Finance / Politics

Mainstream Media Complicit in FTX Fraud, Crypto Collapse

AMAC Exclusive – By Andrew Abbott

In a wide-ranging interview last Wednesday, the disgraced former CEO of cryptocurrency company FTX, Sam Bankman-Fried, essentially confessed to a number of potential criminal charges against him, laying out in shocking detail how his $10 billion net worth collapsed to virtually nothing in just a few days. Once touted as the vanguard of a movement to revolutionize the cryptocurrency market and bring it into the mainstream, Bankman-Fried has now sent crypto markets tumbling and left many experts wondering what the future holds for the volatile asset. But he is hardly the only person to blame for the scandal that has cost investors billions – he had a media establishment willing and able to assist him along the way.

In 2019, Bankman-Fried founded a “cryptocurrency exchange” called FTX. This company and other cryptocurrency exchanges are digital platforms on which customers can trade cryptocurrencies, somewhat like stocks or bonds. Customers can also exchange cryptocurrency for actual dollars.

Over the course of just a few years, FTX rose to become the third-largest cryptocurrency exchange in the world, and one of the most influential. The company acquired other smaller platforms, hired high-profile celebrities like Tom Brady and Larry David to promote the company, and paid $145 million for naming rights to the Miami Heat basketball stadium. FTX even created its own cryptocurrency, FTT Token.

Throughout this meteoric rise, Bankman-Fried became a darling of the mainstream media. Forbes named him a “Top 30 Under 30,” along with several of his top executives. Articles postulated that he would be the world’s first trillionaire.

Despite his tremendous wealth, Bankman-Fried aggressively worked to cultivate an image of himself as a humble altruist who eschewed material comforts. In a glowing interview with Bloomberg, he said he slept in a beanbag chair next to his desk, drove a Toyota Corolla, and shared living quarters with 10 other coworkers. He told reporters that he only needed $100,000 to be happy and would give the rest of his multi-billion-dollar fortune away to charity. Bankman-Fried purported to be an advocate for “effective altruism,” a progressive philosophy that stresses one should become as wealthy and successful as possible to then give away any amassed fortune.

Beneath the surface, however, Bankman-Fried’s giving was far less altruistic than the mainstream media let on. Many of the media outlets who lavished praise on him and FTX were at the same time accepting large sums “investment grants” from FTX-linked funds. Bankman-Fried became the second largest donor to the Democrat Party in 2022, behind only George Soros. He later pledged to spend $1 billion to support Democratic candidates but quickly walked back the claim. He also met over a dozen times with senior government regulators and championed his version of a new regulatory bill that would “bring greater transparency and accountability” to crypto markets.

Then, in early November, a number of stories revealed that FTX had questionable and potentially illegal ties to the trading firm Alameda Research. Bankman-Fried founded Alameda in 2017 and then handed control of it over to Caroline Ellison, a 28-year-old romantic partner. On November 2nd, a CoinDesk article revealed that most of Alameda’s $14.6 billion in assets was invested in FTT Tokens. This left Alameda deeply vulnerable to a potential “run” on the token; if other investors sold their FTT Tokens, Alameda’s value would collapse.

While Ellison dismissed the story, the value of FTT Tokens immediately began to crater. By November 8th, customers had withdrawn over $6 billion from FTX amid fears the exchange might collapse. From November 4th to the 13th, the value of FTT Tokens dropped from $25.47 to $1.50, shattering both FTX and Alameda.

A rival exchange firm, Binance, had initially offered to buy out FTX, thereby bailing out Bankman-Fried. However, Binance backed out of the purchase almost immediately after reviewing FTX’s finances. In the days that followed, crypto markets reeled from the shocking allegations of how Bankman-Fried had mismanaged, abused, and potentially fraudulently misled the public as the steward of FTX. The Wall Street Journal reported that he had used funds that customers had deposited in checking accounts on FTX at his own discretion – most notably to give Alameda $10 billion in liquidity when they faced a financial crunch. This practice is highly illegal, and multiple reports have confirmed that the SEC and Department of Justice are investigating Bankman-Fried personally.

Contrary to his public-facing façade as a humble altruist, the disgraced crypto king now appears to have used the company – and the personal funds of investors – as “his own piggy bank.” Financial disclosures revealed that Bankman-Fried had purchased over $100 million worth of real estate in the Bahamas for top executives and family members, specifically a $16 million vacation home for his parents. His “humble penthouse” was a luxury home currently listed for $40 million, and former employees allege that his ten roommates were romantically intertwined.

Former employees say they were given a “full suite of cars and gas covered for all employees [and] unlimited, full expense covered trips to any office globally.” Most absurdly, when employees ordered items on Amazon, Bankman-Fried would charter private planes to fly from Miami to the Bahamas, as Amazon doesn’t currently operate in the Bahamas.

By November 11th, Bankman-Fried resigned in disgrace, and FTX filed for bankruptcy, as did Alameda Research. This past summer, economists and financial experts boldly predicted that a single Bitcoin would be worth $500,000 by 2027. As of December 1st, these same experts are now solemnly predicting Bitcoin could crash below $10,000. Thus far, the collapse of FTX has cost the cryptocurrency market almost $150 billion in value. Other popular cryptocurrencies like Ethereum and Luna have seen similar crashes.

Incredibly, the media continued their starry-eyed coverage of Bankman-Fried, downplaying the fact that he had cost investors billions of dollars by knowingly lying to them. The New York Times cover story on the scandal characterized Bankman-Fried’s crimes as “expanding his business interests too quickly.” A Washington Post puff piece after the scandal broke focused heavily on Bankman-Fried’s contributions to “pandemic prevention” and “climate change.”

In a court filing last week, John Ray III, who was brought in to manage Enron following a scandal of similar magnitude in 2001 and has now been hired to resurrect FTX, said he has never seen such “a complete failure of corporate control,” including at Enron. That may indeed be true. But that failure of corporate control extends beyond just FTX, and to a media establishment that failed to approach the FTX story with any degree of reasonable skepticism or objectivity, and has still refused to put their partisan leanings aside to honestly cover the story.

Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture. 


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Michael Lewis
1 month ago

 Mainstream Media Complicit in FTX Fraud, Crypto Collapse:
“Many of the media outlets who lavished praise on him and FTX were at the same time accepting large sums “investment grants” from FTX-linked funds. Bankman-Fried became the second largest donor to the Democrat Party in 2022, behind only George Soros.”
https://amac.us/mainstream-media-complicit-in-ftx-fraud-crypto-collapse/?utm_source=email&utm_campaign=daily-news&dderh=abb6c386e0fe67ec93648dea7bd38bbc

The AMAC article above revealcorruption by media corporations.

The Supreme Court has ruled repeatedly that campaign spending constitutes an essential form of “political speech” that is closely protected by the First Amendment. In order to regulate political spending, therefore, the government’s action must be justified by a particularly compelling reason and be narrowly crafted to achieve the law’s purpose. The only government interest the Court has found sufficient to justify campaign finance regulations is the prevention of either actual or apparent corruption in the political process.
encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/federal-election-campaign-act-1971

Media corporations do not have a brain, a voice Box or a body. A media business cannot interview a political candidate, form a political opinion or endorse a political candidate, only human beings are capable of exercising First Amendment Rights.

If Congress regulated freedom of religion like they regulate freedom of the press, Churches as institutions would be exempted from regulations governing freedom of religion and human beings would not be free to worship as they choose.

If newspapers were the definition of freedom of the press and radio and TV stations were the definition of freedom of speech, they would not need an exemption from Federal Campaign laws. That is why GOP should fight to restore equal 1st Amendment rights to the electorate:
pic.twitter.com/xjZd4jUeMy

patriot
1 month ago

Why isn’t this scumbag in prison already? Oh yeah he gave tens of millions of his victims money to the demoncraps. Just like Hunter Biden, Sam Bankman-Fried will probably not even be charged with anything.

Rufus T Firefly
1 month ago

Sounds like his favorite charity was the democratic party. Quid pro quo anyone?

Patriot Will
1 month ago

Bankman-Fried is totally devoid of any ethics. He robbed investors of hundreds of millions of dollars, yet the Marxist Democrats are making Bankman-Fried into a likeable genius who wasn’t aware of what was going on in the actual fraudulent business transactions. Once again, the Marxist Democrats have compartmentalized 2 setts of ethics — one set is unfairly critical of anything done by Republicans, and another set gives the Marxist Democrats the right to chronically break laws, because the Marxist Democrats live in a fantasy land in which they are the protectors of a green world.

Mike
1 month ago
Reply to  Patriot Will

Trump is less ethical.

David Millikan
1 month ago

Lame Stream Media couldn’t find a fart in a dust storm.
If FAKE News told the TRUTH they would probably melt like the wicked witch in The Wizard of Oz.

Kay
1 month ago

This man belongs in jail for the rest of his life. Double standard again.Both democrats and republicans need to refund the money to investors on proration

Anita Wasemann
1 month ago
Reply to  Kay

Those “investors” bought into a pipedream. Why should our tax dollars be spent to refund the money they spent because of poor judgement?

Mike
1 month ago

Why is Trump not in jail for all of the horrible crimes he has committed?

PaulE
1 month ago
Reply to  Mike

What crimes specifically?

FrogEyes
1 month ago
Reply to  PaulE

Whenever anyone asks the question “what crimes specifically?” to a “Mike” they never reply, they can’t name one, but they believe it because they have been told there are many by talking heads and celebrities who won’t/can’t name any either….So many BONEHEADS allowed to speak.

El Ey
1 month ago
Reply to  FrogEyes

To FrogEyes and PaulE. I think Mike who constantly bashes Trump, conservatives and republicans is a laid off Twitter employee who is paid big time by the democrats to just mess this AMAC site. Let’s hope and pray that the Holy Spirit will enlighten Mike’s soul and mind soon for his own mental peace especially this holy and blessed season of Christmas.

Morris Hewitt
1 month ago
Reply to  Mike

Trump not part of this scandal this is a real one not fake news. You obviously are a troll or Dem operative on a conservative site for the most part. If you have Dementia get some help or stick the the subject at hand.

FrogEyes
1 month ago
Reply to  Morris Hewitt

Another Bonehead.

Westhus
1 month ago
Reply to  Mike

I see you’re back Mr. HUNT.

Philip Hammersley
1 month ago
Reply to  Mike

Please name ONE. Not what Madcow, Lemonhead, of Morning Joke SAY; what Trump actually DID that was illegal?

Mike
1 month ago

Trump University you idiot

Mike
1 month ago

Sexual assault

Mike
1 month ago

Trump is a lunatic.

legally present
1 month ago
Reply to  Mike

Seek help, your’e TDS is making you into a fool.

Kyle Buy you some guns,and learn how to shoot
1 month ago

Hey brother. Can you spare a dime. ???? Kyle L.

PaulE
1 month ago

When you look into the background of SBF, it is easy to see why he thinks he can get away with all the criminal actions he has committed. Both parents are well known in the upper ranks of the Democrat Party. Look at their histories and whom they have been associated with for decades. Very well connected and influential. SBF led a life growing up in an environment where he was essentially taught how to operate in the rarified air of the truly unaccountable and untouchable. The rules simply do NOT apply to such people. However, rather than operating in relative obscurity, so as not to draw attention to himself, SBF instead opted to operate in the media spotlight as the champion of the con known as “effective altruism”. Thus he operated in the bright media lights of “progressive wokism” as some sort of new age J.P. Morgan as the huckster CNBC’s Jim Cramer proclaimed on TV.

So SBF went about doing what he was essentially taught to do all his life, as a person of privilege: Connect with the “right people” (high level politicians and connected types in the Democrat Party and regulatory environment of Washington, D.C.), buy influence and thus protection from accountability and prosecution from such people (look at the long list of Democrats and government officials he gave over $40 million dollars to in just the recent past), and then simply proceed to create the illusion of meteoric success to draw billions of dollars of customer money into both his hedge fund and FTX. The idea being he was some sort of financial genius, who could invest his customers’ money to make them incredibly rich too. All so they could also give it all away, if they chose to, as SBF claimed he was doing.

Unfortunately like all con jobs, the money ended up being spent on lavish homes, cars, many properties in the Bahamas and likely elsewhere around the world as well. Bookkeeping and financial risk management controls were lax to non-existent by all reports from people who have ever looked at either his hedge fund or FTX. Customer funds were indistinguishable from the corporate funds of the businesses that SBF controlled. It was all used as SBF’s personal piggy bank to spend as he wished. Now of course billions of dollars of customer funds are gone and SBF claims he has no idea where any of that money went. It is all “someone else’s fault”. Thanks to his well placed “donations” to numerous high-level Democrats and regulators in the federal government, SBF is still walking around free. He has, to date, been charged with NOTHING and it seems neither the government regulators not any high-ranking Democrats are pushing very hard to have him arrested and prosecuted right now. So much so, that SBF feels comfortable enough to be going on essentially a media apology tour claiming it was all just a honest mistake.

If nothing else, this will be fun to watch to see just how shielded from any accountability for his criminal actions SBF truly is. Will he ultimately face decades behind bars for what amounts to the theft of billions of dollars or will he instead end up just getting a slap on th wrist. There is a big incentive, by a LOT of Democrat politicians and federal officials, to just make this all go quietly away as fast as possible.

Veteran
1 month ago
Reply to  PaulE

This isn’t going to go away until the little creep goes to jail and begins to sing the song about the big fish who should interest the fisherman a lot more than he, or until we see an Epstein encore, which is much more likely with today’s Democrat party.

Mike
1 month ago
Reply to  Veteran

Trump has committed way more fraud yet he has gotten off scot free.

Morris Hewitt
1 month ago
Reply to  Mike

Go away Mike either prevent the evidence and get on the subject at hand has nothing to do with Trump. He has been looked at by everyone illegally and still is clean so get a life.

nate
1 month ago
Reply to  Mike

Would you like ore Dem grape or cherry Kool Aid?

Philip Hammersley
1 month ago
Reply to  Mike

You made your quota. Now submit your bill to Nazi-loving Soros!

Jane CA
1 month ago
Reply to  Mike

shut up mike

Stephen Russell
1 month ago

Tax Crypto

Veteran
1 month ago

Tax Democrats!

Mike
1 month ago
Reply to  Veteran

Tax MAGA nuts

El Ey
1 month ago
Reply to  Veteran

It would be heaven on earth if IRS would audit and expose (which is very doubtful) Pelosi’s, Biden’s and all the forever democrat politicians financials. I know it’s a pipe dream, but miracles happen especially on Christmas time.

Honest Abe
1 month ago

Josef Stalin would be proud of our corrupt mainstream media, “tell the American peasants” what we want them to believe. Hold them accountable for their deception, like Devin Nunes did with CNN

Mike
1 month ago
Reply to  Honest Abe

Wrong you imp

jocko
1 month ago

ISN’T
IT TIME THAT SOME PATRIOT ”TAKES CARE” OF THE liberal PRESS ?

Mike
1 month ago
Reply to  jocko

You’re a subhuman.

Honey
1 month ago

He is such an altruist he gave tons of money to liberal candidates. Egad.
Also I don’t want crypto currency to be a good idea. When the Left destroys our economy and forces us all on to crypto currency as part of the New World Order and the Great Reset, they want to be able to track our dealings with this currency. Ugh.

Chris
1 month ago
Reply to  Honey

As if they don’t already track you with your credit cards and checking account ???

There are 2 ways to do crypto, one where they can track you as they do today (centralized) and the other where they *cannot* track you (a bit more complicated but it starts with being decentralized). FYI, FTX was a centralized company working in the crypto space — that’s why it was capable of such fraud and mismanagement.

Crypto is much needed to prevent the future you fear — but it has to be the right crypto. People with concerns such as yours *need* to be involved in crypto to make sure it goes the right direction. Crypto is coming one way or another (check out the Fed’s recently started experiment with centralized crypto), it’s best we work to influence that change for good rather than ill.

PaulE
1 month ago
Reply to  Chris

You are correct. The Federal Reserve is also interested in applying similar programmable controls to their test version of the digital dollar, as well as make all digital dollars under direct deposit of the Federal Reserve, much like how the Chinese do with their digital currency. Banks would become largely nothing more than where you go to apply for loans, if the federal government approves what the digital dollars would be used to pay for. The Fed is very interested in how China has done the digital yuan overall. Which would be incredibly bad for the vast majority of Americans.

I’m sure Washington will try to spin the SBF con job of febricating worthless tokens that were then internally run up in price as a justification for a centralized digital dollar model instead of decentralized bitcoin. Never let a good crisis go to waste as the Democrats live by.

Stephen Russell
1 month ago

Im glad media invovled since that means maybe Chap 7 some firms
More go belly up
Shake up Big Tech

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