Collapsing token FTT spreads gloom throughout the crypto market.
One of the most interesting things to watch in the Sam Bankman-Fried (aka SBF) fallout is those who previously praised him now trying to figure out why they ever said things that sound utterly insane today.
In all fairness, while Sam’s wrongdoings were deliberate and dishonest, blaming everyone who once worked with or liked the guy is going too far, in my opinion. If the accusations we’ve heard are true, you can be sure very few people knew the truth.
Sam had accumulated a sizeable list of endorsements, and it wasn’t made up of easily scammed or gullible people…
Even the person who began FTX’s downfall first believed they were legit. Binance CEO ‘CZ’ started the avalanche that would burry Sam and FTX by sending out of tweet when he lost confidence in the company – but before that, he trusted Sam and FTX enough to have $2 billion of his assets tied up in their FTX’s official token, FTT.
Earning trust within an industry can be a chain reaction, were getting ‘in’ with one person who is more established than yourself can lead to a dozen more if you play your cards right. So who was the first ‘big name’ in crypto to publicly link themselves with Sam? I have no idea; they aren’t to blame for this anyway.
While researching another story, I came across this, the only organization that I’ve seen address the situation by adding disclaimers to their old write-ups about Sam.
The organization is called 80,000 Hours, and they say their goal is to ‘provide research and support to help students and graduates switch into careers that effectively tackle the world’s most pressing problems’ 80,000 hours refers to the average time someone will spend working in their chosen profession in their entire lifetime.
What was a page on their site containing ten paragraphs of pure praise for SBF now begins with a statement:
Our statement regarding the collapse of FTX
The collapse of FTX is likely to cause tremendous harm to customers, employees, and many others who have relied on FTX. We are deeply concerned about those affected and, along with our community, grapple with how to respond.
Though we do not know for sure whether anything illegal happened, we unequivocally condemn any immoral or criminal actions that may have taken place.
Before this, we had celebrated Sam Bankman-Fried’s apparent success, had held him up as a positive example of someone pursuing a high-impact career, and had written about how we encouraged him to use a strategy of earning to give (for example, on this page). We feel shaken by recent events and are unsure exactly what to say or think.
In the meantime, we will remove instances on our site where Sam was highlighted as a positive example of someone pursuing a high-impact career since we no longer endorse that. We are leaving up discussions of Sam in places that seem essential for transparency, for example, this blog post on the growth of effective altruism in 2021 and this user story.
In the coming weeks and months, we will be thinking hard about what we should do in the future and how we should have acted differently.
We also support and value you if you try your best to use your career to help solve the world’s most pressing problems with honesty and integrity.
We are following the situation closely and hope to write more soon.
Many associated with Sam almost instantly came out to say they “had no way of knowing” – and while they are probably telling the truth, there’s still something refreshing about someone taking a bit of time to reflect and review.
The non-profit organizations SBF worked with will easily be able to distance themselves – no one expects them to turn down donations from a company that (at the time) had a clean reputation.
Those with a potential nightmare ahead of them are the politicians who took campaign donations and the already-wealthy athletes and actors who used their influence to encourage their fans and the general public to invest via FTX.
Celebs who publicly endorsed FTX include NFL star quarterback Tom Brady, NBA MVPs Shaq and Stephen Curry, ‘Shark Tank star Kevin O’Leary, and actor and Seinfeld producer Larry David – all of whom have a net worth of over $100 million (Larry David tops the list with an estimated $500 million).
Now they’re all sharing the blame with SBF in a just-filed lawsuit that argues Sam, and the celebs who promoted him, are responsible for paying back the billions in lost FTX user funds…
The athletes and actors will predictably claim ignorance but then have to explain why they would endorse something they didn’t understand – it’s not like they needed the money.
Kevin O’Leary and a few crypto ‘influencers’ will have an even more significant challenge of explaining how they are self-proclaimed ‘expert investors’ but could not spot any red flags.
The lawsuit includes every celeb who endorsed FTX and Sam himself as former users seek to recoup lost funds. The case if filed in the Florida court system with no date yet for initial hearings.
No one is miscalculating the situation worse than Sam himself…
Sam chimed in briefly a couple of times over the past week with statements like, “I didn’t want to do sketchy stuff, there are huge negative effects from it, and I didn’t mean to.”
Then, while he no longer holds any position at FTX and is under investigation for multiple serious criminal offenses, he shared his goal of raising another $8 billion to “make customers whole” – apparently forgetting this ended with him unable to raise anything, and that’s when he had an exchange to sell.
The new FTX CEO, appointed to oversee the company bankruptcy, and previously known for cleaning up the massive Enron bankruptcy, John Ray, was forced to counter Sam’s actions with an announcement reminding people Sam is “not employed” with FTX any longer and therefore, “does not speak for” the company in any capacity, and stated that Sam seems ‘delusional.’
With the ‘clean-up team in place and authorized to access everything FTX controls – the deep dive that will expose anything still unknown is now underway.
Against Lawyer’s Advice, Sam Bankman-Fried is Talking Again – It Isn’t Going Well.
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