How the Media Turned a Loser into a Hero (OPINION)

How the Media Turned a Loser into a Hero (OPINION)

The Mediaverse by Dennis Kneale, TruthDAO columnist

The overnight collapse of the FTX crypto trading platform wiped out $8 billion in investor funds and sparked $200 billion in crypto losses. Yet, up until a few weeks ago, FTX was adored by the media and admired by some of the most powerful investment firms in the world.

Blackrock, Softbank, Sequoia, Tiger Global, Paul Tudor Jones, Greylock Partners, and others pumped $1.8 billion into FTX in a year. They did so despite FTX’s having no chief financial officer, no board of directors, lax financial controls, and an accounting firm that bragged about having an office in the metaverse, where it supported a group of scantily clad women known as @DCLBabyDolls. The media made nothing of this.

How could this happen? We love the fever dream of get-there-first, get-rich-quick, and the media adored FTX founder Sam Bankman-Fried, 30, known for his mussy mop of brown hair and shabby gym shorts and t-shirt. He was to crypto what Marc Andreesen was to the internet in 1996, when he graced the cover of Time magazine in blue jeans and bare feet.

Best of all, SBF, whose wealth peaked at $25 billion, wanted to give it away as fast as he could earn it, part of an approach called EA for “effective altruism,” as if most altruism were otherwise. He signed up a platoon of celebrities to promote FTX, from cranky Larry David in a Super Bowl ad to the NBA’s 3-point superstar Stephen Curry, Angels pitcher Shohei Ohtani, quarterback Trevor Lawrence of the Jacksonville Jaguars, and the legendary QB Tom Brady and his ex, supermodel Giselle Bundchen.

Brady and Bundchen each held 0.15% stakes in FTX (once worth $10 million combined, now worthless). SBF named Giselle FTX’s “Head of Environmental and Social Initiatives” and promised to donate $1 billion in 2022 to help alleviate global poverty, “animal suffering,” and climate change, appearing with her in print ads about their “shared passion for philanthropy.”

It was a fantasy sequence right out of “Revenge of the Nerds.”

More cunningly, SBF was the second-largest donor to the Biden campaign ($5 million, vs. $56 million from #1, Michael Bloomberg). In the midterms, SBF was the second-largest donor to Democrats, after George Soros. He cited plans to spend up to $1 billion in 2024.

Bankman-Fried also funded liberal media outlets, including the Intercept, Vox, and ProPublica, and a reported $25 million to help bankroll a new media site called Semafor, co-founded by a former CEO of Bloomberg Media and the former editor of Buzzfeed, which gave the world the bogus Russia dossier on Donald Trump, leaded by a Hillary operative.

Thus, FTX bought a lot of buzzy, breathless coverage, including stories in the Intercept, Vox, and Semafor. Last August saw a gusher of positive coverage: on Aug. 4 Politico ran a glowing story on SBF. Lead: “One of the biggest donors in Democratic politics this year isn’t sure if he really wants to be a Democratic megadonor—at least not on the party’s terms. But then, part of life as Sam Bankman-Fried is about embracing paradoxes.”

Oh, yuck.

On Aug. 5, the Intercept ran a favorable story on SBF’s Democrat donations; on Aug. 7 the Washington Postfeatured SBF as having donated almost $40 million to the midterm elections. Headline: “Crypto finds a bright spot in a stormy summer: Congress.” On Aug. 8, Vox, another SBF beneficiary, ran a long piece on “How effective altruism went for from a niche movement to a billion-dollar force,” mentioning Sam Bankman-Fried 26 times (and disclosing an unspecified grant from SBF in the sixth graf).

Fortune went wild, running five stories on SBF in the first six days of August. It started on Aug. 1 with a cover story suggesting he is the next Warren Buffett, likening him to 19thcentury banker J.P. Morgan, and observing that “underneath the goofy façade is a trading wunderkind whose ambition knows no limits.” Swoon. Then came four Fortune follow-ups:

Aug. 2: a story on SBF bailing out other crypto firms. Aug. 3: SBF calls Solana the "most underrated token" (it fell 62% in the FTX meltdown), and, in a second story, says, regarding bitcoin at $35,000 by year-end, “I would f---ing take that.” (Bitcoin now is at half that price.)  Aug. 6: SBF says the end of the “crypto winter” doldrums is “just around the corner.”

When journalists turn out to be flat wrong, we choke on the crow. On Nov. 11, Fortune CEO Alan Murray told readers, “it’s a little intimidating to see someone like Sam Bankman-Fried” build a company and have it “collapse in a day. We at Fortune went along for that ride…”

On Nov. 14, Fortune published a takeout on SBF’s “rise and fall,” and it is almost mournful, saying he “was seen as a benevolent and stabilizing force in crypto,” and soft-pedaling “unanswered questions,” such as: “Was he idealistic and overconfident? Slick and fraudulent? Or was he just a risk-taker who got outplayed?”

SBF outplayed them all. Even now, a lot of reporters are unable to see it.

Dennis Kneale, @denniskneale on Twitter, is a media strategist and writer in New York. He spent more than 30 years at The Wall Street Journal, Forbes, CNBC, and Fox Business.