From the NY Times to WaPo, the media is fawning over Bankman-Fried
Nearly three weeks have passed since FTX founder Sam “SBF” Bankman-Fried announced that his exchange was facing a deep liquidity crisis, was unable to find a last-minute bailout, and was forced to file for Chapter 11 bankruptcy. The insolvency impacted millions of investors, leaving many portfolios completely wiped out.
Bankman-Fried has openly admitted that FTX loaned customer deposits to Alameda Research, FTX’s sister hedge fund, although he has characterized this as a mistake that was caused by “confusing internal labeling.” FTX’s terms of service explicitly state that customer funds will never be lent to other financial institutions or used by FTX for proprietary trades. Sam publicly stated in a now-deleted tweet, “We don’t invest client assets (even in treasuries).”
The broader crypto markets have bled red in response, and other industry stalwarts now face insolvency risk with the contagion spreading to Genesis, Grayscale and many other firms that held assets on FTX or were owed money by Alameda Research.
Related: The fall of FTX and Sam Bankman-Fried might be good for crypto
FTX’s new turnaround CEO John Ray III stated in court documents, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” In the same court documents, FTX admitted that it may have more than 1 million creditors, the majority of whom were users who lost money when SBF took it and loaned it to Alameda Research for its proprietary trading business.
In the wake of Bankman-Fried’s actions, it’s deeply appalling that mainstream media outlets like The Wall Street Journal, The New York Times, The Washington Post, Forbes, and many others have covered the
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