September 16th CNBC’s “Squawk Box” aired a segment on Sam Bankman-Fried — CEO, at the time, of cryptocurrency exchange FTX — and his recent eruption of acquisitions in the wake of an industry downturn. “They call it JPMorgan Cryptocurrency, right?” the host asked, comparing Bankman Fried to a financier with so much money that he supported countless failed banks in order to stabilize the entire financial sector. “The White Knight of Crypto,” read the text at the bottom of the screen.
During a shot Bankman-Fried running in a parking lot of the Bahamas, a reporter repeated facts I’ve come to call Sam Bankman Fried’s Precrash Litany. He is a 30-year-old billionaire who lives in the Bahamas with nine of his roommates and an indol boy. After starting his most renowned company in 2019, he’s become richer and more successful than almost anyone. In an interview, he sat on a chair and talked about the movements that led to the Morgan analogy: self-sacrificing investments his company has made in order to provide an “ecosystem” for cryptocurrency, as he put it.
Two months later, “The White Knight” was thrown in the trash can at work and set ablaze. Cipher publication CoinDesk reported the documents People’s confidence in the Bankman-Fried companies was shaken, and soon everyone but Goldendoodle—investors, customers, and employees—rushed through the doors. Bankman-Fried was quickly removed as CEO, and FTX filed to bankruptcy. The The November 11 edition of “Squawk Box” featured Anthony ScaramucciSkyBridge Capital sold a 30% stake in its fund, to Bankman-Fried at the time of “White Knight” bailout. He said, “I don’t want it to be called fraud right now,” “because that’s actually a lawful term.” You get the feeling that he wanted to call it a fraud, the legal term.
This shift was so rapid, especially in the financial media, that it shocked even the casual observer. This is a 2021 Forbes featured Bankman-FriedThe magazine’s cover featured the 400 Richest Americans list. Inside, there was a large photo that highlighted the young billionaire’s pledges to donate his wealth. Flash forward to last autumn, when the magazine published a video called “‘The Devil in Nerd Clothes’: How Sam Bankman-Fried Fooled Everyone.”
YouTube has a lot of sarcastic comments about Bankman-Fried’s pre-breakup coverage. “Kudos CNBC for meeting a powerful entrepreneur!” On Twitter, angry FTX customers criticized crypto journalists’ perceived failures. However, the media did not have to change its content quickly. It was almost impossible to tell a consistent story about the crash before and after it. Even the most acrimonious commentators can’t pick up on details such as Bankman Fried’s relative lack in philanthropy when compared to all the stories of his grand plans for philanthropy. Beyond isolation, naivety prevailed.
What you need to know about the collapse in FTX
What is FTX? FTX is a bankrupt business now One of the largest cryptocurrency exchanges in the world. Customers can trade cryptocurrencies to other cryptocurrencies or traditional currency; FTT is its original cryptocurrency. The Bahamas-based company specializes in trading risky options that are not legal in the United States.
All this obfuscation may make it difficult to tell accurate stories. We can only drive at full throttle or at the roadside, which can cause problems.
Bankman-Fried was determined to remain the main character of this story, even though lawyers had advised against it. He gave numerous taped interviews and appeared in DealBook Summit in The Times.The epic of its ups, downs has grown bigger and larger in part because it tells an uncommon crypto story: one that is accessible to all who are not interested in cryptocurrency. He was a budding philanthropist on his way to the top. It was proof to all who wanted it that cryptocurrency was not a game of chance. Mid-December It was caught in the BahamasThe mega-financial thriller, which was accused of a number of frauds in the United States of America, became a legal movie.
WeWork, Theranos, and many other companies Dotcom Beginnings and Pre2008 Financial Instruments: Nearly all of them began as exciting business stories about people or companies that were poised to transform their industries in new ways and had the capital and growth to prove it. These articles were continued until the company collapsed due to fraud, incompetence or recklessness. Whom the gods will kill Paul Krugman wrote in a 2001 Times column about Enron,They first appeared on Business Week’s cover.
These kinds of temptingly optimistic prospects — promises like painless blood tests or community-building office space — naturally attract attention, but they are also at the heart of deception and fraud. The worst stories about bad people may not be as much about how easy it can be to conceal ancillary data that might reveal the difference. Public companies based within the US must open their books to investors on a regular basis. Private companies, particularly those based abroad, are not subject to this obligation. Private wealth has increased in the past 20 years and so has the number if private companies. A SEC official recently warned that this is a growing sector of the economy. This could lead to fraud or gross negligence. John Jay Ray III, the man brought in to clean up after Bankman-Fried — the man assigned to the same job in Enron’s bankruptcy announcement — said he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information.” While it is possible that people outside the company failed to do their due diligence, it is not impossible for them to have done so.
All this obfuscation can make it difficult to tell accurate stories. There are only two speeds available: full throttle or roadside car fire. Few people are aware of the FTX support story. Bankman-Fried was given billions by the public, which gave him newsworthy power. Money fled when the public stopped buying this story. His strength rested on faith, which is a poorly reported proposition in media coverage. Bankman-Fried stated that he was against filing for bankruptcy. This is a process that exposes a lot of information in public filings. He believed that if he could win back people’s faith, then everything would be okay.
Bankman Fried no longer seems like the main character in his tale, but more like an empty vessel into the which people pour torrents upon cash, hoping to create the cryptic world they dream of. The problem is that, even if the story about Fried was incorrect, there was still a story to tell. His success was enough to change the world as it was. However, almost everyone didn’t have the information necessary to make the story more accurate or to reveal what led to this success. We got a praise story, followed by a lot of schadenfreude. There’s always next.
Photo credit: Jeenah moon/Bloomberg via Getty Images; Alex Wong/Getty Images
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