How Sam Bankman-Fried’s Crypto Empire Collapsed

Mr. Bankman-Fried said in an interview that he had expanded

too fast and failed to see warning signs. But he shared few

details about his handling of F*'TX customers' funds.

KEVIN BARRETT • NOVEMBER 17

The New York Times is going a lot easier on Sam Bankman-Fried than it did on Bernie Madoff. As of this writing, they’re still hyping a Nov. 30 event headlining SBF alongside Zelensky, Zuckerberg, and Yellen.

Why be nice to SBF and mean to Madoff? Maybe because Madoff made off mostly with the money of his fellow Jews, while Bankman-Fried is an equal-opportunity absconder. But since I myself am an equal-opportunity conspiracy theorist, as opposed to a merely anti-Semitic one, I’m obliged to wonder whether there might be a connection between the “collapse” (or was it controlled demolition) of Bankman-Fried’s crypto empire, and the suspicious death of Nikolai Mushegian on October 28.

Mushegian, a leading crypto pioneer and founder of Dai, tweeted on October 27 that the “CIA and Mossad and pedo elite are running some kind of sex trafficking entrapment blackmail ring out of Puerto Rico and Caribbean islands” and that “they are going to frame me with a laptop planted by my ex gf [girlfriend] who was a spy. They will torture me to death.” The next day he washed up on Condado Beach.

What was that about? Only Allah and the people with the right security clearances know for sure. The innocent explanation is that Mushegian went nuts and drowned himself, after tweeting anti-CIA diatribes, in order to trick people like me into writing articles like this. (You got me, Nik!)

But crypto visionaries like Nikolai Mushegian have reasons to be paranoid. They know that their goal—replacing central banking with a fully-decentralized currency system—makes them the mortal enemies of the most powerful people on Earth. Additionally, the crypto world, where huge sums of difficult-to-trace “digital cash” are floating around, often with minimal-to-nonexistent security, smells like an oil-spill-sized pool of blood to the oceansfull of sharks swimming around out there.

Some say the central bankers are the biggest sharks, while the black-ops and mafia types they employ are the medium-size ones. Any way you slice it, sharks of all sizes have plenty of motivation to take big bytes out of crypto. Whether the biggest sharks intend to kill crypto, or just cripple and control it, it’s obvious that people like Mushegian—self-styled crypto pirate warriors intent on sinking the central banking armada—know what kind of ocean they’re sailing in.

So for the sake of argument, let’s entertain the possibility that Mushegian’s “paranoid” tweets were reality-based, and that central banking sharks did indeed send him to a watery grave. (Yes, I know the authorities dragged him out of the water and buried him on land, which is more than they allegedly did for Osama Bin Laden, but I’m trying to wax poetic here.)

If we step back and consider the broader implications, it would seem that Mushegian’s murder, if that’s what it was, would have been part of a larger effort to rein in crypto. A “sex trafficking entrapment blackmail ring run out of Puerto Rico and the Caribbean Islands” tasked with getting its hooks into key crypto people might plausibly be part of the same effort.

And so might the controlled demolition of FTX. Just days after the immolation of FTX-Alemeda, government hearings on “the pressing need to regulate crypto” were held in the UK and scheduled in the US. If you were one of the central bankers that own the US and UK governments, the spectacle of FTX imploding at free-fall acceleration might be just the shock-and-awe event you needed to prod governments to regulate the crypto sector and integrate it into the legacy currency system under the auspices of said banksters.

Was Sam Bankman-Fried a Patsy?

You would think a 30-year-old self-made billionaire would have to be a pretty smart, savvy, reality-based guy. But according to the best investigative article on the FTX-Alemeda implosion, Bankman-Fried was a half-bright amphetamine addict who spent most of his work time, as well as his free time, playing video games that he never got very good at. While it’s always possible that young Sam was one of those rare geniuses who can do amazing work with an amphetamine monkey on his back, like Sartre or Philip K. Dick, the vast majority of speed freaks are burned-out wrecks, totally incapable of doing a decent job mowing the lawn, much less earning billions of dollars gaming crypto algorithms. And milky eggs is pretty sure Bankman-Fried was no genius:

…his personal blog, Measuring Shadows, is incredibly dullーit is a compendium of overly long posts about effective altruism, moral philosophy, and baseball statistics. In comparison, Caroline Ellison’s blog is far superior, demonstrating a level of thoughtfulness and wit that surpasses SBF by many leagues…

…While this may initially seem like a frivolous observation, it is actually shocking that SBF was unable to rank higher than the Bronze or Silver league (at League of Legends video game) after years of regular play across hundreds if not thousands of individual games. It is reflective of an incredibly impaired level of cognition, much like someone who was unable to learn how to ride a bicycle after an entire month of practice or someone who never progresses past the level of an average elementary school student after five years’ of daily piano practice.

Wait a minute! Bankman-Fried studied physics at MIT! What happened?

It is not clear, but one could speculate that excessive drug usage may have literally “fried his brain” to some extent.

It certainly could have. SBF wasn’t just gobbling pills, he was literally patching the stuff into his bloodstream. And he didn’t even bother to hide his habit.

Like the “paranoid” Nikolai Mushegian, Sam Bankman-Fried-on-Amphetamines might have gotten strung-out and imploded on his own. But it’s also possible that just as Mushegian could have had help washing up on the beach, Bankman-Fried’s meteoric rise and fall was guided, or at least nudged, by a hidden hand.

READ MORE:

https://www.unz.com/kbarrett/sam-bankman-fried-on-amphetamines/

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By Ari Paul / Fairness and Accuracy in Reporting (FAIR)

Today, you probably know who Sam Bankman-Fried and FTX are, and the details of why he and his company are front-page news are emerging at an amazing pace. Here’s the short version: Bankman-Fried—a boyish-looking cryptocurrency baron known commonly as SBF—announced that his lauded cryptocurrency exchange, FTX, had lost at least $1 billion in client funds, sending the crypto market into a tailspin (Fox Business, 11/16/22). The company, once the third-largest cryptocurrency exchange (AP, 11/16/22), has filed for bankruptcy. Lest one think this is a debacle that only affects crypto bros, Treasury Secretary Janet Yellen warns that “the sector’s links to the broader financial system could cause wider stability issues” (New York Times, 11/17/22).

How could this happen? How could no one have seen this coming? These are the questions many people are asking. One problem is that in the months leading up to Bankman-Fried’s transition from financial genius to possible financial criminal (Yahoo Finance, 11/14/22), he received little scrutiny in the media. On the contrary, he was celebrated.

Among the silliest suck-ups came from the New York Times (5/14/22), in which David Yaffe-Bellany, the paper’s cryptocurrency correspondent, said that Bankman-Fried’s “pragmatic style” came from his parents, who “studied utilitarianism, an ethical framework that calls for decisions calculated to secure the greatest happiness for the greatest number of people.” Yaffe-Bellany added that “Bankman-Fried is also an admirer of Peter Singer, the Princeton University philosopher widely considered the intellectual father of ‘effective altruism.’” (Singer has been criticized for his eugenics-like approach to disability—FAIR.org, 1/20/21.)

Yaffe-Bellany was also widely lambasted for providing media cover for Bankman-Fried even after his empire collapsed (New York Times, 11/14/22). As Gizmodo (11/15/22) put it:

The new article in the New York Times by David Yaffe-Bellany lays out the facts in ways that are clearly beneficial to SBF’s version of the story and leaves many of his highly questionable assertions without proper context or even the most minimal amount of pushback. The result isn’t to illuminate the shadowy world of crypto. It reads like…the Times had conducted an interview with Bernie Madoff after his Ponzi scheme collapsed and ultimately suggested he just made some bad investments.

The conservative New York Post (11/15/22) used Yaffe-Bellany’s reporting to tweak the establishment Times for its coziness with someone who may face criminal indictment. But the Post‘s sibling paper, the Wall Street Journal (10/30/22), had just weeks earlier given Bankman-Fried free, uncritical space to pump out optimism about cryptocurrencies, including the idea that value drops in crypto were just part of a general economic fluctuation: “It wasn’t just crypto…. By and large what we saw this year was a broad-based risk-asset selloff, as this monetary inflation reared its head, became noticeable enough to inspire policy change.”

Bloomberg (4/3/22) likewise had painted Bankman-Fried as an eccentric financial whiz kid, whimsically frugal with a “Robin Hood–like philosophy,” while Reuters (7/6/22) ran with his claims that not only did he have “a ‘few billion’ on hand,” but that he would graciously use it to “shore up struggling firms.” An accompanying photo of Bankman-Fried with a T-shirt and disheveled hair made him look like the reincarnation of Abbie Hoffman.

Barron’s reran an AFP story (2/12/22) that, again, highlighted Bankman-Fried’s “spartan lifestyle,” his vegan diet and his casual wardrobe. Matthew Yglesias (Slow Boring, 5/23/22), an economics commentator and a graduate of Slate and Vox, wrote, “I think [his] ideas, as I understand them, are pretty good.” None of these pieces really probed whether his business was sustainable.

How on Earth did this T-shirt-clad man charm American media into thinking that he could manage billions of dollars in wealth, based on an intangible commodity that has no intrinsic value? Analysts have long tried to get the media class to understand that crypto has many inherent problems (Jacobin, 12/26/17, 10/17/21), that the crypto market’s value has tanked (CNBC, 6/15/22), that Bitcoin wealth is highly concentrated (Time, 10/25/21) and that Bitcoin, despite being Internet-based, is highly environmentally destructive (Guardian, 9/29/22).

One might think—or hope—that, after Enron, WorldCom, Bernie Madoff, Jordan Belfort and the 2008 financial crisis, that the business press could harbor skepticism about financial and business leaders in general, but particularly those in a shadowy, emerging sector known for its instability (Forbes, 5/10/22) and its susceptibility to scams (Forbes, 9/23/22).

Bankman-Fried, unfortunately, was a dangerous combination of factors that could win over reporters. He was optimistic about a troubled financial sector. He was making billions while spouting altruistic ideas and remaining personally thrifty, a kind of mysterious being who could be presented as a poster child for a more ethical version of capitalism. His insistence on casual dress suggested that he was just so smart, his brain operated above the mundane details of regular business.

His image was simply fun to write about. And this all made for the kind of good copy—and photographs—that will make an editor happy at deadline time. But this allowed his image to be the main focus for the press, rather than the goings-on of his business.

Doug Henwood, host of KPFA’s Behind the News and the author of Wall Street: How It Works and for Whom, told FAIR:

The business press is rarely skeptical about the speculative heroes of the moment. There are exceptions; if you read carefully, you can get a good critique. But the general culture is boosterish. Just a few months ago, SBF was a genius. Elon Musk, too, though his antics at Twitter are making that cult harder to sustain. Before that it was Elizabeth Holmes and her magical blood-testing machine. Go back a couple of decades and it was Ken Lay and Enron (celebrated by none other than [New York Times columnist] Paul Krugman, who’d also been paid a consulting fee by the company).

There are a lot of reasons for this. Many business journalists identify with the titans they cover—some even aspire to join them, as did former New York Times reporter Steven Rattner, who became an investment banker. Then there’s the fear of alienating your sources—the dreaded loss of “access.” And then there’s the general reluctance to be the skunk at the picnic—when markets are frothing, it’s more fun to play along than play the critic.

As NBC (11/16/22) noted, Bankman-Fried’s wide spending bought him wide influence, as he

visited the White House, attended a congressional retreat, and held countless meetings with lawmakers and top regulators. He got chummy with Bill Clinton after paying the former president to speak at a conference. He spent $12 million getting a referendum on the ballot in California. And he earned praise during Senate testimony from Sen. Cory Booker, D-N.J., for a “much more glorious afro than I once had.”

In just two years since Bankman-Fried’s first political donation, his money hired dozens of top-flight lobbyists and political operatives, made major investments in newsrooms like ProPublica and Semafor, and made him the second-biggest Democratic donor of the 2022 midterms, behind only the 92-year-old financier George Soros. He said $1 billion would be a “soft ceiling” for his spending in 2024.

The whole mess is sparking a conversation about whether cryptocurrency markets demand tighter and more robust regulation (Fortune, 11/14/22; Washington Post, 11/17/22). But there needs to be a discussion about the media’s role in this as well. Reporters should be skeptical of crypto market actors, for all the reasons stated above, but they also should be skeptical of business leaders more generally.

Good public relations is as important to a business’s bottom line as the strength of its product. Reporters and editors need to fight the urge to be a part of that.

READ MORE:

https://scheerpost.com/2022/11/21/while-crypto-bro-scammed-clients-reporters-scammed-readers/

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BY Matt Taibbi

As subscribers by now are aware, I’m very upset about YouTube’s recent decision to censor a factually accurate video about “rigged election” comments produced for this site by Matt Orfalea. The company has given Matt a strike and labeled his/our work “misinformation,” an insult I’ve decided not to take lying down. I’m going to search for new ways to embarrass the company until they reverse their decision. As it happens, today offers an excellent opportunity.

CBS This Morning today came out with a story claiming they obtained a copy of Hunter Biden’s laptop, sent for an “independent forensic review,” and determined it “appears genuine.” This follows up confirmation from The New York Times back on March 16th, and more importantly, the exhaustive earlier work of Politico reporter Ben Schreckinger confirming key emails in his book, The Bidens.

Matt did an exceptional job back in March in the video above [SEE], compiling clips of people who went on air and with absolute certainty proclaimed the laptop “a lie,” “altered or fake,” “pure distractions,” and of course, “RUSSIAN DISINFORMATION.”

Whether or not you thought the actual content of the story was important, the suppression of the Hunter Biden laptop affair was a crossroads moment in the history of modern censorship. YouTube played a major role in this event.

This was a case in which major news media — including CBS, NBC, PBS, CNN, and countless other outlets — actively embraced disinformation, in the form of a group letter from 50-plus former intelligence officials saying the laptop story (they referred to a “laptop op”) had the “classic earmarks of a Russian information operation.” All the aforementioned news agencies fell for this, as did Twitter (which blocked access to it, in what then-CEO Jack Dorsey later admitted was a “total mistake”) and Facebook (whose increasingly adrift founder Mark Zuckerberg later told Joe Rogan the story was throttled down at the suggestion of the FBI).

YouTube also pushed this disinformation campaign. It still does. Despite the total absence of evidence ever existing that the laptop was either fake or part of a Russian “information operation” and a growing pile of evidence that the laptop is real, YouTube continues to leave unmolested on its site countless videos promoting the conspiracy theory — that’s what it is, let’s be clear — that the laptop story is both bunk and an intelligence op.

Here’s a brief sample of materials they still have up, unmarked as “misinformation” or “disinformation”:

1. Are Trump allies peddling Russian disinformation about the Bidens? PBS October 16, 2020 Judy Woodruff: “Today we learned more about concerns expressed by the President’s most senior advisors, that the President’s personal attorney was peddling Russian disinformation.” Nick Schifrin: “The bottom line is we cannot confirm the story, Judy, but… the Biden campaign says that this is Russian disinformation, and disinformation experts I talk to tell me that pro-Russian actors have been packaging their disinformation next to apparently legitimate information.” The irony, of course, is that PBS and YouTube were the ones pushing disinformation here.
2. Hunter Biden tabloid story raises disinformation campaign fears, CBS October 15, 2020 “Experts say it has all the hallmarks of information laundering…,” said correspondent Norah O’Donnell, before quoting former FBI agent Eric O’Neil saying, “This looks like your classic disinformation campaign.”
3. US investigating if emails connected to Russia disinformation against Biden, CNN October 16, 2020 This is a beauty. Wolf Blitzer introduces correspondent Alex Marquardt by talking about how there are “fears that [the laptop story] could actually be part of Russia’s latest and very massive disinformation campaign in the US presidential election.” To which Marquardt answers, “Massive indeed Wolf,” before going on to “report” that “we are being told by two people who’ve been briefed on what the FBI is doing, that they’re looking into whether these unverified emails about Hunter Biden that were published earlier this week by the New York Post… are part of this bigger Russian disinformation effort in the 2020 election.” We have no proof this campaign existed, no proof this story was connected to it, and no proof of it being “bigger” than any other campaign. Unflagged by YouTube.
4. Bash On Pushing Of Disinformation On Biden: This Looks, Walks, & Talks Like Russian Intelligence, MSNBC October 19.2020 This piece is extraordinary because it’s almost exactly the same message as the one written by the 50 “former” intelligence officers. Nicolle Wallace starts off humorously, scoffing at the idea that someone is “suggesting somehow that Joe Biden is a corrupt politician — one of the most vetted politicians in this country.” Jeremy Bash, a former CIA chief of staff now posing as a media figure, concurs. “This looks like Russian intelligence. This walks like Russian intelligence,” adding that the laptop story “looks like a classic Russian playbook, disinformation campaign.” If you go back and look, you will find countless instances of reporters using words like classic, hallmarks, earmarks, and disinformation campaign.
5. Joe Biden on 60 Minutes, CBS. October 26, 2020 Remember, CBS just did a story contradicting their own earlier 60 Minutes piece in which Lesley Stahl berated then-President Trump that the laptop story “can’t be verified.” Indeed, CBS just by doing its new story proved that its previous position — that verification was impossible — was a lark. In their other 60 Minutes interview from that season, they soft-balled Joe Biden on the laptop story. CBS: “Do you believe [Hunter’s laptop] is part of a Russian disinformation campaign?” BIDEN: “It’s just what it is. It’s a smear campaign.”

There are plenty more of these. If you want to widen the criticism to Google, these “Russian disinformation” stories still pop up high in searches (see here, here, here, here, and here, for instance). YouTube and Google now become exhibit A in the ultimate truth about any attempt to “moderate” content at scale. If you make even a good-faith effort to weed out “disinformation,” relying on official bodies to help, what you’ll be left with is… official disinformation.

But this isn’t a good-faith effort to weed out untruths. YouTube has become a place that censors true content but traffics in official and quasi-official deceptions. It’s become indistinguishable from a state censorship bureau. If they feel they’re right about their decisions, they should be happy to explain themselves to people me. Until then, they can expect more love letters from this address.

Subscribers should know I don’t believe in letting things like this go, but I also don’t believe in annoying faithful readers. In the future, if there are similar entries in this campaign, I’ll make them public but won’t clog your email with notices. The idea is to be a pain in Google’s backside, not yours.

READ MORE:

https://scheerpost.com/2022/11/22/youtube-censors-reality-boosts-disinformation-part-1/

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