While crypto bro scammed clients, reporters scammed readers

https://fair.org/home/while-crypto-bro-scammed-clients-reporters-scammed-readers/

by thm • 4 years ago

330 194 4 years ago

And when FTX folded, the same press was still writing puff pieces about SBF trying to make excuses for his behavior, painting that "genius" as just an incompetent but well intentioned man when he was always a crook running a Ponzi scheme and selling securities illegally, because that press could not admit their own responsibility in building a false profile of SBF thus their own utter corruption and lack of critical thinking or just doing their job, investigate and search for the truth...

rini17• 4 years ago

The question is, who is going to pay for critical business reporting? The readers - wannabe CEOs - won't, and the businesses in question won't buy advertising either.

lupire• 4 years ago

WSJ and FT readers will, because good information is profitable.

eduction2• 4 years ago

The WSJ wrote one of the listed puff pieces. In fact, it was written by their global tech editor (a Q&A without much pushback on the optimistic claims SBF was making). Perhaps the most egregious examples was from NYT, which also charges for its content and is highly profitable.

gruez6• 4 years ago

Ironically the initial story was broken by coindesk, not WSJ, FT, or Bloomberg.

amusedcyclist• 4 years ago

WSJ is an absolute rag. FT is very good and worth the money

323• 4 years ago

If you are into profitable information you buy a Bloomberg Terminal and also subscribe to Reuters news.

Finance types don't read WSJ/FT/Economist, this is the "popular" financial press.

zetazzed• 4 years ago

These are all critiques of reporting on a quirky celebrity CEO. Serious question - was there a lot of coverage that said something like “FTX is safe” or “FTX is a good place to park your money”? I agree that there is a long tradition of uncritical puff pieces in CEOs. But this seems like a different position from “<insert your hated publication here> misled sheep to the crypto slaughter.”

cma• 4 years ago

The journalist/author Sequoia hired wrote:

Something of the sort must happen eventually, as the current system, with its layers upon layers of intermediaries, is antiquated and prone to crashing—the global financial crisis of 2008 was just the latest in a long line of failures that occurred because banks didn’t actually know what was on their balance sheets. Crypto is money that can audit itself, no accountant or bookkeeper needed, and thus a financial system with the blockchain built in can, in theory, cut out most of the financial middlemen, to the advantage of all. Of course, that’s the pitch of every crypto company out there. The FTX competitive advantage? Ethical behavior. SBF is a Peter Singer–inspired utilitarian in a sea of Robert Nozick–inspired libertarians. He’s an ethical maximalist in an industry that’s overwhelmingly populated with ethical minimalists. I’m a Nozick man myself, but I know who I’d rather trust my money with: SBF, hands-down. And if he does end up saving the world as a side effect of being my banker, all the better.

eduction2• 4 years ago

Has anyone archived a copy of this somewhere online? And who wrote this?

notahacker4• 4 years ago

Sure, but Sequoia's hilarious hagiography wasn't mainstream journalism, it was a PR piece posted by a company that didnt exactly hide how deeply invested in his success they were. (Also probably too long and too weird to tempt many people into using his exchange. My favourite paragraph was the one that speculated at length whether SBF was incapable of feeling pleasure. You don't get that in Forbes puff pieces!)

nullc9• 4 years ago

An article that omits any whiff of risk while heaping on the praise is implying that it's safe, or at least implying that there weren't any obvious red flags.

trompetenaccoun• 4 years ago

Worse he gave "grants" through one of his foundations to news outlets like Vox, Intercept, ProPublica, and others. Vox did not even put a disclaimer about them having taken money from him in the fluff pieces they put out. They have only started doing so after the implosion of FTX, probably to ward off potential controversy.

gruez6• 4 years ago

or at least implying that there weren't any obvious red flags.

Well? Were there any credible red flags? Aside from the standard "all crypto is a scam" rhetoric, SBF/FTX looked pretty clean before the collapse.

chiefalchemist• 4 years ago

he received little scrutiny in the media. On the contrary, he was celebrated.

It's not just this issue that the media plays follow the narrative. Not only that, they're all in on the ruse. That is, none are willing to call out the others for constantly half-assing it.

It might not be a corporate monopoly, but it's a monopoly of the mind.

nathias2• 4 years ago

the CEO of FTX stole his customers funds, nothing to do with crypto, nothing to do with reporters

code_runner2• 4 years ago

The most reputable spokesman the crypto space has managed to cough up was a fraud and a thief. Maybe has something to say about crypto.

nathias2• 4 years ago

how is he most reputable? because he paid a lot for ads?

throw_m2393392• 4 years ago

Reporters helped SBF build a credible profile in order for him to steal money, everything to do with reporters writing glowing reviews of SBF and his fraudulent business in exchange for kickbacks of all sorts, including direct grands to several news outlets, which makes reporters corrupt.

derbOac• 4 years ago

This makes a critical point, one that needs to be taken to heart societally at large, but I feels like it undercuts itself by burying its main arguments. The problem isn't just crypto, or business, but rather something about modern society at large -- academics, politics, the workplace, and so forth and so on, celebrity or not. There's a sort of naive head in the sand acceptance or embracing of hype that pervades everything, without enough critical caution or skepticism. SBF/FTX is a good example but by framing the article so strongly around it the broader message is diminished somewhat.

jl6• 4 years ago

Same vibe in medicine. Doctors and medical researchers carry a great weight of authority. Some medical treatments can be mainstream for years, before research finally self-corrects. Lobotomy, opioids, and more.

“It’s a perfectly safe and normal procedure”.

itronitron3• 4 years ago

Regarding opioids, I recall that in the mid `90's when I listened to about 4 hours of NPR during work every day the host (Dianne Ream?) had reps from Purdue Pharma (or one of the other opioid purveyors) in which the pharma reps were basically saying that doctors weren't prescribing enough pain medication for their patients. I recall the host really challenging them on each of the points they were trying to make, which was out of character for her and stuck in my mind.

Point being, I expect that at least some of the guests are arranged without much input from the hosts. There must be heavy politicking involved to get bandwidth in mass media, and the people actually doing the work (running interviews or writing articles) can only push back to the degree that they have some degree of control over the network or channel.

Scoundreller3• 4 years ago

Ignorance of aerosol transmission of respiratory viruses was a good one. Even contact transmission of respiratory viruses is hanging on a thread.

Not sure what these people were thinking I was doing with whatever I touched day-to-day.

Going through similar things with avian flu. "Experts" think I inhale raw chicken and that birds don't really care about borders. https://www.cbc.ca/news/canada/windsor/windsor-cfia-poultry-...

Or the assurances that the new food guide is no longer tainted by food/farming industries.

rosnd• 4 years ago

Opioids are a perfectly good treatment and should be mainstream. Extremely effective with minor side effects.

Vt71fcAqt72• 4 years ago

Exactly. It also doesn't help that >90% of "journalists" have no clue what they're talking about. But it doesn't matter for revenue because 99% of their readers know even less.

walrus01• 4 years ago

90% of "tech journalists" wouldn't be worthy of the title.

When I look at the writing and output from any particular text media journalist, particularly on the subject of many things related to global geopolitical issues, I ask myself, "is this something that would be seen as neutral and impartial, ethical journalism by Steve Coll?" [1]. Often the answer is no.

[1] https://en.wikipedia.org/wiki/Steve_Coll

rpgbr2• 4 years ago

Journalist's job isn't to master a field they cover (although this can help a lot), but to know what questions to ask to whom. Lack of skepticism and fact checking is, indeed, sins of the profession, but that's it.

hotpotamus3• 4 years ago

I mean, you need some reason to get out of bed in the morning, and naive optimism sounds a lot better than my dread of the consequences if I don't.

itronitron3• 4 years ago

Depends, I don't use them myself (yet) so I usually get out of bed in the morning to use the toilet.

pessimizer2• 4 years ago

There's a sort of naive head in the sand acceptance or embracing of hype that pervades everything,

I don't think this is true. I think that people who are selling things generate hype for those things that they're selling, and our media not only depends on those sellers to pay for ads, but additionally is owned by people who are also invested in those things that are being sold.

I think this can easily be misinterpreted as everything being hyped up, rather than everything being designed to trick you into supporting things that benefit people who sell, whether they're politicians or toilet-brush sellers. This is happening because our politicians, toilet-brush sellers, and media are owned by the same people. They rely on you buying in, or at least not being able to organize or sustain an opposition. We've allowed the world to consolidate so much that separating sales and news is impossible. They're operating from the same address.

Main point: not everything is being hyped. Scams that benefit the people who own the media that hype spreads through are being hyped.

mc32• 4 years ago

Journalists are human and as such also fall to the same pitfalls of most people. So they fawn over Apple, or Google or a new Show on Netflix --reflexively. There are some who do do in-depth analysis and some of those who do do analysis go overboard and go full-on post-modernist/intersectional on their subjects when all we want is a skeptical and more or less objective approach to reporting. We don't want "narrative" and storytelling --that's for longform writing.

Melting_Harps2• 4 years ago

> There's a sort of naive head in the sand acceptance or embracing of hype that pervades everything,

Speak for yourself, I was saying this guy was going to end up in black site prison in the Summer of '22 as CONbase was looking like it was going to be insolvent, SBF's meddling in the US political system just underscores the MO of the well-heeled of SV, VC and political circles. In many ways this represents what that class does in any ecosystem: it does it in the stock market, the energy market, pharmaceutical drugs, Ag seed IP etc... it's all just a means to an end.

Why weren't we having this conversation with memestocks and it's blatant collusion between the hedge fund World and regulators and even the Stock Market itself when it pulled the plug as it suffered too many one day loses? It almost makes me think this was intentional, a sort of deliberate narrative to push to ignore the blatant level of grift that is wide-spread in this economic system. The only question is cui bono?

Main point: not everything is being hyped. Scams that benefit the people who own the media that hype spreads through are being hyped.

Yield farming was hyped in every conceivable manner, and it was HEAVILY resisted in the Bitcoin community because we had seen some variation of this before; Celcius and 3 arrows were also pushing this scam and were equally vilified at that time for the scam that they were, in fact when someone explained to me what Caradano was I felt it was just another MLM playing out in token form. I initially tried to talk people out, but I've been around long enough to know that getting burned is what it often takes for people to learn why this tech was invented in the first place.

People won't listen when everyone is getting paid as it feeds off of some basic Human urges: greed. It isn't until it all comes crashing down that people who once hailed as genius by the media or VC World in SV, likely paid to do so, are seen for the scammers that they are.

This is happening because our politicians, toilet-brush sellers, and media are owned by the same people. They rely on you buying in, or at least not being able to organize or sustain an opposition. We've allowed the world to consolidate so much that separating sales and news is impossible. They're operating from the same address.

Well said, I highly recommend this series on the Murdoch's [0], I wasn't aware of how far Rupert's reach was in some key events in History (Berlin Wall, early 2000s Hong Kong) in order to sell a specific narrative, and I only vaguely recall how sensationalist his programming like 'A Current Affair' was at creating Fake News for sensationalism that drove sales.

Hell, it even seems like what Elon is doing at Twitter is exactly a page out of Murdoch's book with a paper he bought in the UK.

0: https://www.cnn.com/shows/the-murdochs-empire-of-influence

enkid• 4 years ago

Hype wasn't called that, but there was plenty of "hysterias" and "manias" previously in history. Look at the Dutch Tulip Bubble or the reporting that led to the Spanish American War. Not saying it's not a problem, but it is not about modern society, it's about human nature.

ilrwbwrkhv2• 4 years ago

I think social media is directly responsible for that.

I was just listening to some Christopher Hitchens videos yesterday and was reminded of just how articulate and elegant his arguments were.

Compare that to modern "intellectuals" like Jordan Peterson. Complete rabble rousers.

Social media has allowed cowardly arguments to be made mainstream and that has weakened our total global human B.S. detector by a ton.

Imagine crypto had to be popular without social media. It would have been ripped apart just like Marc Andreessen was ripped apart on that podcast for his intellectually vapid ideas.

It is really a shame how much harm social media has done to our species.

refurb3• 4 years ago

The same Christopher Hitchens that went pro-Iraq War and got water boarded himself?

Do you have a better example?

pixl972• 4 years ago

Um, modern society?

https://en.wikipedia.org/wiki/Tulip_mania

AtlasBarfed• 4 years ago

Our country sucks up to elites, because their vast wealth makes them gods.

The fourth estate is totally owned by the elites, and there is no real dissent with the views of the wealthy. That's why global warming is only now recognized at all (three decades late), because it is actually on some of their radars now.

partiallypro• 4 years ago

This core issue is one that surrounds a lot of investments/companies: A lot of "smart people" like (or hate) this, so if I question it, they will think I'm dumb or not with the "in crowd." Basically, every financial scandal you can think of in the past 30 years had the press absolutely excited about it and pumping it. Enron, Maddoff, FTX, Theranos, WorldCom, Tyco, etc. One problem I've encountered is that a lot of people in the press are not trained in the field they are reporting on. So, they actually have no idea if you're blowing smoke.

I worked with a newspaper and major publisher earlier in life and was shocked at how ignorant people that we read every day are on the very topics they are reporting on. Not to mention the abuse of alcohol and drugs that happens in the newsroom, which was baffling. The media does a lot better when it is looking at events and reporting on that rather than trying to derive some narrative or to get a scoop, especially when it involves business or government fluff. It doesn't help that a lot of journalists have what feels like a need for validation, but at the same time have big egos. All of these big scam artists know that and feed them.

ChadNauseam• 4 years ago

This is a bit of a tangent (and a response to only the title, which I admit is bad form) but what’s with the prevalence of adding “bro” at the end of random words? Can a woman be a crypto bro or a tech bro?

It reminds me of when everyone was talking about “brogrammers” a while ago, and it had a pretty clear connotation of “programmer who loves keg stands, hitting the gym, and making misogynistic comments”. I think “crypto bro” and “tech bro” don’t have that connotation at all, or at least that’s never how I perceived SBF.

cuteboy192• 4 years ago

I hope that one day we will live in a world where half of all crypto scammers are female. But today most of them are young men

LexGray• 4 years ago

Spend some time on dating apps. I would estimate in a call center environment there is a high number of female employees running the those scams off a script. All sorts touting their investment opportunities to anybody desperate enough to listen.

wmf2• 4 years ago

The "crypto bro" stereotype came from real people who combined a love of crypto with bro behaviors like aggressive rhetoric, shameless self-promotion, and flaunting their wealth (e.g. talking about lambos all the time).

onetimeusename4• 4 years ago

Women do that stuff too. I have seen women promote crypto scams as well. It is subtly misandrist to use these terms I think. But no one will stop using it because that is part of the society wide perception of men being viewed as less moral than women.

twic2• 4 years ago

While the bro meme emerged to describe the kegs and kettlebells thing, i think it's shifted to mean something like "someone massively overconfident who gets ahead through bullshit, backscratching, and reality distortion, rather than through actual talent".

Under this definition, women absolutely can be bros. And neither men nor women, nor anyone else, are usually bros, it's a rare thing.

comex• 4 years ago

It reminds me of when everyone was talking about “brogrammers” a while ago, and it had a pretty clear connotation of “programmer who loves keg stands, hitting the gym, and making misogynistic comments”. I think “crypto bro” and “tech bro” don’t have that connotation at all, or at least that’s never how I perceived SBF.

I’d say they have related connotations. Less about explicit invocations of masculinity like beer and the gym, more about being egotistical or solipsistic or “highly confident in oneself while actually being wrong”. Not quite the same thing as the traits you mentioned, but associated with them, for better or worse.

Xorakios• 4 years ago

https://www.businessinsider.com/caroline-ellison-ftx-alameda...

kayamon• 4 years ago

People like calling others names rather than discuss the actual issues.

onetimeusename4• 4 years ago

I am just surprised no one questioned the partnership between Alameda and FTX. The equivalent would be something like if a large HFT firm like Citadel, Virtu, or one of the others had the same ownership with a brokerage like Robinhood or Charles Schwab or even formed a partnership. I think the financial media would be questioning the incentives.

I read in the WSJ today that Alameda had indeed done price arbitrage trades on the FTX exchange. The closeness of these two firms should have raised questions I think. I really don't know a lot about it because I was never involved in either FTX or Binance. But I think most financial journalists are trained to spot disincentives and corruption that come with marrying trading firms and exchanges. So I am surprised that did not happen leaving aside other questionable items.

itronitron3• 4 years ago

> The equivalent would be something like if a large HFT firm like Citadel, Virtu, or one of the others had the same ownership with a brokerage like Robinhood...

Yeah.

lumb63• 4 years ago

Doesn’t Robinhood sell order flow to Citadel?

Scoundreller3• 4 years ago

Not just Robinhood selling order flow. Robinhood was just the first to say "we can make enough money with order flow, so let's cancel trading commissions".

Other brokers really hated that.

onetimeusename4• 4 years ago

yes. It was widely reported on and criticized though and I believe the SEC decided not to ban it. This article[1] has some details but it seems like the SEC may not be able to. However, none other than Gary Gensler criticized the practice. That's my point is how different the reporting was on RH versus FTX over a similar practice.

edit: FWIW this is not even the biggest issue. Alameda making bets with FTX customer money seems to be the biggest problem. I am bringing this up because closeness between a trading firm and an exchange might have been an early clue to financial journalists that the relationship should be scrutinized.

[1] https://www.cnbc.com/2022/09/22/robinhood-jumps-after-report...

wmf2• 4 years ago

Many people saw it as a positive that FTX had a "built-in" market maker. People also thought that Alameda were geniuses.

It's considered a cost of doing business that all offshore crypto exchanges are trading against their own customers.

conanbatt2• 4 years ago

Brokers like Robinhood would love to not have to rely on a third-party market-maker, because it can vertically integrate. Citadel had the years of its life during the bull run in great part to RH.

Market making can be neutral, it's not a big conflict of interest. What is a conflict of interest is placing bets in the market with what can be information of traders on the FTX platform - i.e. people buying solana and Alameda leveraging that direction on the information - or people leveraging on FTX and Alameda making liquidating plays.

retconn3• 4 years ago

After Glass- Steagal was repealed, structural conflicts of interest putting the totality of supposedly safe deposits at the service of gambling has been standard operating procedure for the street and hence the country.

autotune3• 4 years ago

It's easy to look back and say "it should have been obvious," but besides those who had general disdain for crypto like Buffett aside, were there any MSM outlets that actually saw through SBF for what he was at the onset and wrote an actual article about it before this all occurred? Because I can't seem to find any, and this just makes me want to avoid reading the news altogether at this point.

JeremyNT• 4 years ago

I read this article and I think this is the entire point. You can't trust corporate media's coverage of would-be wunderkind "entrepreneurs."

Between access journalism, hero worship, a narrative formula that's known to sell, and laziness, journalists are all too glad to not only look the other way, but actively curate a reality distortion field on behalf of bad actors.

It's not just that they didn't see through SBF, it's that it never would occur to them to even look. That's simply not what they are optimised to do when they cover this class of person.

autotune3• 4 years ago

Yeah, the best any of them can say at this point is "we ignored publishing anything on him," and that was more likely due to sheer luck than responsible journalism.

koofdoof• 4 years ago

The book "Trust me I'm lying" goes into detail about this phenomenon. It is the interest of the media to be tricked, the authors get big stories and clicks and can then turn around and play dumb if things blow up. No one remembers the individual journalist who wrote the puff pieces, so the negative effects of eroding trust fall to a tragedy of the commons situation.

Lerc2• 4 years ago

It's not clear to me that there was anything to 'see though'. This makes him seem like a Machiavellian genius putting up a front. It seems entirely possible that he is exactly what he seems. Sincere but lacking the skill and wisdom to run a large financial organization.

While ignorance of the law cannot be used as a defense for breaking it, an organization such as FTX comprises a complex interaction of financial, technological and legal issues. You can easily imagine naive hands breaking multiple laws in their ignorance.

It is also possible that they did things knowingly illegal only after their lack of experience had put them into a situation where they were trying to stabilize a teetering house of cards.

Some things are hard, very hard. In some domains, being clever without being an expert doesn't work.

It is also worth mentioning that the media sources that said how great things were going are also the same ones that are telling us how badly it ended up. I say 'possible' and 'imagine' above because we can't really get a good picture of what happened from reading a few articles. There will be a few good well researched summaries in a few years time. Hardly anyone will be interested by then; besides, the truth will be boringly complicated and nuanced.

autotune3• 4 years ago

This makes him seem like a Machiavellian genius putting up a front.

It is not so much that he was a "Machiavellian genius," it was that he was basically the main character in Idiocracy; the smartest one in the room, but the room was a circus made for his own entertainment than anything else.

an organization such as FTX comprises a complex interaction of financial, technological and legal issues.

It is unclear if this complexity was designed specifically to hide blatant acts of fraud or just cover up incompetence. Either way, the lack of transparency does not look good for him.

It is also worth mentioning that the media sources that said how great things were going are also the same ones that are telling us how badly it ended up.

I am sure the individual investors who got scammed out of their investment(s) due to getting suckered into it by the MSM will be more than forgiving as well.

There will be a few good well researched summaries in a few years time. Hardly anyone will be interested by then; besides, the truth will be boringly complicated and nuanced.

Until the next fraudster gets propped up and we can all look back to this and hope for the revival of independent, constructive journalism that the internet was supposed to bring over this current iteration of the MSM circus.

asiachick• 4 years ago

Ignorance of the law can be use for breaking it for cops

https://www.vox.com/2015/8/4/9095213/police-stops-heien-v-no...

adastra22• 4 years ago

Pretty much everybody deeply involved in the crypto space, especially old timers, suspected something was off and stayed away. There are lots of examples of people deep in crypto sounding an alarm before it all went belly up. When the most crazy shenanigans started in June (fraudulently modifying customer orders to cover FTX’s own losses), there were calls for people to pull their money out.

The thing is though, mainstream media kept publishing fluff pieces.

eternalban• 4 years ago

Same thing with early stories on Epstein. He is just presented as a successful investor. And then decades later, they start (even then in a very tepid fashion) asking questions like "where did he get his money?", "why did Wexner give him a mansion and power of attorney?", etc.

Now we hear this (in 2021) but it happened ~3 decades ago:

"On one of Levin’s trips to New York in 1989, Wexner asked him to meet a brilliant young financier who wanted to pitch an investment opportunity.

"Levin had never heard of the man, Jeffrey Epstein, which was odd. After working for Wexner for seven years, Levin knew virtually every player on Wall Street (a few months earlier, Levin says, he met with arbitrageur Ivan Boesky). Levin’s skepticism was confirmed as soon as he arrived at Epstein’s Madison Avenue office. There were no visible signs of a trading operation; just Epstein sitting behind a desk that didn’t even have a computer. “Epstein was trying to explain a currency trade he wanted to do. I have an MBA from Ohio State, and I didn’t understand a word the man said,” Levin recalled. Levin went back to Columbus and reported that Epstein was a fraud. “I told Les, ‘Stay away from him,’ ” Levin remembered. Wexner agreed not to do the trade."

"Levin was shocked when Epstein showed up in Columbus a few months later and announced Wexner had put him in charge of his finances. Levin tried to protest but says Wexner wouldn’t take his calls. Levin couldn’t stand having Epstein as a boss. “He was an asshole. The most arrogant person I ever met,” Levin recalled. A few months later, Levin quit.

"Levin said Epstein taunted him on his way out. “On my last day, Epstein walked into my office and held up a piece of paper. He bragged that Les had given him power of attorney over his money. I worked for Les for seven years and I never had general power of attorney,” Levin said. Epstein, Levin continued, even ordered him to surrender equity in Wexner’s town project, likely costing Levin millions. “Epstein basically said, ‘If you want, you can fight it out, but I have a lot of lawyers and I’ll make sure it’ll cost you a fortune.’ ”

https://www.vanityfair.com/news/2021/06/inside-jeffrey-epste...

This is NYTimes mentioning Epstein and Wexner (with a heads-up on surveillance to visitors /g):

"Mr. Wexner bought the house in 1989 for $13.2 million and lavished tens of millions on renovations, art and furnishings. Those curious to see the princely accommodations Mr. Wexner abandoned need look no further than the cover of last month's Architectural Digest. When asked how long Mr. Wexner had occupied the property, Jeffrey Epstein, his protege and one of his financial advisers, replied, "Les never spent more than two months there." Thus the prorated cost of Mr. Wexner's sejours would appear to have been in excess of a million dollars a day.

"Visitors described a bathroom reminiscent of James Bond movies: hidden beneath a stairway, lined with lead to provide shelter from attack and supplied with closed-circuit television screens and a telephone, both concealed in a cabinet beneath the sink."

https://www.nytimes.com/1996/01/11/garden/home-sweet-elsewhe...

Btw, this is the one and only (in NYTimes, WSJ, NewYorker) article mentioning J.E. in 1990-2000 range per google (for me at least).

not_kurt_godel• 4 years ago

Not reading any news at all is like not voting. The need to be informed in order to effectively participate in civic life does not magically go away just because you recognize that there are systemic problems.

Likewise, referring to all journalism as "the news" is making the same fallacy as referring to "the government" as a singular being. Neither are completely monolithic entities with anthropomorphic agency.

dimgl• 4 years ago

People have been steadily losing trust in the media for years. All it had to take was a few responsible people to do some probing and realize that it's all a scam. The issue is that there's money to be made in promoting crypto, and therein lies the problem.

There's no way anyone can say they didn't see it coming. There's a whole subreddit dedicated to making fun of crypto and a website has existed for years now that archives every grift https://web3isgoinggreat.com/. So, yeah, I think the media is just fundamentally flawed and I'm not sure what the answer is.

dehrmann• 4 years ago

It wasn't just the Buffetts of the world. Did any credible financial advisors or economists say speculating on crypto is a good idea?

Panzer04• 4 years ago

There’s a substantial amount of evidence for FTX scepticism around form 6-12m ago, or even longer. (https://www.reddit.com/r/Buttcoin/comments/pjv86z/ftx_just_b...)

In the mainstream news, I’m not sure, but there were clear reasons to be skeptics, and that no one with any money involved did real DD beggars belief.

Barrin92• 4 years ago

I'm less surprised by the media coverage of the entire fiasco because when on earth have they ever not written sympathetically about your average millenial do-gooder cause driven entrepreneur, what I ask myself is, how have the investors not seen this coming, who are after all the people who open their own wallets for this and are professionals.

And not just this case but any of the recent crypto-company explosions that lost customer funds to the tunes of hundreds of millions. There are experienced funders behind this who tout themselves on being able to differentiate BS from reality.

People love to drag the NYT but I don't really expect them to have really deep insight into these firms, on the other hand people are way too uncritical of the whole Sequoia/al6z/etc alternate media machinery around this.

notahacker4• 4 years ago

And let's be honest, the media are mainly writing the articles because the top tier investment professionals have spent millions of dollars giving the Bahamas crypto guy their seal of approval.

They're not giving the same amount of positive spin to any old crypto guy who says he wants to save the world.

1vuio0pswjnm7• 4 years ago

"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."

Another example from the so-called "dot-com boom" who went to work at Prudential and later Merrill Lynch.1

1. https://www.nytimes.com/2007/02/18/business/yourmoney/18shel...

After he was banned from working on Wall Street for life he returned to journalism and co-founded "businessinsider.com".

friend_and_foe• 4 years ago

This is just excuse making for journalists.

They promoted him because they're as unscrupulous and devoid of ethics as he is, by and large. He didn't win them over with some con man charm, he won them over with money, or the allure of money, or even probably some politicking.

ChrisMarshallNY• 4 years ago

How could no one have seen this coming?

I always hear this, after one of these Jurassic-scale meltdowns.

The hard truth is, is that lots of people saw it coming, but everyone was making money, and they were all hoping that they'd "get theirs," before things went pear-shaped.

Greed does strange things to the human mind...

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

-Upton Sinclair

"There’s no free lunch in this world unless you’re willing to run around to different dumpsters to get it."

-Stay SaaSy

pixl972• 4 years ago

I've been one saying this to the coin people for years....

"You think crypto is a new design that somehow overcomes scammers while completely ignoring that every market that has ever existed has had scammers and has had to develop either impromptu or formal regulations to prevent said scammers from destroying the market. Your leaders are frauds. Your day of reckoning is coming."

That day is finally here.

satvikpendem• 4 years ago

Bears make money, bulls make money, pigs get slaughtered.

dotnet002• 4 years ago

Yep, this has been my observation too with friends investing in crypto (fortunately they at least understand the golden rule of not investing more than they can afford to lose).

They ask me about some new coin that offers some absurd gains and after looking through it, it becomes obvious that it's super sketchy and potentially a Ponzi scheme, I explain that to them and they proceed to go for it anyway because they think they'll be able to pull out before it goes bust.

It was the same about SBF. I'm generally a fan of crypto (specifically with projects that have genuine utility though), but it was always obvious to me that he was probably doing something like this simply from all the hero worship surrounding him. Part of it is probably that successful CEOs of billion dollar companies don't tend to have such a goody-two-shoes type of reputation. Every big tech leader has had a pretty bad reputation while they've been in that position.

fasthands9• 4 years ago

I have never bought any crypto but admittedly I bought into a lot of the mythology. I had assumed he was making money by being a large exchange and front running trades.

crazygringo• 4 years ago

No, reporters didn't "scam" readers.

I'm sick of people trying to twist words to mean things they don't.

Scamming someone requires obtaining something like money in the process (fraudulently). SBF ran a scam because he took people's money and used it fraudulently.

Reporters just ran puff pieces. But they didn't defraud anybody. The reporters weren't investors in Alameda. They didn't obtain anything except the normal salary they get for any story.

So no, reporters did NOT "scam" readers. They just engaged in run-of-the-mill journalism. You can critique that all you want, but it still falls under the category of "journalism", NOT the category of "scam".

conanbatt2• 4 years ago

Newspapers sell legitimacy and scammers can buy it. SBX is a pretty significant example of the eroding value and public perception of media

rightrightnot• 4 years ago

Except we don't know how many of them got any kickbacks, and we probably never will. We don't live in moral utopia.

dymk• 4 years ago

What’s your evidence that any of them received kickbacks? Why’s your default assumption guilty until proven innocent?

nullc9• 4 years ago

We know for a fact that SBF gave donations to ProPublica, the intercept, vox, and others. What we don't know and is probably unknowable is to what degree those payments influenced the reporting.

epolanski• 4 years ago

Reporters report, don't comment, so the correct word to use here is always journalists.

factsarelolz3• 4 years ago

They just engaged in run-of-the-mill journalism.

Click bait puff pieces/native ads intended to drive money into FTX. They're an accomplice.

Swenrekcah2• 4 years ago

Is everyone who tweeted nice things about SBF also an accomplice?

rjzzleep2• 4 years ago

Remember the Fyre festival scam? The PR agencies knew it was a scam and went along with pushing and then said something philosophical about whether they should be responsible or not for "just doing their job". Their entire job is to make gold out of dog poop, so yes, they share some responsibility.

The definition of the word journalism is as follows:

"journalism, the collection, preparation, and distribution of news and related commentary and feature materials"

These people do not actually do journalism. They are in effect PR shills. The very first part of the definition is not done. They don't actually collect information, they just publish what they're handed in the most enthusiastic manner.

esperent• 4 years ago

scamming someone requires obtaining something like money

I would say "something of value". It doesn't have to be money. Attention is valuable - personally I consider it my most scarce and valuable resource.

I don't think it's unreasonable to create a comparison between stealing people's attention and stealing people's money. We focus a lot on the latter, but we are starting to focus on the former too, usually in the form of criticizing social media.

Take Facebook. They grabbed people by creating a system to connect with friends, family etc. and created an inescapable network effect for an entire generation. Then they morphed slowly into an outrage generation private data stealing machine to the huge detriment of millions of people - entire countries in fact, like Myanmar. The money they make is one step removed from the people being scammed, which makes it a little harder to directly characterize this as a scam. But it is a scam, just as much as this crypto stuff is, only far worse.

Reporters running puff pieces to generate outrage - or rather, their publications - are doing the same. Stealing your attention to get money from advertisers. They are just less successful. Same sea, tiny biting fish where Facebook is a shark.

kube-system• 4 years ago

I don't know about the outlets mentioned in this article, but there are a few different ways that PR firms can grease the media gears in order to get you good PR coverage. Ranging from, literally paying for a piece to be run, to more subtle things like handing them timely content on a silver platter. Maybe no money is exchanged hands, but they get some of their work done for them instead. It is still value exchanged without money being exchanged.

xdennis• 4 years ago

It's true that it's not an actual scam, but I do agree with the use of the strong language in calling it a "scam". Journalists are supposed to report things objectively.

Instead of giving a balanced perspective, the fall into the trap of portraying individuals as heroic geniuses or villainous morons (presumably because it sells better). If they're not going to be objective then they kinda deserve to be called out.

TacticalCoder• 4 years ago

Reporters just ran puff pieces. But they didn't defraud anybody.

And they running puff pieces after the scam was uncovered. And they're trying, after having presented SBF as a genius, to now make believe people that it's only leveraged trades (to the tune of tens of billions of dollars) with customers fraud gone wrong.

Why is anyone still reading the garbage coming out of these papers that aren't even suitable as toilet paper is beyond me.

Meanwhile there are people out there who exposed the Alameda Research ponzi before FTX was even created. It was the same ponzi as the Bitconnect ponzi: say you notice crazy arbitrage [1] and promise insane returns "guaranteed zero risks".

Insane returns promises have a name: scam. Giving the insane returns to the early investors while keeping the scam going as another name: ponzi.

And this was all explained years before the ponzi was exposed.

And in addition to that US congressmen and senators are accusing SBF and ex-officials and officials to be working hand in hand to allow FTX regulatory capture of the crypto exchange market...

And you dare tell us that the journalists trying to sell the "leverage trades with customers money gone wrong" are still... Journalists engaged in run-of-the-mil journalism?

Despite all the donation SBF made to these publication?

Please.

I mean: the only other explanation is that these journalists are so incompetent they shouldn't be allowed anywhere near a keyboard. They should be flipping burgers and even then I wouldn't want to eat the poison they'd be serving.

WalterBright2• 4 years ago

The thing to remember about journalists is that they have a degree in journalism. Not math. Not science. Not engineering. Not politics. Not economics. Not medicine. Not agriculture. Not history. And certainly not statistics.

But they pontificate as if they are in possession of revealed truth.

What they wrote about the 737MAX is a stellar example of such ignorance. The only correct sources of information about it came from Aviation Week or official NTSB reports. The rest was all garbage.

Jerry23• 4 years ago

New York Times is _still_ providing SBF cover by allowing him to speak at DealBook Summit later this month [1]. He's joined by such luminaries as Zuckerberg, Affleck, Fink, Zelensky etc. They invited him to speak long before the FTX imploded and now call SBF "Founder, FTX" instead of "CEO, FTX". The conference is by invite-only and costs $2,499 per person.

[1] https://www.nytimes.com/events/dealbook-summit#sessions

UberFly• 4 years ago

New York Times / David Yaffe-Bellany are looking pretty bad in this. Bordering on straight-up propagandists. Yaffe-Bellany should have his kick-back accounts looked over a bit.

matdehaast• 4 years ago

You need to read The Gray Lady Winked. This isn’t something new for the NYT. This is par the course for the last hundred years

shapefrog7• 4 years ago

New York Times is _still_ providing SBF cover by allowing him to speak at DealBook Summit later this month [1]

NYT is providing the US government with an oportunity to arrest SBF. If the guy is dumb enough to turn up, he wont get more than a few feet from his gulfstream before he is in irons.

Jerry23• 4 years ago

The talk will be virtual... he'll ZOOM/Skype it in.

nitwit005• 4 years ago

Go find some long article from a major newspaper on a current CEO. It's likely to be positive, glowingly positive. The industry doesn't matter.

The CEOs won't provide an interview unless they feel the coverage will be positive, and people tend to want to read about rising successes, so negative articles face an uphill battle.

jeroenhd• 4 years ago

This, but there are more factors at play. Successful CEOs are often well spoken, have had plenty of press training, and usually have all the power in the conversation. Getting answers questioned is a privilege, not a right, unless you work in certain areas of law enforcement.

When bad things are on the horizon, CEOs have a little story ready to go, together with the surprise questions that may come up during the interview, or they don't come to interviews at all.

At a certain point, people collect enough money that press coverage is no longer much of a concern for them. Jobs, Musk, and other super rich don't need the validation and even manage to build a cult centered around their personality. As long as they say the right things to their key shareholders and don't start spouting unacceptable language that their core fan base disagrees with, it doesn't really matter if they come to interviews or not.

Private interviews are not a level playing field. Press conferences come closer, because more reporters means having to deal with more and less obvious questions.

It's not hard to be impressed by a young crypto billionaire if you have little to no knowledge about the platform and if their company keeps all the business details behind closed doors; for years, these people were actually running a moderately stable cryptocurrency business. Reporters couldn't know about how deep the company had sunk when the debts started to come in and a bunch of young people in bean bags managing billions of dollars for millions of people are doing something right; all they need to do is make the reporters comfortable and lie about or avoid the upcoming collapse and journalists are bound to write something positive about you.

Balgair• 4 years ago

Everytime I read about the antics here I'm just reminded of Mark Twain's Roughin It. His adventures as a 'journalist' in Virginia City, NV during the silver rush are just too similar to everything going on right now that it beggars belief. He's not an unknown or unpopular author, though the work is a bit dusty.

If you're interested in the relevant parts, read from about here:

https://www.gutenberg.org/files/3177/3177-h/3177-h.htm#linkc...

pschuegr• 4 years ago

Great reference, thanks for the specific link!

PaywallBuster• 4 years ago

Regarding FTX:

How come VC and the Canada Teachers Pension are doing a series B that raised 420M without any due diligence? Why didn't we hear about this before?

Animats• 4 years ago

The crypto crowd has been able to promote a culture in which there is no supporting data for financial hype, and that's considered OK. Crypto is different, you see. If crypto exchanges had to file an S-1 and quarterly reports with the SEC, people would be looking at the financials and saying "WTF?". With no audited numbers, there's not much for serious reporters to look at. But they have to write something. Hence the softball articles.

Now, there are the old-line balance sheet types who say publicly that crypto is bullshit across the board. Warren Buffett, Charlie Munger, that crowd. People who read Graham and Dodd, and Extraordinary Popular Delusions and the Madness of Crowds.

The crypto community argues that's outdated thinking. Go watch "Don't be like Larry" [1] again. That was an FTX commercial run at the Super Bowl. The reason the hype worked is the run-up of Bitcoin from sub-penny values to $60,000. World's best performing asset for a few years. It is hard to argue against success. Everything else rides on the coattails of Bitcoin.

FTX has nothing to do with cryptocurrencies, really. It's a bucket shop out of the 1920s, a fake broker that pretends to do trades but is just updating their own fake database and issuing fake stocks for fake companies. The same stunts could have been, and have been, pulled with gold mining stocks. FTX benefited from the "we don't need regulation because this is innovation" mindset. That's how they did it.

Big questions for journalists today:

- Where is Binance, the company, anyway, what assets do they really have, and who controls them?

- What assets are really behind USDT?

edanm• 4 years ago

You never linked to it, so here is the video (your [1]): https://www.youtube.com/watch?v=BH5-rSxilxo

And I have to say, I'd never watched it before, and it is hilarious and awesome. Especially since I'm a big Larry David fan. So thanks for that!

It's definitely funnier seeing it with the last few weeks' context.

pnt12• 4 years ago

There was an interesting discussion about this clip when the ad landed.

The persona that Larry David presents in his show is someone who is selfish and doesn't care about fads and what others think. More often than not, this let's him see past the bullshit, although his selfishness and stubbornness end up being his downfall.

In the ad, he is presented as a dumb dumb who is missing out on the cool crypto stuff - with a kind of uncanny valley persona who shares some traits but misses other. Well, in good irony, it turns out that FTX was good thing to miss, so I guess the original Larry's persona wins!

shapefrog7• 4 years ago

So the "real problem" here is that the WSJ wrote "FTX is was today valued at 32bn after raising money from Sequoia Capital, NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter ..."

Filthy scamming reporters

m000• 4 years ago

Aren't reporters scamming us most of the time? "Reporting" for anything that involves a monetary transaction has turned into an advertorial, or at best a superficial enumeration of promised features. Why are we adding "site:reddit.com" to our search queries?

JaDogg• 4 years ago

It is scams all the way down. At this point I'm convinced everything is a scam.

SilverBirch2• 4 years ago

This is just a stupid and absurd article. Yes, if you want to you can go around and cherry pick articles and opinion pieces that are flattering to crypto and point out they turned out to be wrong in retrospect, but that's what a free press is.

You are going to have people with different opinions saying different things, and sooner of later some of them will be wrong, and some will be right and we'll all be better off for having heard the arguments. But to try and pretend there hasn't been media critical of crypto is just deliberately ignoring the facts. How could we have seen this coming? Maybe listen to the Bloomberg podcast where SBF genuinely just outright states they're creating ponzi schemes back in April. But what did you want? Bloomberg to storm the offices of FTX and drag SBF off in cuffs?

The core of what happened at FTX was that SBF ran an unregulated exchange- that's a matter for the government and regulators. Not the press. Ocassionally talented investigative reporters uncover a fraud- and often it'll be the most impressive story of their lifetimes. But it's not a reasonable standard to blame them for every one that blows up before they catch it.

tim333• 4 years ago

It touches on a general phenomena in asset booms though, whether housing, crypto, stocks or whatever. The general pattern is:

Asset goes up in a normal manner

Agents, exchanges etc make money

They then buy ads in media and journalists write "Asset is hot now" articles

Public reads them piles in, everything shoots up

And then eventually once they've run out of new buyers it all crashes

It's worth bearing in mind as an investor. After the crash you'll get "It's all over for <asset>" articles followed by no articles when everyone is fed up which is probably the time to buy.

isitmadeofglass• 4 years ago

You are going to have people with different opinions saying different things, and sooner of later some of them will be wrong

That’s a rather dismissive attitude towards the craft of journalism. Imagine the same applies to medicine. Someone pays a doctor to let your mother die and you’d be saying “well sometimes patients die, we can’t go cherry-picking those cases and pretend it matters” The major problem around crypto reporting wasn’t that some reporters got it wrong. It’s that some reporters got major funding from crypto bros and then happened to write extremely naive and flattering articles about crypto bringing in gullible masses who now lost their money when the FTX Ponzi went bust.

It’s not an attack on the free press to point out that writing sugarcoated lies about financial investments because you stand to earn is a scam.

SilverBirch2• 4 years ago

The job of journalism isn't only to report provable facts, it's to also report on what people are doing and why. It's not the NYT's job to do a deep economic analysis of crypto and come up with an editorial position on it. They interview the people involved in order to give you insight into what's going on in the industry. Is it going to be balanced? No because they're literally trying to show you what the advocates for the industry are saying, and they trust you to be literate enough to understand that when they publish an interview with SBF they are presenting what SBF wants to represent to the world and you should take it with the knowledge of what source it comes from.

While crypto bro scammed clients, reporters scammed readers

Related Stories