollar hole in FTX’s books, the assets seeming to vanish into the crypto ether. This week, Twitter erupted in outrage when The New York Times published what many have described as a “puff piece” on Bankman-Fried, whose whereabouts remain unknown.
The Times story on Bankman-Fried, who allegedly funneled FTX customer money into his private hedge fund, Alameda Research, is couched in passive, soft-touch language reflected even in the headline: “How Sam Bankman-Fried’s Crypto Empire Collapsed.” The Times pieces describes Bankman-Fried’s misallocation of funds—which, if true, amounts to mass-scale fraud—in terms that remove active agency, writing: “Alameda had accumulated a large ‘margin position’ on FTX, essentially meaning it had borrowed funds from the exchange, Mr. Bankman-Fried said.” The piece, which describes Bankman-Fried as “surprisingly calm,” lays little to no blame at SBF’s feet, writing that FTX “lent as much as $10 billion to Alameda.” In contrast, business writer Trung Phan noted in a widely shared tweet that “fraud,” “crime,” “stolen,” “theft,” “criminal,” and “hidden,” make no appearance amid the article’s 2,000-plus word count.
But if critics found the recent Timesarticle full of off-the-charts puffery, previous coverage makes this latest, post-FTX collapse piece look like searing investigative journalism. A May 2022 article by the same writer, The New York Times’ David Yaffe-Bellany, titled “A Crypto Emperor’s Vision: No Pants, His Rules,” jump-cuts from rapt audiences “roaring” with laughter at Bankman-Fried’s wit to his penchant for living “modestly” (in a $40 million Bahamas penthouse) to his chummy relationship with Tom Brady that purportedly began with Brady approaching the unassuming Bankman-Fried at a party to talk crypto.
In its flattery, the 3,500-word Timesarticle flipped the famous fable about a naked emperor alluded to in the piece’s headline; rather than showing a naked emperor who thinks he’s elegantly clothed, it paints a picture of a figure we might all consider larger than life but who, by the Times’ account, is just a regular do-gooder whose smarts led him, almost haphazardly, to invent a proprietary money-printing machine.
And now that the ride is over, Bankman-Fried has dropped the mask: Sam Bankman-Fried tries to explain himself.
The collapsed cryptocurrency exchange platform FTX claims former CEO Sam Bankman-Fried ‘hacked’ its systems after filing for bankruptcy to transfer ‘digital assets’ to Bahamian regulators.
FTX lodged the motion in the US Bankruptcy Court in Delaware on Thursday saying it had evidence to suggest the Bahamas government ordered Bankman-Fried, 30, to gain ‘unauthorized access’ while in custody.
‘In connection with investigating a hack on Sunday, November 13, Mr. Bankman-Fried and [FTX co-founder Gary] Wang, stated in recorded and verified texts that ‘Bahamas regulators’ instructed that certain post-petition transfers of Debtor assets be made by Mr. Wang and Mr. Bankman-Fried (who the Debtors understand were both effectively in the custody of Bahamas authorities) and that such assets were ‘custodied on FireBlocks under control of Bahamian gov’t,’ the filing states.
Meanwhile, in the “it’s not a cult” category: Sam Bankman-Fried ex Caroline Ellison made ‘foray’ into ‘Chinese harem’ polyamory.
Disgraced Alameda Research CEO Caroline Ellison penned graphic blog posts about polyamory and masochism before the implosion of her FTX-linked cryptocurrency hedge fund.
Ellison — who dated FTX founder Sam Bankman-Fried — wrote candidly about her “‘foray into poly” on her now-deleted Tumblr account back in February 2020, according to the Daily Mail.
The post — along with a series of other sexualized entries — was unearthed by the tabloid just days after CoinDesk claimed Ellison, 28, and Bankman-Fried, 30, were part of a 10-person “cabal of roommates” that managed operations for FTX and Alameda from a luxury penthouse in the Bahamas. CoinDesk claimed the group “are, or used to be, in romantic relationships with each other.”
“When I first started my foray into poly, I thought of it as a radical break from my trad past,” Ellison allegedly wrote in the Tumblr entry. “But tbh I’ve come to decide the only acceptable style of poly is best characterized as something like ‘imperial Chinese harem.’ “
The Stanford grad continued, “None of this non-hierarchical bulls–t; everyone should have a ranking of their partners, people should know where they fall on the ranking, and there should be vicious power struggles for the higher ranks.”
Finally (for now): Sam Bankman-Fried’s media outlets must come clean.
[S]ince the scandal broke, Bankman-Fried has been treated to two relative puff pieces on his philanthropic efforts in the Washington Post and the New York Times. Both drew severe backlash on social media for seeming to handle him with kid gloves.
The coverage of Bankman-Fried and the FTX collapse, which has resulted in the disappearance of millions of dollars invested into FTX and crypto currencies, must be called into question, given his connections and donations to corporate media outlets. A media storyline is forming that while Bankman-Fried did lose billions almost overnight of FTX user and investment money, his heart is still in the right place when it comes to fighting for the same global causes that liberal editorial boards agree with.
Putting it bluntly — every media organization that accepted funding from Bankman-Fried should come clean and offer full transparency as to the nature of their agreement with him and their financial arrangements. As Semafor’s Max Tani reported, these grants and their funding mechanisms have been put on hold. ProPublica announced that they had received “the first tranche of the $5 million grant in February of 2022. The remaining two-thirds of the grant are due, respectively by April 1, 2023 and by April 1, 2024.” Happy April Fools’ Day indeed.
This WaPo headline on FTX — writtenafter its collapse — is an absolute classic: