The New York Times got blowback over an article it published on Sam Bankman-Fried, with critics slamming it as a puff piece on the accused crypto fraudster.
The Times quoted Bankman-Fried extensively for a story whose headline reads: “How Sam Bankman-Fried’s Crypto Empire Collapsed.” The article describes Bankman-Fried as “SBF,” noting that he spoke to the newspaper in an interview on Sunday.
According to the article by Times crypto and fintech reporter David Yaffe-Bellany, Bankman-Fried seemed “surprisingly calm” in the interview, which lasted until after midnight.
“You would’ve thought that I’d be getting no sleep right now, and instead I’m getting some,” Bankman-Fried, whose company was worth as much as $32 billion a year ago, told the Times. “It could be worse.”
Matt Novak, a media critic with the news site Gizmodo, writes that 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.”
“It reads like if the Times had conducted an interview with Bernie Madoff after his ponzi scheme collapsed and ultimately suggested he just made some bad investments,” Novak writes.
In the Times interview, Bankman-Fried declined to go into details about FTX’s handling of customer assets, which were apparently used to make risky bets through a subsidiary, Alameda Research.
Bankman-Fried told the Times that Alameda Research, which was run by Bankman-Fried’s on-again-off-again girlfriend Caroline Ellison, amassed a large margin position on FTX, which means it had borrowed money from the company.
“It was substantially larger than I had thought it was,” Bankman-Fried told the Times. “And in fact the downside risk was very significant.”
“Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough,” Bankman-Fried added during his interview with the Times. “That would have allowed me to catch what was going on on the risk side.”
On Twitter, reaction to the Times story was scathing.
“Disgraceful reporting by the @nytimes on FTX,” one Twitter user tweeted.
“It portrays SBF as a charitable entrepreneur who went under and does not mention the words fraud, criminal, substance abuse, friends & family Bahamas KYC racket, hack, stolen funds or wiped servers anywhere.”
The Post has sought comment from the Times and Yaffe-Bellany.
Novak points out that Bankman-Fried expressed little remorse in the interview. The FTX founder told the Times that his crypto exchange company “expanded too quickly” and that he “missed the warning signs.”
Reuters reported that at least $4 billion of FTX funds, including customer assets, were used to fund Alameda Research’s activities — an apparent violation of US securities laws.
Gizmodo also slammed the Times for its “crypto-industry-friendly way of talking about” FTT, the digital coin that FTX created in order to “facilitate trading on its platform.”
FTX’s collapse was hastened after Changpeng Zhao, the CEO of rival Binance, announced on Twitter earlier this month that he was selling his cache of FTT — this just three years after Zhao bought a 20% stake in FTX.
The token’s price collapsed 80% over the next two days and a torrent of outflows from the exchange gathered pace, blockchain data show.
“In reality, FTT was created by SBF for the same reason that any other cryptocurrency has been created: as a speculative asset that allows early investors to extract wealth from people who place money into the asset after the price has soared,” Gizmodo’s Novak writes.
Zhao’s tweet, which was posted after he learned that Bankman-Fried had been urging US regulators to target Binance, alarmed FTX customers who rushed to withdraw their deposits from the exchange.
Bankman-Fried told the Times that he regretted targeting Zhao, saying it “was not a good strategic move on my part.”
“I was pretty frustrated at a lot of what I saw happening, but I should’ve understood that it was not a good decision of me to express that,” Bankman-Fried told the Times.
With Post wires