A Sam Bankman-Fried Media Reckoning Is Underway

Last week when Sam Bankman FriedCrypto exchange FTX imploded, a journalist testified forbes sent him an email. A year earlier, the magazine had put Bankman-Fried—or SBF, as it’s known—on the cover of its yearbook forbes 400 issue in which a profile hailed him as “the richest 29-year-old in the world”. He was worth $22.5 billion. Now, Chase Peterson-Withorn, who co-authored the story, wrote to Bankman-Fried to inform him that the publication was planning to delist him as he had lost almost all of his money in days amid a liquidity crisis after FTX allegedly expended billions US dollars worth of client assets to fund bets from Alameda Research, a sister trading firm.

“He hadn’t really spoken to anyone,” Peterson-Withorn told me. “He probably worked hard to save FTX and FTX US and Alameda and all that money from his investors and his clients’ funds.” Which is why the journalist was surprised to get an email back on this comparatively trivial matter. Bankman-Fried said he couldn’t “confidently deny” he’s not a billionaire anymore because he’s “not quite clear” about his net worth at the moment. That was two days before FTX, which was once valued at $32 billion, would file for bankruptcy. “He talks when other people wouldn’t,” noted Peterson-Withorn.

In fact, Bankman-Fried can’t stop talking even though he’s now under federal investigation. A few days later he was on the phone until after midnight New York Times reporter David Yaffe-Bellany. And a few days after that, he sent Vox a DM Kelsey Piper, another proponent of effective altruism to try to explain, leaving Piper “appalled by much of what he said.” “Every single decision seemed good and I didn’t realize until the end how big the sum was,” Bankman-Fried wrote at one point. (On another: “Fuck Regulators.” Hours later, he attempted to retract some of those comments.)

Courtesy of Fortune; Cover photo by Spencer Heyfron.

Bankman-Fried’s meteoric rise played out in the media—and now the same is happening with his downfall. A few months ago he graced the cover of wealth In addition to the question “The Next Warren Buffett?” jeff john roberts, Who wrote this cover story written down in the past week how “strange it felt” to now write about the possibility that his subject could go to jail. When asked later on Twitter what he would have changed about his approach, Roberts replied answered: “Easier and easier in hindsight, but … I would have pushed more for documents. I asked her but didn’t insist.”

The unraveling of one of the world’s largest cryptocurrency exchanges and the shattered mythology of its leader has already drawn scrutiny from the media, which has previously faced criticism for propping up previous business or technology prodigies like Theranos Elizabeth Holmes. And coverage of Bankman-Fried expanded well beyond the business section as his standing in Washington grew — not only as one of the Democrats’ biggest donors, but also as a voice in Capitol Hill’s political discussions of crypto regulation. Journalists are not only faced with questions about past reporting; the Times was accused this week for failing to press Bankman-Fried hard enough during Sunday’s interview, with Gizmodo calling the article “bizarre softball.”

frank chaparro, Editor at crypto news firm The Block, said the media played a role in confirming Bankman-Fried “as a serious, honest market player,” along with key players publicly associated with FTX – from leading venture capital firms (Sequoia, SoftBank) to blue-chip investors (Alan Howard, Paul Tudor Jones) to the NFL star tom brady, who starred in an advertising campaign for the company. “It’s very difficult to pinpoint exactly what created that legitimacy in the beginning, but when it started snowing, I mean – people trust Tom Brady. People trust CFTC officers. trust people wealth magazine,” Chaparro said.

The extent of the damage is just beginning to come into focus. The first detailed look at FTX’s business came in a bankruptcy filing on Thursday, in which the newly appointed CEO John J Ray, who has overseen large-scale bankruptcies, including Enron’s, said he had never seen “such a complete failure of corporate controls.” Hundreds of thousands of people could be affected. More revelations are sure to follow. (Bankman-Fried has claimed that FTX did not invest customer deposits directly, and in the Vox interview he blamed FTX’s losses on “messy accounting.”)

“There were a lot of people along the way who believed in him and the media portrayal of him reflects that,” he said forbes‘s Peterson-Withorn, adding, “The media didn’t invent Sam Bankman-Fried. At the time there were all these investors throwing big bucks behind him and wasting praise and celebrities running high profile ads using FTX forbes put it on the cover. “As soon as everyone else is on board,” he said, “then we’ll start.”

Journalists may not have invented Bankman-Fried, but he seemed irresistible to profile writers and television bookers (and apparently authors such as Michael Lewis spent the last six months or so embedded with him). His quirkiness has been emphasized in various profiles (including one commissioned by Sequoia for his website) – a vegan crypto mogul with unusual sleeping habits (on a beanbag in the office when not in the penthouse in the Bahamas when he was about 10 shared with roommates) and a penchant for wearing shorts and playing video games. There is a revealing moment in one such profile published in Times in May, in which Bankman-Fried’s colleague recalled how he once suggested that the FTX co-founder cut his hair before a TV appearance, to which Bankman-Fried reportedly responded, “I think it’s important that people think I look crazy.” Knowing how to use the media to his advantage, Bankman-Fried also donated to non-profit investigative firm ProPublica and invested in the newly formed Semafor — while reportedly unsuccessfully trying to scam journalists to bring court Matt Yglesias and Nat silver for a substack competitor.

For all his eccentricities, Bankman-Fried was also personable and seemingly genuine, which certainly helped charm the media. “I interviewed SBF at Coindesk’s Consensus event in NYC in early 2018 before anyone knew who he was,” the reporter said ian allison, whose story about Alameda’s balance sheet for crypto news site Coindesk sparked FTX’s collapse. “I remember he spoke very quickly and was passionate about trading techniques, many of which I have surpassed,” but “he struck me as a decent guy, and also kind and patient, explaining things to me, etc.”

Peterson-Withorn said Bankman-Fried “at least gave the impression of being very accommodating,” noting how “if you’re someone who always answers the phone, you can help shape the narrative.” He would be in touch with reporters live and on the air and talk about everything from politics on down Meet the press on crypto regulation and Russian oligarchs on CNBC. “There was this level of flexibility in terms of forecasts that would interest him that got him in front of a lot of people, a lot of journalists,” Chaparro said. “When he became a multi-billionaire, I always thought: Why is he still doing this? Why is he still speaking to reporters literally every day? Shouldn’t he run the company?”

It’s not that nobody asked questions; already 2019, Chaparro pressed Bankman-Fried on potential conflicts of interest between Alameda and FTX. “But COVID and the resulting period of go-go momentum I think has created the perfect opportunity for someone like this to rise to the top without being challenged,” Chaparro told me. In an April interview that has been circulating for the past few days, Bloomberg has Opinion columnist Matt Levine suggests that Bankman-Fried is “in the Ponzi business,” and he doesn’t entirely disagree.

When I asked Alyson Shontel, wealth‘s editor-in-chief on the media’s handling of Bankman-Fried, she referred me to a newsletter she wrote in defense of the August cover. “The best covers visually capture a moment in time and create a cultural icon that represents the leaders and trendsetters of that moment — even if their success is fleeting or their triumphs end in disaster,” she wrote. “I’m proud that we had the foresight to capture SBF at its peak.” In an email, Shontell noted that Bankman-Fried magazine hadn’t named the next Warren Buffett — which had been suggested by a longtime crypto insider was — and that the cover, under that provocative question, said how Bankman-Fried still “crash and burn.”

https://www.vanityfair.com/news/2022/11/a-sam-bankman-fried-media-reckoning-is-underway A Sam Bankman-Fried Media Reckoning Is Underway

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