Bankman-Fried: A con artist's day of reckoning
How the crypto king's downfall might actually begin to restore trust in the crypto market
The smartest insight and analysis, from all perspectives, rounded up from around the web:
Sam Bankman-Fried tried to warn everyone, said David Streitfeld in The New York Times. As he "partied with stars and big shots," the onetime crypto king "always looked awkward, embarrassed and as if he would rather be playing a video game." He frequently conveyed "contempt for what he was doing," appealed for regulation and "seemed to implore the authorities to take a closer look at his companies," FTX and Alameda Research. Still, everyone kept insisting Bankman-Fried, or "SBF," was "off-the-charts brilliant, the entrepreneur who would create the future." Investors, customers and journalists "saw the genius they were told was there." In reality, as we know by now, FTX was "run by a group of hapless young people." Those who actually "sensed something was wrong soon peeled off," leaving a core crew led by Bankman-Fried, who will spend a long time in prison after being convicted last week of seven counts of fraud and conspiracy.
Bankman-Fried represents "the deceit fundamental to the crypto market itself," said Michael Hiltzik in the Los Angeles Times. He expertly "exploited the vacuity of crypto by slathering it over with what sounded like profundities." His marks had nothing to weigh them against, because "there is nothing real about crypto." What’s real is that FTX’s investors have lost as much as $10 billion and SBF is facing a prison term as long as 110 years. This won’t be the last crypto fraud, said Lionel Laurent in Bloomberg. In fact, the market already "is stirring again," and the price of Bitcoin, despite all the negative attention, is back above $35,000.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Bankman-Fried is exactly why crypto needs regulation, said Megan McArdle in The Washington Post. It’s an "ecosystem of people who think they’re far smarter than boring bankers or bank regulators." Bankman-Fried was "better at calculating odds" than most people, "but he still miscalculated a lot — including, on the odds that he might go to jail." Instead of pleading out, he "gambled on a trial" — then doubled down by "opening himself up to cross-examination." As soon "as the prosecutor confronted Bankman-Fried with evidence of his alleged guilt, it seemed obvious that he belongs in jail." Oddly, Bankman-Fried’s downfall might actually restore trust in crypto, said Anita Ramaswamy in Reuters. The swift conviction should be a wake-up call. It may even "cause a collective sigh of relief" from firms using digital currency technology "to solve real problems like streamlining cross-border payments and remittances."
This story isn’t really about crypto or arcane financial instruments, said Josie Cox in The Guardian. It’s about our urge to believe in the next big thing. Too many of us keep "stumbling into the trap of mythologizing shiny new technology and the people who push it," be that SBF or Theranos’ Elizabeth Holmes or WeWork’s Adam Neumann or Nikola’s Trevor Milton. This trial was a good counterweight: In the end, it was about "good old fashioned fraud and conspiracy." We’re looking "for an innovation that would actually change our ailing world," so we ignore all the clues that "things might actually be too good to be true."
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Create an account with the same email registered to your subscription to unlock access.
-
6 unmissable museum exhibitions to see this fall
The Week Recommends Elizabeth Catlett, Tamara de Lempicka and Marina Abramovic are in the spotlight
By Catherine Garcia, The Week US Published
-
College admissions data reveals early effects of affirmative action's end
In the spotlight A sneak peek at how the Supreme Court's decision has panned out
By Theara Coleman, The Week US Published
-
'Farmland has declined under both parties'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Can Starbucks' new CEO revive the company?
Today's Big Question Brian Niccol has been the CEO of Chipotle since 2018 but is now moving to the coffee chain
By Justin Klawans, The Week US Published
-
Is the Fed ready to start cutting interest rates?
Today's Big Question Recession fears and a presidential election affect the calculation
By Joel Mathis, The Week US Published
-
Copper coins: are they doomed?
Talking Point Treasury says no new 1ps and 2ps needed due to declining use – but would we really miss them?
By The Week UK Published
-
Donald Trump's bitcoin obsession
The Explainer Former president's crypto conversion a 'classic Trumpian transactional relationship', partly driven by ego-boosting NFTs
By The Week UK Published
-
The precipitous fall of the Japanese yen
Under the Radar The Yen recently below 160 to the dollar, its lowest value in more than 30 years
By Justin Klawans, The Week US Published
-
It's not your imagination — restaurant reservations are becoming harder to get
In the Spotlight Bots, scalpers and even credit card companies are making reservations a rare commodity
By Justin Klawans, The Week US Published
-
Is bitcoin back?
Talking Point World's most popular cryptocurrency looks set to hit record highs in 2024 but is 'not for the faint-hearted', experts say
By The Week UK Published
-
The rise of the world's first trillionaire
in depth When will it happen, and who will it be?
By Justin Klawans, The Week US Published