From: allin
The FTX controversy, involving its founder Sam Bankman-Fried (SBF), has drawn significant attention, particularly regarding its financial irregularities and the subsequent media coverage [00:07:14].
Allegations and Scale of Fraud
The CEO overseeing the liquidation of Enron, John J. Ray, stated that in his 40 years of experience with corporate failures, including situations with criminal activity and malfeasance, he had “never in [his] career seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as has occurred here” at FTX [01:34:54].
A significant amount of money, potentially billions of dollars, is alleged to have gone missing [01:31:27]. For example, SBF allegedly loaned himself a billion dollars and the head of engineering $500 million off the balance sheet [01:30:49]. The auditing firm for FTX, Prager Metis, was reportedly based in the metaverse, and its address was in Decentraland [01:37:12].
SBF’s Public Persona and “Woke” Signaling
SBF was noted for his adeptness at media strategy, particularly in playing a “dumb game” where he would “say all the right s**t so everyone likes us” [01:15:57]. This included discussions about ethics, which he viewed as a game with winners and losers [01:17:49]. SBF admitted that reputations were “made of” such signaling [01:17:56].
SBF’s philanthropic efforts primarily targeted “woke” causes and issues, such as pandemic prevention and early warning systems [01:19:13]. It was also suggested that SBF sought to fund his brother’s organization via a California ballot initiative, which would have disbursed taxpayer money [01:20:01].
Media Scrutiny and Perceived Bias
There is a perception that certain media outlets and non-profits were influenced by SBF’s virtue signaling [01:18:48]. It is suggested that SBF “played them all” by saying “the right woke words,” leading them to “cover for the most enormous grift that’s ever been perpetrated” [01:18:24].
“It’s the quid pro quo of our civilization: be woke and you will have indefinite career opportunities.” [01:18:38]
It is also alleged that these publications are reluctant to cover the full extent of the FTX fraud because they were “complicit in his reputation laundering” [01:31:05]. As an example, the New York Times published a “puff piece” on SBF before the fraud allegations gained widespread traction, which was criticized for not asking about the fraud [01:31:10]. This contrasts with the intense media hysteria surrounding issues like the layoffs at Twitter [01:14:17].
Regulators and Power Structures
A critique was made about regulators and their effectiveness, suggesting that the “actual filter is not ‘is this a scam?’ The actual filter is ‘is this MMT?’” implying that regulatory decisions are often driven by political considerations rather than consumer protection [01:33:37].
“It’s not consumer protection, it’s re-election.” [01:33:53]
It is argued that if one is part of “interlocking power structures” such as the New York Times, the regulatory state, or the Democratic Party, they receive preferential treatment [01:33:55]. The first investigation by the House of Representatives should focus on SBF and FTX, rather than other political figures, due to the scale of the alleged fraud [01:34:29].
Investor Due Diligence
A list of investors in FTX and Alameda Research was described as a “who’s who of people who did no diligence whatsoever” [01:36:13]. While some investors received audited financials and legal representation, the fraudulent nature of the conveyed numbers suggested that many were duped [01:37:37]. Some potential investors, like the podcasters, reportedly did not receive any financials, only verbal accounts [01:38:11].
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