Has the mainstream media even bothered to write about some of the individual retail investors who were hoodwinked by these people, or are they just too busy running cover for the perpetrators?
I don't have a lot of sympathy for those who bought into crypto looking to get-rich-quick or to make unrealistic gains for no effort ...
But how many normal people bought and lost crypto with FTX because of their Super Bowl ads and celebrity endorsements? How many people thought FTX was just the new normal for investing and they should get in before getting left behind (anaglagous to to how once upon-a-time stocks made a transition for ordinary people from bucket shop gambling to mainstream investing)?
Sure would be nice to read an article about normal people who bought crypto with FTX as a result of the mainstream ads and endorsements.
That's not necessarily a catastrophe: "The FTX loss amounts to less than 0.05% of the pension plan’s total net assets and it remains in a financially strong position, according to a statement on the Ontario Teachers’ Pension Plan website." But, still, that's a lot of people who didn't think/know they were invested in FTX... but they were.
> mainstream media even bothered to write about some of the individual retail investors who were hoodwinked by these people
The Journal, Times, Financial Times and Bloomberg each ran stories in this vein. They were, without exception, incredibly boring. Gamblers losing money after years of being warned simply isn't a story.
> "Gamblers losing money" may give people the impression that this was something other than a custodian stealing their funds
Most people aren't bothered by this. It's interesting to those of us in tech and finance. But it's irrelevant to most Americans, who were protected by regulation from doing business with FTX. (Being defrauded and losing assets in hacks are well-established crypto loss modes.)
Americans were not protected by regulation from doing business with FTX.us, though, and behind the scenes it seems both the entities were the same for practical purposes.
Fair enough. I'd still wager that most Americans aren't exposed to FTX US, and those who are came in after years of warnings. I'm sure there are sympathetic victims. But there are more random victims of car robberies in San Francisco every day.
The publications you cite were studied not long before the dot bomb of 00/01 and found to comprise over 50 percent by word count copies and rework of Reuters, and Associated Press wires. I founded a agency early in the 90s which began with a specialism in corporate information systems public relations and I still haven't gotten over the first time we read our release for a client printed verbatim in a national daily.
I can't vouch for other generations, but the agency world I grew up in was occupied by a genuinely terrific cohort of individuals who had always wanted to be journalists and authors, but the mainstream media was locked up with heirs and scions and favourite nephews of families more frequently who first made a successful career in the 50s when social mobility was last a thing, and so the readability if not always examined quality of the typical press release was written to a very high standard, This poses the question of whether there was a improvement in the values of mainstream reporting on specialist subjects, because despite relying on the agencies to spoon feed them copy, news and general media were getting that copy from writers who were immediately adjacent to the sources and who were by virtue of being suppressed from pursuing "real" journalism careers, bent on proving their worth. I grew up reading media of the previous generation and felt that everyone lost something special by the middle of the 1980s. I also think that what I just related kept the standard of computing reporting from crashing. I am not certain my impression be it as it may be based on my professional dedication to and reliance on the insights I could discover at the time. But I am in any doubt that computing journalism crashed in the beginning of the new century and whatever happened to the blogging movement of computing journalism is something more complicated than I can surmise reliably right now. I remember too clearly visiting my local news stand for the latest copy of Byte (I felt able to take a private stand supporting the retail distribution in those years and was ahead of myself wanting to avoid my reading being analysed? When I found that I had bought my last copy of Byte the previous month. To even think of a substitute for the range of coverage as Byte you'd need to begin with Microprocessor Report and end up spending several thousand bucks for not even getting close. What you're doing as well, when you trade up or down the coverage breadth versus density spectrum of individual titles, is very important to think about in depth that I've never seen captured in surveys or circulation audits or even any attempt at so doing. The obvious question about how well you can balance breadth and depth and frequency of reporting rapidly differentiates into very non linear equations that only rarely don't lose their propensity for being possible for any outside observer to understand, because of filters of demographics, physical distance distribution costs that distributors like COMAG realized offer up margins when gamed (back pressure on publishers selling prices that can have a significant dollar cost in geography dependent advertising revenues) and the lumpiness of circulation versus "reach" which is basically how many people read any given copy, which gets skewed by density such as in Silicon Valley and is inextricably connected with big ticket display advertising deals. My business is reversing public information for traders to ascertain better bargain prices for their advertising buying., although I spend a lot more time recently working with music production which originally was a offshoot of making spots for clients who hadn't time for working up the necessary relationship with a purely creative shop.
Given the competing needs of the balances above are all well solved if you can pick and choose your publishing schedule in other words invest more time ceteris psribus and your results improve in journalism often exponentially, trauma triage of scandal reporting ...
Well I don't have a math degree (not even a basic college degree) and I'm not a quant / trader but I've dabbled with a little bit of machine learning (worked with some OCR DL models and some basic neural networks for image detection) and I was surprised to learn I didn't need much more than high school math to be able to use what others have created. So while I have no sympathy for her or SBF and think they should go to jail, this particular clip isn't that damning imo.
Good at math and bad at life: it's a story as old as time. I've spent most of my adult life in the Bay Area and Greater Boston respectively, and I couldn't begin to tell you how many well-educated total idiots I've met.
> sickening how these people are portrayed as "destined to do great things" all over the media
I'm critical of the non-financial press presenting FTX as anything but a fraud. But this piece is far from flattering. Ellison was exceptional. She was then ruined by crypto. This is run of the mill for human interest pieces.
Could you cite where? I'm not disagreeing with you. I'm simply not seeing it.
The article readily admits "Ellison told Alameda employees in a video call that she knew FTX sent customer funds to Alameda, and that her company used the money to cover its liabilities." She is called out as Alameda's "sole leader." And it ends with a "quip Ellison made" about crypto being "mostly scams and memes when you get down to it."
Sure, Ellison is portrayed sympathetically at the start. But the conclusion is damning. And nowhere do I see her cast as a victim. We don't need to embargo empathy the moment someone commits a crime.
You just repeated the framing yourself! “She was then ruined by crypto” — as if she’s some innocent victim. You’re just mystified at how it portrays her sympathetically, even as you buy the narrative hook, line, and sinker!
> “She was then ruined by crypto” — as if she’s some innocent victim
I suppose we're reading nuance differently. Madoff was an accomplished financier and chair of the NYSE. His reputation was ruined by the Ponzi scheme. Sure, it's a passive voice. But that's far from exonerating.
Similar to how someone can ask why a murderer wound up murdering, identifying elements from their childhood, et cetera, that explain and maybe even make them sympathetic, all without exonerating them. (In that case, I would argue there is valid victimhood in the perpetrator's story. That doesn't make them less guilty. And I haven't seen any claims of victimhood in Ellison's case, as we did in e.g. Holmes's.)
>Sure, it's a passive voice. But that's far from exonerating.
The accumulation of all those “not exonerating but friendly” pieces is what makes it a positive framing.
Something can be technically true but selected and framed to favor a false narrative. This is Journalism 101, or even high school English class, and you may have forgotten an important lesson from it.
Hold on -- I didn't blame the media for this fraud. Did you just accept my point that a wording can suggest a narrative even without explicitly endorsing it?
You're almost there! Now look back at the title: "Ellison was bound for success. Then she got into crypto" and realize it's wrapped in an exonerating tone.
The title endorses a narrative. Yes, some sentences walk it back a little, but the bell was clearly rung. Again, the whole issue of framing is that you can do a lot via emphasis: put the damning stuff in footnotes and puff in the headlines.
It endorses a timeline: she was promising, then she went into crypto and no longer is. That's accurate.
They could say she's a fraudster, but that's not really what this story is talking about. It's how she got to the point that she did fraud. (There are also questions of libel.)
>It endorses a timeline: she was promising, then she went into crypto and no longer is. That's accurate.
You seem to be almost deliberately missing the point that the facts can be correct but presented to favor a false narrative. I've said that three times now, and yet you keep re-asserting that the facts are technically correct, as if that's some vindication of your point.
If that's genuinely what you believe, I'm happy to tell your co-workers that you "managed to not come to work drunk today". It's accurate, right?
No, because it carries a false implication. I'm failing to see that here for anyone who hasn't come to their conclusion ex ante. There seems to be a generalized dislike for anyone covering anything related to FTX without screaming that it was a fraud. We know it was a fraud. The people who don't think it's a fraud will never be convinced otherwise.
SBF between his own prior arbitrage wealth and his family's wealth was set for life as for as necessities. He could move to a single family home in Iowa, find a nice wife, raise kids, send them all to college and generally enjoy barbeques and reading books for the rest of his days if he liked. Without working further, or working for free for charities to create their crypto plugin to donate to feed the homeless or whatever
genuinely altruistic goal.
He had the best setting imaginable but still managed to do bad things. Crypto "made" him do do bad things in the same way a deer gun makes one guy point it at a store clerk while others are just using it to feed his family some venison or wild hog.
Everyone in crypto endlessly criticized governments (inevitable collapse of fiat, dumb regulators), traditional finance (slow greedy), the media (don't get it).
Now, as FTX unravels people say the media was complicit. Politicians were bought off. It's more proof the establishment was corrupt! All roads seem to lead to this dark world view.
The only way a representative democracy can work, and moreover a justice system, is the assumption that the people in charge have extraordinary moral and ethical character.
Since time imemmorial this hasn't been true. It's worse now than it's ever been. You can't even vote the corruption out at this point. So, we will never have that mythical democracy nor justice system.
They feed on each other. The corrupt crypto people corrupt the establishment, which looks the other way, and the feedback loop continues. One does not negate the other and especially in the case of finance it's entirely possible to have exactly 0 good guys. The media has no interest in the telling the truth. There's no financial incentive. Hence every "fact checker" is a consummate liar, and every "journalist" is just an opinion pundit with (perhaps) a bachelor degree. We are literally living in the Truman Show. All it takes is a little money to change the public's perception of a person.
Also makes one wonder how true Ye was when he pointed out the fact that a certain religious minority is so prominent in media and finance. If this crime was commited by somebody of other religious affilication would the response have been any different from the pathetic gaslighting happening now? Really makes you wonder..
I don't think they even bought bitcoin and SBF admitted as much. They just took the money and send the user a fraudulent notice that an investment was purchased when in fact no investment took place. This made the 'bank run' easy to trigger as they would have to purchases a bitcoin or other crypto every time a 'withdraw' happened to cover the lack of assets to withdraw for the account.
Because a inanimate technology like crypto turned a perfectly smart and honest mathematician into the next Bernie Madoff.
Lets have some accountability here, Megan Ellison was morally bankrupt and preyed on clueless users of FTX by making extremely risky financial moves(read illegal).
On the flip side anyone who got into crypto thinking they would make out like a bandit also know it was a bagholder game where the last one holding would lose, I mean it was backed by nothing and new coins are minted every week.
Its gambling for the 21st century and both parties knew this coming into the casino, err, exchange.
I (like many others) have been telling investors and recruiters for years that almost everything "crypto"/blockchain is a scam, and that the dishonest dealings is from pretty much every direction.
Now that a particular suspicious-looking thing is in the news as collapsing, and we're talking about specific people... I'll suppress my kneejerk reaction, and wait to see whether officials investigate, and what happens from there.
At the same time, not talking about specific people, I'd be thrilled if US officials finally shut down the entire space.
"Alameda, FTX Executives Are Said to Have Known FTX Was Using Customer Funds."
So, she knew.
In a prosecutor's office, this is called "receiving stolen property". At least in California, where Alameda was nominally headquartered, receiving embezzled stolen property is a felony.[2] Some states don't define receiving stolen property to include embezzled property, but California apparently does. However, "intent to return" is a defense in California, but not in all states. This was nominally a "loan". Whether a jury will buy that argument remains to be seen.
Something for a court to sort out. Only 3 years in jail, max, though.
Felony isn't about the jail sentence, normally. It's about stripping you of your civil rights. That's usually the real punishment.
She'll have incredible difficulty getting a residence visa for almost anywhere desirable to continue working offshore including the Bahamas, working a licensed position, carrying a gun for self defense. She'll have a bad time at traffic stops, be extra hassled by border patrol when she crosses a border, probably not be able to be involved in any future children's field trips and on-school activities, etc. Lifelong retribution, no matter if 70 years from now she is nothing but a sweet innocent great-grandma. Justice.
> “As a trader, the most fun thing is to make money,” she said on a podcast.
There it is, right there. What was fun for her? Making money. All of the rules, regulations, societal norms, etc. are all just obstacles to overcome by ignoring them with or without some made-up rationalization.
52 comments
[ 2.6 ms ] story [ 123 ms ] threadBut how many normal people bought and lost crypto with FTX because of their Super Bowl ads and celebrity endorsements? How many people thought FTX was just the new normal for investing and they should get in before getting left behind (anaglagous to to how once upon-a-time stocks made a transition for ordinary people from bucket shop gambling to mainstream investing)?
Sure would be nice to read an article about normal people who bought crypto with FTX as a result of the mainstream ads and endorsements.
That's not necessarily a catastrophe: "The FTX loss amounts to less than 0.05% of the pension plan’s total net assets and it remains in a financially strong position, according to a statement on the Ontario Teachers’ Pension Plan website." But, still, that's a lot of people who didn't think/know they were invested in FTX... but they were.
The Journal, Times, Financial Times and Bloomberg each ran stories in this vein. They were, without exception, incredibly boring. Gamblers losing money after years of being warned simply isn't a story.
Most people aren't bothered by this. It's interesting to those of us in tech and finance. But it's irrelevant to most Americans, who were protected by regulation from doing business with FTX. (Being defrauded and losing assets in hacks are well-established crypto loss modes.)
I can't vouch for other generations, but the agency world I grew up in was occupied by a genuinely terrific cohort of individuals who had always wanted to be journalists and authors, but the mainstream media was locked up with heirs and scions and favourite nephews of families more frequently who first made a successful career in the 50s when social mobility was last a thing, and so the readability if not always examined quality of the typical press release was written to a very high standard, This poses the question of whether there was a improvement in the values of mainstream reporting on specialist subjects, because despite relying on the agencies to spoon feed them copy, news and general media were getting that copy from writers who were immediately adjacent to the sources and who were by virtue of being suppressed from pursuing "real" journalism careers, bent on proving their worth. I grew up reading media of the previous generation and felt that everyone lost something special by the middle of the 1980s. I also think that what I just related kept the standard of computing reporting from crashing. I am not certain my impression be it as it may be based on my professional dedication to and reliance on the insights I could discover at the time. But I am in any doubt that computing journalism crashed in the beginning of the new century and whatever happened to the blogging movement of computing journalism is something more complicated than I can surmise reliably right now. I remember too clearly visiting my local news stand for the latest copy of Byte (I felt able to take a private stand supporting the retail distribution in those years and was ahead of myself wanting to avoid my reading being analysed? When I found that I had bought my last copy of Byte the previous month. To even think of a substitute for the range of coverage as Byte you'd need to begin with Microprocessor Report and end up spending several thousand bucks for not even getting close. What you're doing as well, when you trade up or down the coverage breadth versus density spectrum of individual titles, is very important to think about in depth that I've never seen captured in surveys or circulation audits or even any attempt at so doing. The obvious question about how well you can balance breadth and depth and frequency of reporting rapidly differentiates into very non linear equations that only rarely don't lose their propensity for being possible for any outside observer to understand, because of filters of demographics, physical distance distribution costs that distributors like COMAG realized offer up margins when gamed (back pressure on publishers selling prices that can have a significant dollar cost in geography dependent advertising revenues) and the lumpiness of circulation versus "reach" which is basically how many people read any given copy, which gets skewed by density such as in Silicon Valley and is inextricably connected with big ticket display advertising deals. My business is reversing public information for traders to ascertain better bargain prices for their advertising buying., although I spend a lot more time recently working with music production which originally was a offshoot of making spots for clients who hadn't time for working up the necessary relationship with a purely creative shop.
Given the competing needs of the balances above are all well solved if you can pick and choose your publishing schedule in other words invest more time ceteris psribus and your results improve in journalism often exponentially, trauma triage of scandal reporting ...
Exhibit 3,342,981
Everyone who is writing fluff about such people should be documented and further publications from these sources should be taken with a grain of salt.
I'm critical of the non-financial press presenting FTX as anything but a fraud. But this piece is far from flattering. Ellison was exceptional. She was then ruined by crypto. This is run of the mill for human interest pieces.
Could you cite where? I'm not disagreeing with you. I'm simply not seeing it.
The article readily admits "Ellison told Alameda employees in a video call that she knew FTX sent customer funds to Alameda, and that her company used the money to cover its liabilities." She is called out as Alameda's "sole leader." And it ends with a "quip Ellison made" about crypto being "mostly scams and memes when you get down to it."
Sure, Ellison is portrayed sympathetically at the start. But the conclusion is damning. And nowhere do I see her cast as a victim. We don't need to embargo empathy the moment someone commits a crime.
I suppose we're reading nuance differently. Madoff was an accomplished financier and chair of the NYSE. His reputation was ruined by the Ponzi scheme. Sure, it's a passive voice. But that's far from exonerating.
Similar to how someone can ask why a murderer wound up murdering, identifying elements from their childhood, et cetera, that explain and maybe even make them sympathetic, all without exonerating them. (In that case, I would argue there is valid victimhood in the perpetrator's story. That doesn't make them less guilty. And I haven't seen any claims of victimhood in Ellison's case, as we did in e.g. Holmes's.)
The accumulation of all those “not exonerating but friendly” pieces is what makes it a positive framing.
Something can be technically true but selected and framed to favor a false narrative. This is Journalism 101, or even high school English class, and you may have forgotten an important lesson from it.
This is not a friendly piece. There is nothing exonerating in it. And after some flattery it concedes her guilt.
The meta-story appears to be people trying to blame the media for another fraud in crypto.
You're almost there! Now look back at the title: "Ellison was bound for success. Then she got into crypto" and realize it's wrapped in an exonerating tone.
The title endorses a narrative. Yes, some sentences walk it back a little, but the bell was clearly rung. Again, the whole issue of framing is that you can do a lot via emphasis: put the damning stuff in footnotes and puff in the headlines.
It endorses a timeline: she was promising, then she went into crypto and no longer is. That's accurate.
They could say she's a fraudster, but that's not really what this story is talking about. It's how she got to the point that she did fraud. (There are also questions of libel.)
>It endorses a timeline: she was promising, then she went into crypto and no longer is. That's accurate.
You seem to be almost deliberately missing the point that the facts can be correct but presented to favor a false narrative. I've said that three times now, and yet you keep re-asserting that the facts are technically correct, as if that's some vindication of your point.
If that's genuinely what you believe, I'm happy to tell your co-workers that you "managed to not come to work drunk today". It's accurate, right?
No, because it carries a false implication. I'm failing to see that here for anyone who hasn't come to their conclusion ex ante. There seems to be a generalized dislike for anyone covering anything related to FTX without screaming that it was a fraud. We know it was a fraud. The people who don't think it's a fraud will never be convinced otherwise.
IOW, exactly the criticism everyone is making about the article's framing of Ellison's history. We're back to square one.
Bad settings make good people do bad things.
Crypto made her and sbf make many small dumb decisions which added up to a huge dumb decision.
He had the best setting imaginable but still managed to do bad things. Crypto "made" him do do bad things in the same way a deer gun makes one guy point it at a store clerk while others are just using it to feed his family some venison or wild hog.
Really makes you wonder about those "fact checkers" we were supposed to "trust" 2 years ago...huh...
Now, as FTX unravels people say the media was complicit. Politicians were bought off. It's more proof the establishment was corrupt! All roads seem to lead to this dark world view.
Since time imemmorial this hasn't been true. It's worse now than it's ever been. You can't even vote the corruption out at this point. So, we will never have that mythical democracy nor justice system.
They feed on each other. The corrupt crypto people corrupt the establishment, which looks the other way, and the feedback loop continues. One does not negate the other and especially in the case of finance it's entirely possible to have exactly 0 good guys. The media has no interest in the telling the truth. There's no financial incentive. Hence every "fact checker" is a consummate liar, and every "journalist" is just an opinion pundit with (perhaps) a bachelor degree. We are literally living in the Truman Show. All it takes is a little money to change the public's perception of a person.
Also they had most of their investments in a token that became worthless when someone initiated a run on the exchange.
Maybe lots of smarts and not a lot of common sense/wisdom/caution.
https://twitter.com/DoombergT/status/1598457179211812865
Lets have some accountability here, Megan Ellison was morally bankrupt and preyed on clueless users of FTX by making extremely risky financial moves(read illegal).
On the flip side anyone who got into crypto thinking they would make out like a bandit also know it was a bagholder game where the last one holding would lose, I mean it was backed by nothing and new coins are minted every week.
Its gambling for the 21st century and both parties knew this coming into the casino, err, exchange.
Now that a particular suspicious-looking thing is in the news as collapsing, and we're talking about specific people... I'll suppress my kneejerk reaction, and wait to see whether officials investigate, and what happens from there.
At the same time, not talking about specific people, I'd be thrilled if US officials finally shut down the entire space.
"Alameda, FTX Executives Are Said to Have Known FTX Was Using Customer Funds."
So, she knew.
In a prosecutor's office, this is called "receiving stolen property". At least in California, where Alameda was nominally headquartered, receiving embezzled stolen property is a felony.[2] Some states don't define receiving stolen property to include embezzled property, but California apparently does. However, "intent to return" is a defense in California, but not in all states. This was nominally a "loan". Whether a jury will buy that argument remains to be seen.
Something for a court to sort out. Only 3 years in jail, max, though.
[1] https://www.wsj.com/articles/alameda-ftx-executives-are-said...
[2] https://www.kannlawoffice.com/california-penal-code-496-rece...
She'll have incredible difficulty getting a residence visa for almost anywhere desirable to continue working offshore including the Bahamas, working a licensed position, carrying a gun for self defense. She'll have a bad time at traffic stops, be extra hassled by border patrol when she crosses a border, probably not be able to be involved in any future children's field trips and on-school activities, etc. Lifelong retribution, no matter if 70 years from now she is nothing but a sweet innocent great-grandma. Justice.
There it is, right there. What was fun for her? Making money. All of the rules, regulations, societal norms, etc. are all just obstacles to overcome by ignoring them with or without some made-up rationalization.
Don't let your kids do crypto.