Last week, if Sam Bankman Fried‘s crypto exchange, FTX, imploded, a journalist from Forbes sent him an email. A year earlier, Bankman-Fried magazine—or SBF, as he’s known—had featured on the cover of its annual Forbes 400 issue, in which he was hailed in a profile as “the richest 29-year-old in the world.” He was worth $22.5 billion. Pursue Peterson-Withorn, who co-authored the story, Bankman-Fried wrote to let him know that the publication was planning to drop him from the rankings, as he had lost nearly all of his money within days, amid a liquidity crisis after FTX allegedly billions of dollars in customer assets to fund betting by Alameda Research, a sister trading firm.
“He hadn’t really spoken to anyone,” Peterson-Withorn told me. “Presumably he was hard at work bailing out FTX and FTX US and Alameda and all this money from his investors and his clients’ funds.” which is why the journalist was surprised when he received an email back about this relatively trivial matter. Bankman-Fried said he could not “dispute with confidence” that he was no longer a billionaire as he was “not entirely clear” about his net worth at This was two days before FTX, once valued at $32 billion, was set to file for bankruptcy . “He talks when other people don’t want to,” noted Peterson-Withorn.
Even with a federal investigation into him, Bankman-Fried can’t stop talking. A few days later, after midnight, he was on the phone with New York Times news reporter David Yaffe-Bellany. And a few days after that he DMed Vox’s Kelsey Piper, a fellow proponent of effective altruism, to try to explain himself, leaving Piper “shocked by a lot of what he said.” “Each individual decision seemed right and I didn’t realize until the end how big their sum was,” Bankman-Fried wrote at one point (at another, “fuck regulators.” Hours later, he attempted to backtrack on some of these comments to walk.)
Courtesy of Fortune; Cover photo by Spencer Heyfron.
Bankman-Fried’s meteoric rise has been played out through the media – and now the same is happening with his downfall. He graced the cover of fortune In addition to the question: “The Next Warren Buffett?” Jeff John Roberts, who wrote that cover story, noted over the past week how “it felt strange” to write now about the possibility of his subject going to jail. When Roberts was later asked on Twitter what he would have changed about his approach, answered: “Always easier in hindsight, but… I would have pushed harder for documents. I asked, but I didn’t push.”
The unraveling of one of the world’s largest cryptocurrency exchanges and the shattering mythology of its leader has already sparked scrutiny from the media, who have previously grappled with criticism for supporting past business or tech prodigies like those of Theranos. . Elizabeth Holmes. And coverage of Bankman-Fried extended well beyond the business part as his Washington state grew — not only as one of the largest Democratic donors, but also as a voice in Capitol Hill policy discussions on crypto regulation. ; the Time used to be accused Didn’t push Bankman-Fried hard enough this week during Sunday’s interview, with Gizmodo calling the article a “weird softball.”
Frank Chaparro, editor-in-chief at crypto news firm The Block, said the media played a role in validating Bankman-Fried “as a serious, honest market participant” along with major players publicly linked to FTX – from leading venture capital firms (Sequoia, SoftBank) to blue-chip investors (Alan Howard, Paul Tudor Jones) to NFL star Tom Brady, who starred in an ad campaign for the company. “It’s very hard to pinpoint exactly what spawned this legitimacy in the beginning, but once it started to snowball, I mean – people trust Tom Brady. People trust CFTC commissioners. People trust fortune magazine,” said Chaparro.
The extent of the damage is just beginning to become apparent. The first detailed look at FTX’s business came Thursday in a bankruptcy filing, 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 can be affected. More revelations are sure to follow. (Bankman-Fried has maintained 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 who believed in him along the way, and the way he’s portrayed in the media is a reflection of that,” he said. Forbes‘s Peterson-Withorn, adding that “the media didn’t invent Sam Bankman-Fried. There were all these investors throwing big bucks behind him and praising him, and celebrities doing high-profile ads with FTX,” by then Forbes put it on the cover. “Once everyone’s on board,” he said, “it starts to take off.”
Journalists may not have invented Bankman-Fried, but he seemed irresistible to profile writers and TV bookers (and apparently authors, such as Michael Lewis spent the last six months or so with him. His quirkiness was highlighted in several profiles (including one commissioned by Sequoia for his website) – a vegan crypto mogul with unusual sleeping habits (on a beanbag chair in the office, when he’s not in the penthouse on the Bahamas which he shared with about 10 roommates) and a penchant for wearing shorts and playing video games. There is a telling moment in such a profile, published in the Time in May, in which Bankman-Fried’s colleague recalls how he once suggested that the FTX co-founder cut his hair for a TV appearance, to which Bankman-Fried reportedly replied, “I think it’s important that people think that I look crazy.” knew how to use the media to his advantage, and he also donated to non-profit investigative outlet ProPublica and invested in the newly launched Semafor – while reportedly unsuccessfully trying to bring journalists to justice Matt Yglesias and Nathan Silver for a Substack competitor.
For all his eccentricities, Bankman-Fried was also handsome and seemingly sincere, which certainly charmed 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 on Alameda’s balance sheet for crypto news site Coindesk prompted the collapse of FTX. “I remember he spoke very quickly and was passionate about trading techniques, many of which I didn’t understand,” but “he seemed like a decent guy, and also kind and patient, explaining things to me, etc.”
Peterson-Withorn said that Bankman-Fried “at least gave the impression of being very candid”, noting how “you can help shape the story if you’re someone who always picks up the phone”. , talking about everything from politics to Meet the press against crypto regulation and Russian oligarchs on CNBC. “There was a certain amount of flexibility in what he would want to predict, which put him in front of a lot of people, a lot of journalists,” Chaparro said. “Once he became a multi-billionaire, I always thought, why is he still doing this? Why is he still literally talking to reporters every day? Shouldn’t he be running the company?”
It’s not like no one asked questions; already in 2019, Chaparro pressed Bankman-Fried on the potential conflicts of interest between Alameda and FTX: “But COVID and the period of go-go momentum that has resulted from it created, in my opinion, the perfect opportunity for someone like this to rise to the top without being questioned drawn. ,” Chaparro told me. In an April interview that has been circulating over the past few days, Bloomberg Opinion columnist says Matt Levin suggests that Bankman-Fried is “in the Ponzi business,” and he doesn’t entirely disagree.
When I asked Alyson Schontell, fortune‘s editor-in-chief, about the media’s treatment of Bankman-Fried, she referred me to a newsletter she wrote defending the August cover. — even if their success is fleeting or their triumphs end in disaster,” she wrote. “I’m proud we had the foresight to capture SBF at its peak.” In an email, Shontell noted that the magazine had failed to mention Bankman-Fried the next Warren Buffett – who had been suggested by a longtime crypto insider – and that on the cover, beneath that provocative question, was how Bankman-Fried could still “crash and burn”.
