The Bankman-Fried media apology tour
Reporters show a conspicuous lack of outrage at a massive fraud
Sam Bankman-Fried, the former CEO of FTX, a major crypto exchange, cost many Americans their life savings. That would seem to be a reputational problem, to say the least, but Bankman-Fried is now doing a media apology tour. Members of the press went to the Bahamas, engaged in therapeutic interview sessions, and never did seem to express any outrage over what Bankman-Fried did. The public should be wary of the press in these situations and Christians should be reminded of the Satires of Juvenal and his now famous line, “Who will guard the guards themselves?”
The answer, it seems, is not the press.
FTX was a crypto-currency exchange. The rarely understood currency that cannot buy much beyond other currencies could be converted (so it was promised) to recognizable money or other crypto-currencies on FTX. FTX started as part of a company called Alameda Research, the latter spinning off the former as its own Bahamas-based corporation. Bankman-Fried owned the controlling interest in both and was CEO of FTX.
As cryptocurrency exploded among some as the next path to wealth, Bankman-Fried and his two companies got extremely wealthy. FTX got naming rights to a Miami arena. Celebrities touted FTX. Bankman-Fried became a sought-after speaker whose childish, unkempt appearance got him compared to early tech entrepreneurs.
Behind the scenes, Alameda Research developed a growing conflict of interest with FTX, being given both priority trading and exemptions from various rules to operate on FTX. Multiple independent reporters began raising red flags about FTX and Alameda Research. In short, the math simply did not add up.
Unfortunately, the mainstream business press that had been celebrating Bankman-Fried was not interested in digging deeply into the reported problems. Why would they? FTX sponsored their conferences. Bankman-Fried’s parents were law professors, and his mother was a pioneering financial bundler to the Democratic Party. Bankman-Fried became one of the largest donors to the Democrats and the largest single donor to the Democrats for 2022. FTX’s ESG score was higher than Exxon-Mobil and Bankman-Fried espoused all the right, true, and virtuous progressive talking points.
In 2022, FTX lent $10 billion in its customers’ funds to Alameda Research. Alameda’s CEO, Caroline Ellison, used the money to pay back loans Alameda had used to make investments through FTX. Ellison and Bankman-Fried were in a relationship even as she blogged about her polyamory.
In recent weeks, as crypto-currency began collapsing, FTX and Alameda Research also began collapsing. By November, the media organizations that had long praised Bankman-Fried and sought sponsorships from FTX could not ignore the situation. The entire enterprise collapsed, both companies headed to bankruptcy, and customers could not withdraw their funds. Many investors lost significant money—and we mean significant money. Celebrities who advertised for FTX, including football star Tom Brady, are now being sued.
It did not have to be this way.
More than one independent journalist had been on the story. But Bankman-Fried had been the star of various media parties, FTX had sponsored various sporting venues and media conferences, and the press yet again was blinded by celebrities with money to throw at them.
At the end of November, with the collapse of his empire now undeniable, Bankman-Fried summoned various reporters to the Bahamas. He did a sit-down interview with George Stephanopoulos of ABC News. Even he said the interview seemed part therapy session. Bankman-Fried claimed he had not committed fraud; he had just been dumb. Bankman-Fried had attended Canada/USA Mathcamp, a math camp for gifted high school students. He graduated from Massachusetts Institute of Technology with a major in physics and a minor in math. But “dumb” is his defense along with an admission he “got cocky.”
The various reporters who interviewed the disgraced and discredited CEO never seemed all that outraged. The media strategy, to a degree, was smart. Stephanopoulos and others got to go to the Bahamas and hang out with the man and his parents. Bankman-Fried used his youthful, disheveled looks to make an “oops, I’m just a kid who got cocky” defense. The reporters who interviewed him had shown more righteous indignation that Ron DeSantis had not forcefully denounced Donald Trump meeting with Kanye West than they did Bankman-Fried wiping out people’s life savings. The whirlwind interviews ended with an appearance at the New York Times’ DealBook Summit. The audience applauded Bankman-Fried.
The American press is a for-profit endeavor, but profits are lagging. Recently, Politico shuttered a tech outlet it had launched. CNN engaged in more layoffs and restructuring. The Recount went out of business. The Washington Post closed its Sunday magazine. Parade, the longtime weekend newspaper insert, went out of business.
These developments show the need for more and more discernment. The media simply cannot be trusted to properly vet those who subsidize their ventures. Accountability is on the decline. The watchdogs of democracy have no interest in watching the disrupters of democracy or markets who write them checks. Reputation is nothing if a media institution cannot make payroll.
We should all be more wary of those selling us nontraditional paths to wealth like young crypto pioneers. We also must be wary of a press that fawns over them. The ever-quickening pace of the world makes it harder to discern and trust and we must be careful in determining which voices to trust. Harder, yes, but all the more urgent.
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