How a scoop by a little-known crypto site led to the fall of Sam Bankman-Fried and implosion of FTX | CNN Business

11/24/2022 8:15:00 PM

How a scoop by a little-known crypto site led to the fall of Sam Bankman-Fried and implosion of FTX

How a scoop by a little-known crypto site led to the fall of Sam Bankman-Fried and implosion of FTX

The staggering level of apparent deception staged by former crypto king Sam Bankman-Fried wasn't uncovered by government investigators or a major powerhouse financial news organization, such as The Wall Street Journal.

The staggering level of apparent deception staged by former crypto king Sam Bankman-Fried wasn’t uncovered by government investigators or a major powerhouse financial news organization, such as The Wall Street Journal.didn’t know what a blockchain was when he got started in crypto, which, he also said, was a field made up of projects that were mostly “bullshit.FTX declared bankruptcy earlier this month.offered to buy Twitter for $44 billion, the Tesla CEO texted Bankman-Fried, inviting him to roll over his public Twitter shares into a stake in Musk's privately-held company, the publication reported.

Instead, the public’s first glimpse of the alleged wrongdoing by Bankman-Fried — known to insiders as SBF — came earlier this month from a small news site unknown to much of the public that has spent years chronicling the turbulent and murky world of crypto: CoinDesk.In fact, the reporter and editor duo who worked to break the story, which prompted a stunning cascade of events that led to the evaporation of billions of dollars, didn’t realize the scoop they had on their hands when they first obtained a document that cast tremendous doubt on the stability of SBF’s crypto empire.The world would be better if he, the smartest guy in the room, had more money to distribute, and crypto was the fastest way to get rich.“Hi Nick,” reporter Ian Allison emailed editor Nick Baker about his initial story plan, according to a copy of the message provided to me, “I’m looking at some stuff to do with Alameda if you want to chat this week, no mad rush.The bankrupt entity has an estimated 1 million creditors with losses that could reach several billion dollars.” A version of this article first appeared in the “Reliable Sources” newsletter.What Bankman-Fried stumbled upon, perhaps unwittingly, was the secret to actual crypto evangelism that would convert everyone, from venture-capital firms to the media.Sign up for the daily digest chronicling the evolving media landscape here.Several texts between Musk and Bankman-Fried regarding the Twitter takeover were previously revealed in September during the pretrial discovery process for Twitter's lawsuit against Musk over his attempts to ditch his purchase of the social app.

Allison had obtained a financial document that showed 30-year-old SBF had engaged in shady behavior to use his crypto company, FTX, to prop up his separate investment firm, Alameda.Instead, you had to convince people that you hated crypto for all the same reasons they did, but that they should invest in it anyway.Sam Bankman-Fried and his associates bought $300 million in luxury real estate.But that wasn’t clear at first glance and it took “a couple days to figure out the story,” Baker recalled to me in a phone call this week.Baker said that both he and Allison “knew that it was an important document to have,” but emphasized that the two had no understanding at first of the massive story that was buried in the spreadsheet of numbers.My friend Aaron Lammer and I made a podcast called “Coin Talk,” where we took a sports-talk-radio approach to all the industry scams, pump and dumps, but also what we saw as the technological and economic potential of Bitcoin, Ethereum, and whatever off-brand coin we had invested in that week.“Did I know that I’d be speaking to you today? Hell no,” Baker candidly told me.The property was identified as a “vacation home” for the family.“I had no expectation that it was going to be that gigantic.Our general ethos at the time was something like “Almost all of this is a money-laundering scam; a small percentage of it is not.

” Over the next couple of days, Baker, from a home office in New York, worked with Allison, who lives in Scotland, to “chisel down” the financial document into a story.On November 2, they hit publish on the explosive report, quickly capturing the attention of the crypto world and shaking the foundation of the mighty exchange FTX.We didn’t have to want the world envisioned by libertarian Bitcoin maximalists, with its deflationary currency and social Darwinian outlook.Albany Bahamas “Since before the bankruptcy proceedings, Mr.SBF, the prolific tweeter, was noticeably silent.“It was something that struck us all internally,” Baker recalled to me.Crypto investors back then also followed a loose set of rules , one of which was to always look at the credentials of “the team” behind a particular crypto project.“Sam, whenever there is a big story about him, he is not shy about tweeting it.In total, the report uncovered records for at least 19 properties with a total value of nearly $121 million.

And his silence was deafening.” I imagine that many credentialled people—tech titans, philosophers, or my colleagues in the media—felt something similar when they decided that Bankman-Fried was somehow different.That was one of the things we were surprised about in the days after.That he didn’t say a thing.Seaside Real Estate The real estate disclosures were among the most notable details to emerge from the hearing during what has already been a chaotic bankruptcy process.” That silence was likely because SBF knew CoinDesk had uncovered something big.And he had good reason to believe that.

The article generated enormous doubt about the health of FTX, spurring an effective rush of investors to suddenly pull funds from the company which put its solvency in danger.Attorneys said the company was investigating the circumstances behind a deal last year in which rival platform Binance sold off its stake in FTX.After the scoop, SBF’s chief competitor, Binance, suggested it would rescue the company through an acquisition.But in a second major scoop that led to FTX’s implosion, Allison learned that the crucial deal would not happen.Baker said it was publishing that story, which he knew would “unleash chaos and destruction” on the crypto world, that made him anxious.At its peak, FTX was once valued at a whopping $40 billion across its US and international properties.“I was nervous,” Baker said.

“It was definitely a cold hands [moment] — not because I thought [the scoop] was wrong, but because I knew it was right.I knew the pain ahead.Seaside Real Estate The chaos began after a CoinDesk report revealed Alameda was heavily invested in FTT, a token offered by FTX.Telling a truthful story has consequences.” Soon after, with the crypto market and his company in chaos, SBF resigned in disgrace and FTX moved to declare bankruptcy, marking one of the most stunning collapses in the history of finance.“There are few parallels for a story with that much impact — and so quick,” Baker said, noting FTX’s undoing occurred at a much greater speed than that of companies such as Enron.” Bankman-Fried has faced intense scrutiny for his personal role in the company’s freefall.

“We dropped the story and in a week and two days they are bankrupt and this leading figure in crypto has fallen.It’s stunning.Truly stunning.I’ve never seen anything like it.”.

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iamsandali inkbacker IanAllison123 CNN oliverdarcy FTX_Official I will find MY TRUTH in a spreadsheet of data. Just you wait. In darkness light will blah blah blah. inkbacker IanAllison123 CNN oliverdarcy FTX_Official So that F...ing ugly .unt Alameda ruined investments while a boy high on speed, crack & cocaine oh himself too surprise surprise suckered the media & politicians that all was under control meanwhile the SEC closed its eyes about a Token that did nothing had no use was sound JFC

inkbacker IanAllison123 CNN oliverdarcy FTX_Official You like how CNN calls you guys “little know crypto site” inkbacker IanAllison123 CNN oliverdarcy FTX_Official Talk about AAXExchange inkbacker IanAllison123 CNN oliverdarcy FTX_Official 👀 BTC $10K below 💯 📈 😩 One more bad news coming and market will be collapsed. are we genesis?

inkbacker IanAllison123 CNN oliverdarcy FTX_Official Atlantis_Ex Scam exchange inkbacker IanAllison123 CNN oliverdarcy FTX_Official And who exactly is in jail? inkbacker IanAllison123 CNN oliverdarcy FTX_Official Because he was dumping money into the well known news orgs that could have exposed him months ago? Is that how it happened? It's CNN so I'm physically incapable of clicking the link

CNN should be taken down with Bankman. You clowns have facilitated all of this outrageous corruption with blatant dishonesty and your blanket support of leftist lawlessness. Good job,CNN! 🏆 Why hasn’t SBF been arrested yet?

Sam Bankman-Fried and the Long Road to Taking Crypto MainstreamSam Bankman-Fried, who founded the cryptocurrency exchange FTX, painted himself as a new type of smart guy who was going to change the world. This type of story has become the perfect vessel for fraud, jaycaspiankang writes. jaycaspiankang Crypto Larper jaycaspiankang Vitalik is the next scamer to fall down. jaycaspiankang It seems to me no one paid attention to his name before 🤔😬😂 Sam (Uncle) - “Bank” “Man” - Fried (toasted) 🤷🏻‍♂️😂

It was a fraud....... He stole money from his clients No, I think it was the fraud Kudos to Coindesk Maybe little known by CNN :-) Why isn't he in prison & Ukraine & Biden being audited, yet? Lol he is still speaking at a Washington post or new York times even on 11/30. They are still propping this con up.

Democrats cheat

Sam Bankman-Fried ran FTX like ‘personal fiefdom’ as firm spent $300M on luxury real estateSam Bankman-Fried ran FTX like 'personal fiefdom' as firm spent $300M on luxury real estate Same

Sam Bankman-Fried reportedly owns $100M stake in Elon Musk's TwitterInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know. ‘Reportedly’ ie fake news that guy should be in jail

FTX: How Sam Bankman-Fried built a house of cardsCrypto trading firm FTX was Sam Bankman-Fried's personal 'fiefdom,' attorneys argued at its first bankruptcy hearing Tuesday. Experts weigh in on how. Jail jail jail. If that were you and me we wouldn’t be praised and advertised we’d be in jail jail jail. Sick of this kid. Playing with peoples emotions and money. I wouldn’t want to be you once the mob finds out how much they really lost. No worse then Madoff And you all bought in to it. Wolves leading the sheep to slaughter. Dems should be returning money he gave them or they should be held as accomplice

Sam Bankman-Fried seems inspired by Elon Musk as 'meme' fundraiser drummed up $420.69 millionInvestors for the \u0027meme\u0027 fundraiser, which took place last year, included BlackRock and the Ontario Teachers’ Pension Plan

Sam Bankman-Fried 'easy to pick out' as a fraud: CME Group chief Terry DuffyCME Group's CEO Terence Duffy sounded off on 'Tucker Carlson Tonight' about the disgraced FTX founder Sam Bankman-Fried and claimed he gave a warning about him. The biggest fraud in human history. You just have to look at who he hired and what they did before joining FTX. This financial tsunami fail by fraudulent punk SBF, FTX was a front and scam and never had the self regulations and policies stricter programming out possibilities of illegal thief of customer Accts by anyone! But SBF used his open as hell, abilities to secretly transfer….