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Worse Than Enron? The FTX Collapse Leaves Many With Egg on Their Faces

How philanthropy, political connections, and marketing can obscure a much darker reality.

November 18, 2022
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This is a story of how something can appear to be what it is not.

It’s a tale of a jarring contrast between the image the world had of Sam Bankman-Fried before FTX’s meltdown pushed the crypto world into a nauseating tailspin and the reality of a wildly mismanaged multibillion-dollar empire with what Bankman-Fried’s appointed successor described as an “unprecedented” failure of accounting, oversight and discipline.

Before Ian Allison’s Nov. 2 CoinDesk scoop on FTX sister company Alameda Research’s suspect balance sheet, Bankman-Fried was seen as a philanthropic, well-connected, celebrity-hobnobbing, marketing-savvy leader, a wunderkind who made crypto respectable. Two weeks later, he is viewed as a laughing stock, a suspected criminal, an irresponsible, wildly underqualified, selfish child who has destroyed the livelihoods of tens of thousands. Wow. What a difference two weeks make!

In this episode of "Money Reimagined," host Michael Casey chats with two CoinDesk colleagues who’ve delved deeply into the SBF story: Deputy Managing Editor for Companies coverage Tracy Wang and Managing Editor for Global Policy and Regulation Nikhilesh De. Together they dig into how the erstwhile FTX CEO could have misled the world to such a degree.

They explore Bankman-Fried’s journey, how it begins with his adherence to the principles of effective altruism, a stated desire to get as rich as possible to do maximum good, and how it all seems to fall apart as FTX gets bigger. They discuss how his philanthropy, political donations, and marketing efforts hid the dark reality underneath and delve into what needs to happen, at the community level and in regulation, to protect people falling from such distortions in the future.

This episode was produced and edited by Michele Musso with announcements by Adam B. Levine and our executive producer, Jared Schwartz. Our theme song is “Shepard.”