{"id":1770961,"date":"2022-12-10T06:10:07","date_gmt":"2022-12-10T11:10:07","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1770961"},"modified":"2022-12-10T06:18:21","modified_gmt":"2022-12-10T11:18:21","slug":"citizen-journalism-faster-on-the-draw-than-mainstream-media-in-uncovering-ftx-scandal","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/citizen-journalism-faster-on-the-draw-than-mainstream-media-in-uncovering-ftx-scandal\/","title":{"rendered":"Citizen Journalism Faster on the Draw Than Mainstream Media in Uncovering FTX Scandal"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcitizen-journalism-faster-on-the-draw-than-mainstream-media-in-uncovering-ftx-scandal%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1770961&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><em>News Analysis<\/em><\/p>\n<p>On Sept. 3, 2022, veteran short-seller Marc Cohodes <a href=\"https:\/\/app.hedgeye.com\/insights\/122943-marc-cohodes-keith-mccullough-hedgeye-investing-summit%20\" target=\"_blank\" rel=\"noopener\">leveled<\/a> several bold accusations at crypto exchange <a href=\"https:\/\/www.theepochtimes.com\/t-ftx\">FTX<\/a> and its founder Sam Bankman-Fried. Among the many predictions made by the short-seller was the fact that FTX did not have as much money as it claimed.<\/p>\n<p>\u201cEverything reads like this thing is a complete scam,\u201d Cohodes said in his interview with independent investment research company Hedgeye two months before FTX went bankrupt on\u00a0 Nov. 11. \u201cIt is dirty and rotten to the core.\u201d<\/p>\n<p>Cohodes made his living by exposing fraudulent corporations, including the biotech company MiMedx, which was <a href=\"https:\/\/www.theepochtimes.com\/fraud-romance-and-regulatory-neglect-the-ftx-scandal-deepens_4862942.html\">convicted<\/a> of securities fraud. The short-seller noticed too many red flags with FTX, noting in his interview that Daniel Friedberg, the company\u2019s chief regulatory officer, was <a href=\"https:\/\/nypost.com\/2022\/11\/20\/ftxs-ex-chief-regulatory-officer-tied-to-online-poker-scandal\/\">involved<\/a> in a $50 million online poker scandal years prior.<\/p>\n<p>Cohodes was early to sound the alarm about the crypto exchange.<\/p>\n<p>\u201cI suspected FTX was a fraud for a year and began to speak about it in May of 2022,\u201d Cohodes told The Epoch Times.<\/p>\n<p>Since then, a number of independent journalists and concerned crypto investors have played pivotal roles in exposing what is potentially one of the largest financial scandals in history.<\/p>\n<p>A leaked balance sheet published by CoinDesk in early November sparked concern over Bankman-Fried\u2019s trading firm,\u00a0<a href=\"https:\/\/www.theepochtimes.com\/the-fall-of-sam-bankman-fried-and-his-crypto-empire-a-timeline_4906642.html\">Alameda Research<\/a>. An independent crypto journalist named James Block analyzed the leaked documents to <a href=\"https:\/\/dirtybubblemedia.substack.com\/p\/is-alameda-research-insolvent\">show<\/a> mathematically that Alameda was insolvent.<\/p>\n<p>Block, who writes under the pseudonym Dirty Bubble Media on <a href=\"https:\/\/dirtybubblemedia.substack.com\">Substack<\/a>, utilized blockchain monitoring tools to track the flows of FTT\u2014the token created by FTX\u2014and assess its liquidity. He stated that 180 percent of circulating FTT was held at Alameda and daily trading volumes of the token were 75 percent lower than comparable cryptocurrencies.<\/p>\n<p>In short, FTT was a highly illiquid asset, and yet it represented <a href=\"https:\/\/dirtybubblemedia.substack.com\/p\/is-alameda-research-insolvent\">88 percent<\/a>\u00a0of Alameda\u2019s net equity.<\/p>\n<figure id=\"attachment_4859600\" class=\"wp-caption alignnone\"><a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2022\/11\/12\/GettyImages-1241501470-1200x799.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"lazy size-full wp-image-4859600\" src=\"https:\/\/www.theepochtimes.com\/assets\/themes\/eet\/images\/white.png\" data-src=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2022\/11\/12\/GettyImages-1241501470.jpg\" alt=\"Epoch Times Photo\" width=\"4500\" height=\"2995\"     style=\"display:none\"><figcaption class=\"wp-caption-text\"><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-4859600\" src=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2022\/11\/12\/GettyImages-1241501470.jpg\" alt=\"Epoch Times Photo\" width=\"4500\" height=\"2995\" \/><\/noscript><\/figcaption><\/a> Sam Bankman-Fried speaks on stage at Casa Cipriani in New York City, on June 23, 2022. (Craig Barritt\/Getty Images for CARE For Special Children )<\/figure>\n<p>\u201cAlameda will never be able to cash in a significant portion of FTT to pay back its debts,\u201d Block wrote on Substack while the price of the currency still rested at $25. \u201cThe fair market value of their FTT in the event of large sales would rapidly approach $0.\u201d<\/p>\n<p>Block\u2019s thesis would pan out sooner than he expected as his article caught the attention of Binance founder Chanpeng Zhao. One day after <a href=\"https:\/\/mobile.twitter.com\/cz_binance\/likes\">liking<\/a> Block\u2019s article on Twitter, Zhao\u00a0<a href=\"https:\/\/mobile.twitter.com\/cz_binance\/status\/1589283421704290306?lang=en\">announced<\/a> that Binance would be liquidating its $529 million FTT balance\u2014a catalyst for the crash.<\/p>\n<p>\u201cI think I did play a role,\u201d Block told The Epoch Times when asked whether his reporting was related to Zhao\u2019s decision, but stressed that he ultimately does not know what motivated the Binance founder.<\/p>\n<h2>\u2018A Pattern of Deception\u2019<\/h2>\n<p>This is not the first time that Block has been early in pinpointing fraudulent enterprises. As early as October 2021, Block raised <a href=\"https:\/\/twitter.com\/mikeburgersburg\/status\/1450541640536530952?s=46&#038;t=Kim6JrwIut2z_dzX4OfZdA\">concerns<\/a> about the now-defunct crypto lender Celsius, which <a href=\"https:\/\/www.cnbc.com\/2022\/07\/17\/how-the-fall-of-celsius-dragged-down-crypto-investors.html\">filed<\/a> for bankruptcy in July and robbed customers of $4.7 billion.<\/p>\n<p>\u201cCelsius had the classic look of \u2018Hey look! We\u2019re paying out double-digit interest rates\u2019 and saying that there\u2019s no risk,\u201d Block relayed over the phone. He wrote numerous articles throughout early 2022 <a href=\"https:\/\/dirtybubblemedia.substack.com\/p\/a-pattern-of-deception-part-2-the\">documenting<\/a> a \u201cpattern of deception\u201d by Celsius founder Alex Mashinsky.<\/p>\n<p>Block said journalism and uncovering financial crimes is just a hobby: \u201cI find fraud interesting.\u201d<\/p>\n<p>After the severity of the FTX collapse set in\u2014$8 billion in <a href=\"https:\/\/www.theepochtimes.com\/bankman-fried-criticizes-new-ftx-ceo-questions-why-us-customer-funds-still-not-returned_4900838.html\">missing<\/a> customer deposits\u2014Bankman-Fried went dark. The Bahamas-based founder initially ceased speaking to the press, and his social media activity became more sparse.<\/p>\n<p>It was around this time that Bankman-Fried granted an <a href=\"https:\/\/www.youtube.com\/watch?v=6DezodR9hNI&#038;t=787s\">interview<\/a> with fledgeling crypto journalist Tiffany Fong. Prior to reporting, Fong backpacked around the world while earning passive income from her e-commerce businesses, she told the Epoch Times.<\/p>\n<p>\u201cI\u2019m not a journalist by profession,\u201d Fong said.<\/p>\n<p>Unfortunately, she had not been privy to Block\u2019s early reporting on Celsius because, according to her, she lost a \u201csubstantial portion\u201d of her savings once the company <a href=\"https:\/\/www.cnbc.com\/2022\/06\/20\/celsius-asks-users-for-more-time-to-fix-issues-after-withdrawal-freeze.html\">froze<\/a> withdrawals. Motivated by her loss, Fong began reporting on issues in the crypto industry.<\/p>\n<p>By securing an interview with the elusive FTX founder, Fong was able to break several stories at once. She revealed that Bankman-Fried, at least according to him, had donated equal amounts to both political parties\u2014keeping Republican donations confidential to avoid bad press\u2014and that the decision to allow withdrawals exclusively in the Bahamas was a strategic move to avoid disgruntled neighbors.<\/p>\n<p>Fong\u2019s interview kicked off Bankman-Fried\u2019s public relations campaign, which included his <a href=\"https:\/\/www.nytimes.com\/2022\/12\/01\/business\/dealbook\/sam-bankman-fried-dealbook-interview-transcript.html\">appearance<\/a> at the New York Times\u2019s DealBook Summit, his <a href=\"https:\/\/www.goodmorningamerica.com\/news\/video\/ftx-founder-sam-bankman-fried-denies-improper-customer-94268098\">sit-down<\/a> with Good Morning America, and his numerous <a href=\"https:\/\/www.youtube.com\/watch?v=cKrT9Jae4No\">discussions<\/a> on Twitter Spaces. \u201cOn our last call, he did mention that he would be ramping up communication soon, but I did not expect it to this degree,\u201d Fong relayed in an email to The Epoch Times.<\/p>\n<p>Having worked with large outlets like The New York Times and CNBC during her Celsius coverage, Fong sees the maneuverability that citizen journalists have as an advantage over large publishers. \u201cIn crypto particularly, collapses can occur quickly, in a matter of days or even hours, so I feel being able to share information in real time is crucial.\u201d<\/p>\n<p>Tesla founder and CEO Elon Musk took to his newly owned platform Twitter to <a href=\"https:\/\/twitter.com\/elonmusk\/status\/1593160857588232192\">express<\/a> a similar opinion. \u201cCoverage of FTX meltdown is incomparably faster and better quality on Twitter than old-school media,\u201d the industrialist wrote in a tweet.<\/p>\n<p>Recently, Twitter has become a crucial channel for FTX information and data updates. Research and commentary circling on the social media platform has kept users up to date, even ahead of traditional news.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Coverage of FTX meltdown is incomparably faster *and* better quality on Twitter than old-school media<\/p>\n<p>\u2014 Elon Musk (@elonmusk) <a href=\"https:\/\/twitter.com\/elonmusk\/status\/1593160857588232192?ref_src=twsrc%5Etfw\">November 17, 2022<\/a><\/p>\n<\/blockquote>\n<h2>Regulators<\/h2>\n<p>Displaying an analogous sentiment, Cohodes disparaged financial regulators in his correspondence with The Epoch Times. When asked whether short-sellers are better at policing fraud than the Securities and Exchange Commission (SEC), he said, \u201cLegitimate short-sellers are the ones that expose fraud. The SEC comes in after the fact.\u201d<\/p>\n<p>His comments come after numerous <a href=\"https:\/\/www.theepochtimes.com\/bankman-fried-pushed-for-crypto-regulation-in-weeks-leading-up-to-ftx-bankruptcy_4881892.html\">calls<\/a> by U.S. agencies to adopt new cryptocurrency-related laws with industry leaders like Binance\u2019s Zhao and CoinBase CEO Brian Armstrong signaling their agreement. Sen. Elizabeth Warren (D-Mass.)\u00a0<a href=\"https:\/\/news.yahoo.com\/ftxs-collapse-shows-regulation-needed-161906147.html\">said<\/a> the FTX collapse proves the need for more crypto regulation.<\/p>\n<p>Euro Pacific Asset Management founder and chief economist Peter Schiff vehemently disagrees, despite being one of the most outspoken critics of digital assets. \u201cWe don\u2019t need more government regulation. We need more free market regulation and personal responsibility,\u201d Schiff told The Epoch Times.<\/p>\n<p>Schiff\u2019s bank, Euro Pacific Bank, was suspended earlier this year by Puerto Rican banking regulators due to \u201cserious insolvency\u201d issues, <a href=\"https:\/\/www.nytimes.com\/2022\/08\/09\/business\/euro-pacific-peter-schiff.html\">yet<\/a> regulators acknowledged the bank did indeed possess sufficient capital in a settlement months after. According to Schiff, the regulators of the U.S. territory also blocked a proposed purchase of Euro Pacific, causing him to lose millions.<\/p>\n<p>\u201cWhile [Sam Bankman-Fried] was stealing billions, U.S. regulators spent two years investigating my bank. They found that I did nothing wrong,\u201d Schiff said in an email. \u201cRegulations do far more harm than good. The amount of money the public loses as a result of regulation, often in the form of higher prices, is much higher than the amount of money they would have lost without regulation.\u201d<\/p>\n<p>Schiff also criticized central banks for artificially suppressing interest rates, resulting in asset bubbles.<\/p>\n<p>\u201cDuring those bubbles investors do lots of stupid things, like giving billions of dollars to a kid like [Sam Bankman-Fried],\u201d he said.<\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-liam-cosgrove\"><img decoding=\"async\" src=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2022\/11\/04\/LiamCosgrove_WEB.jpg\" alt=\"Liam Cosgrove\" \/><\/a><\/p>\n<p>Follow<\/p>\n<\/div>\n<p>Liam Cosgrove works as a freelance journalist covering business, markets, and finance. He received his bachelor&#8217;s degree in mathematics from the University of California, Santa Barbara.<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>News AnalysisOn Sept. 3, 2022, veteran short-seller Marc Cohodes leveled several bold accusations at crypto exchange FTX and its founder Sam Bankman-Fried. Among the many predictions made by the short-seller<\/p>\n","protected":false},"author":1,"featured_media":1898996,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[5458,7485,7484,7483,7334,5157,4996,4188,3819,4633,6179],"class_list":["post-1770961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-bongino","tag-citizen","tag-draw","tag-faster","tag-ftx","tag-journalism","tag-mainstream","tag-media","tag-report","tag-scandal","tag-uncovering"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1770961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1770961"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1770961\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1898996"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1770961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1770961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1770961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}