He's right about the specific NYT article not including much pertinent information, but they're a serious journalistic publication and have verification standards for sources.
There are a lot of really crazy things happening with this story they don't touch upon.
It's worse than a 'puff piece' to the point I suggest there is background manipulation going on. This is 'reputation laundering'.
There is a huge amount of money here, and a ton of very, very powerful people involved.
I suggest that within a few weeks this will be known to be truly a criminal enterprise and this NYT article will not age well.
To be clear, I enjoyed Levine's commentary on the situation so it's not just because I dislike mainstream publications.
Not sure how this stuff makes it to the top on HN.
I myself greatly enjoy it and am happy to see it become more widespread, but that's mostly because I grew up immersed in the culture.
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This statement makes zero sense. What is the arbitrary threshold of tweets to "serious work"? What correlation is there to making tweets and writing articles? This is just a weird form of elitism - congrats on not posting tweets, I guess.
Appeals to authority are weak compared to facts laid bare. The fact is that the NYT author has made clear biases against other exchanges and overly forgiving of a single exchange guilty of customer theft, which is papered over in his article. This is unusual compared to all other reporting of FTX amongst mainstream jouranlists. There were no articles attempting to humanize Bernie Madoff, this article hides the fact that SBF ran a ponzi scheme, imagine the same with Madoff, it would be shocking. This is shocking.
Imagine having the Bernie Madoff subheading, "he had expanded too fast and failed to see warning signs". This is the scale of ludicrousness here. The facts aren't subjective or unclear in any way, FTX didn't have customer deposits, which they claimed to have up even until the very end. When it comes to journalism, this is an unforgivable failure.
This is literally one of the biggest fraud cases in history.
By their own 'standards' they are compelled to use the word in proper context.
11/10: Meanwhile, the S.E.C. and the Justice Department are said to be investigating FTX for potential securities violations. [...] Whether S.B.F. or others associated with FTX also face civil or criminal action — and where such legal fights would take place — remains unclear.
- https://www.nytimes.com/2022/11/10/business/dealbook/ftx-cry...
11/11: Authorities worldwide are intensifying their scrutiny of the embattled cryptocurrency exchange, amid concern about improper use of customer money.
- https://www.nytimes.com/2022/11/11/business/dealbook/ftx-sbf...
11/11: The bankruptcy proceedings may be only the beginning of Mr. Bankman-Fried’s legal troubles. Federal investigators are examining the relationship between FTX and Alameda, and customers are likely to file lawsuits.
- https://www.nytimes.com/2022/11/11/business/ftx-bankruptcy.h...
11/12: The implosion of Mr. Bankman-Fried’s cryptocurrency exchange has already cost customers billions of dollars in lost crypto deposits, setting off law-enforcement investigations that could lead to criminal charges. [...] Investigators at the S.E.C. and the Justice Department are examining whether Mr. Bankman-Fried improperly used customer funds to prop up Alameda Research, a trading firm that he also owns. FTX lent as much as $10 billion in customer funds to Alameda, according to a person familiar with the finances.
- https://www.nytimes.com/2022/11/12/business/ftx-cryptocurren...
11/13: “Sam and FTX had a lot of good will — and some of that good will was the result of association with ideas I have spent my career promoting,” the philosopher William MacAskill, a founder of the effective altruism movement who has known Mr. Bankman-Fried since the FTX founder was an undergraduate at M.I.T., wrote on Twitter on Friday. “If that good will laundered fraud, I am ashamed.”
- https://www.nytimes.com/2022/11/13/business/ftx-effective-al...
11/14: Should the U.S. have moved faster to create an attractive regulatory environment so companies like FTX would have moved here and had to abide by Washington’s rules? Maybe. But if the FTX case turns out to be fraud, regulation unto itself may not have been enough to stop it. Madoff didn’t live on an island beyond U.S. jurisdiction — he was based on Lexington Avenue. [...] If we ultimately learn that FTX’s undoing is the first of many in an industry that has been built on a pile of offshore fairy-dust leverage, the regulatory lesson will actually be the opposite: The S.E.C., C.F.T.C. and Treasury will have proved prescient for all their warnings to the public that crypto was too risky.
- https://www.nytimes.com/2022/11/14/business/dealbook/ftx-ban...
11/15: Major questions still remain, such as whether FTX improperly used billions of dollars of customers’ funds to prop up Alameda Research, a trading firm that Bankman-Fried also founded.
- https://www.nytimes.com/2022/11/15/briefing/iran-clampdown-p...
The on-chain anaylsis, digging and commentary done by people on Twitter has been insanely insightful.
This article is very little more than just a gossip rag version of the NYT article.
This characterization is so far from the contents of the article I have to assume this comment is in bad faith or you're extremely biased towards the NYT.
The article is 90% discussing facts/quotes from various sources and 10% speculation on what actually happened by people who are very familiar with crypto markets.
The NYT piece on the other hand contains almost no facts (90% narrative) and throws a pity party for SBF. It's a complete joke.
NYT piece: https://archive.ph/413e0.
E: the author of this piece even states on Twitter that it's mostly a compilation of known information. Nowhere near gossip or speculation.
Whereas this article has a tonne of speculation (none of the stuff about market making has fact behind it, it's speculation based on a handful of tweets) and a heavy reliance on sources that are at best questionable. The stuff about the rogue algo is entirely without evidence, and the stuff about drug taking, whilst lurid, could be entirely tangential to why the company actually collapsed. The NYT isn't going to quote random anonymous users on an EA forum claiming to be ex-employees.
That's definitely not the bar they have or else they wouldn't be able to publish much.
Journalists should be a bit cynical, dig for info. The NYT has more resources than anyone, and should be able to ask around, do some actual blockchain work, interview others.
This story looks like one of the biggest frauds in history, likely because it is, it's the job of the NYT to show at least there's a lot of smoke and put puzzle pieces together (obviously with context), they are not a formal judiciary.
There are so, so many crazy parts of this story that were not addressed it reeks of something awry. For example the co-CEO. There's almost nothing about this guy, as though he does not exist. That's a huge mystery and it's only one small artifact of the story.
This article raises as much suspicion as it clears up.
I also think you're massively overstating the role of the NY Times, yes they have resources but they have to cover massive breadth. The NY Times isn't really going to be an expert in every topic, and there are real expert reporters out there who are going to dig in to this for specialist information. In this case there are reporters covering tech and finance - so you're going to see good articles from Levine, and the Odd Lots people, Michael Lewis was literally shadowing SBF for 6 months. Arguably the Odd Lots guys got to this first - basically getting SBF to admit he was running a ponzi in an interview - an admission that made absolutely no difference because everyone kind of knew it was all a scam anyway. If you said to me there's an article about FTX I would be looking for it in Bloomberg or the FT, not the NYT.
That statement implies a misrepresentation of what I said, and a misunderstanding of what journalists do.
Journalist investigate, source, and provide clarity.
This is one of the biggest frauds in history, it's the job of the NYT to investigate the issue, and show us what's up. If there's likely fraud, they should be spelling that out.
They've already admitted to using deposits to make risky bets at Alameda, which is fraud. There should have been a lot more questions about that alone. Just to start.
Instead, it was a light nothingburger puff piece.
There are better sourced artifacts on Twitter - this very article provides more valuable information that the NYT.
"basically getting SBF to admit he was running a ponzi in an interview - an admission that made absolutely no difference because everyone kind of knew it was all a scam anyway"
To suggest that the people with collectively billions in FTX 'knew it was a ponzi/fraud' and willingly lost all of their money is absurd.
What are they doing when they cite "unnamed sources"? They constantly publish accusations that they have no intention of ever backing up. I'm not saying that they don't believe their sources, but "100% bulletproof" has never been their standard.
> Alameda had accumulated a large “margin position” on FTX, essentially meaning it had borrowed funds from the exchange,
Par 6. Common knowledge, finance-splained and followed by equivocation and hand-waving from SBF.
> On Nov. 6, Mr. Zhao announced on Twitter that he was selling the FTT, spooking customers who rushed to withdraw their FTX deposits
Common knowledge for more than a week (in par 28). More well-known things about the Zhao deal in the next couple of pars. Obv suggesting the two key questions, why did they need a bailout in the first place, and what was wrong with the business that led Zhao not to invest? Needless to say, neither of them is answered in the article.
> Her voice shaking, she apologized, saying she had let the group down. Over recent months, she said, Alameda had taken out loans and used the money to make venture capital investments, among other expenditures.
> Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders moved to recall those loans, the person familiar with the meeting said. But the funds that Alameda had spent were no longer easily available, so the company used FTX customer funds to make the payments. Besides her and Mr. Bankman-Fried, she said, two other people knew about the arrangement: Mr. Singh and Mr. Wang.
> The meeting was previously reported by The Wall Street Journal.
Several day old scuttlebutt taken from another newspaper in par 30+. (And nicely written to suggest that it's an urgent eyewitness dispatch "Her voice shaking")
That's it. Literally no actual news reporting was done in this article.
The high standards of reliability and standing up to scrutiny are worthless, because they are not actually applied to any useful or new information, but just to the human interest color that 90% of the piece consists of. Yes, the 'facts' that SBF has 15 room-mates and not 12, and that he plays League of Legends not Terraria are rigorously fact-checked, but they might as well not be. The actual question of Where did the money go is completely ignored beyond what is widely known.
This isn't news reporting, it's a form of entertainment journalism, which allows people out of the loop to get a sense of the excitement and glamor of what's it like to live in the Bahamas and have your crypto exchange go bankrupt. (And it equally fulfils the desire for other clueless people to tut and sigh over the way the world is going.)
I can't see the article because of the login, but what does the piece achieve? Does the interview ask Sam hard questions?
I don't see where you're justifying that. I read this article and it gave me a good overview of the situation. You're right, I guess, that it's not "new" investigative journalism and that if I'd been paying better attention I could have found the same info elsewhere and earlier.
I don't see how a correctly-reported review piece becomes "entertainment journalism" though. Do you make the same article about wikipedia?
I did not say anything about "new investigative journalism". I said it was not news reporting.
The claim that is is entertainment journalism is very simple. This type of piece is written, not to inform, but to entertain. That's why it focusses on color and character, while missing basic story details - the 5 W's, any overview of how the bankrupt businesses worked, etc. Such pieces are often designed to give the impression of information, because this impression is part of the entertainment experience. You can easily find decent and free writing on this topic which provides way better analysis and is generally accurate and honest.
As you have probably noticed, stories about scams and frauds are a very big business, and articles about them are now part of a well-worn pipeline by which books, movies and mini series are made. Very few of these have any commitment either to accuracy in general or to useful information about why such scams are possible, why they are socially important, or how they can be stopped. They exist merely to entertain and titillate. A writer like the author of this piece, will be aware that they are part of this machine, and that there is lots of career advancement to be made in writing fluff about grifters, particularly in a way which tends to get you closer to other grifters.
Wikipedia is not news reporting either. Not sure of your point, however note that the wikipedia page about Sam Bankman-Fried, while shorter than the NYT article, contains vastly more detailed information about his career, and has 85 citations to its sources.
Again, I read it and liked it. If you don't want me to read this piece, what summary should I be reading?
Not once did the article tackle the question of where did the money go or why is it okay for this persons company to misplace billion of dollars of customer money?
Isn't it much more useful to write something which actually tries to answer the question of what happened, albeit with appropriate caveats, than something which doesn't advance the understanding of the reader at all?
This piece speculates very strongly about SBF's stimulant usage degradating his cognitive abilities. Eg:
> If the above observations about SBF’s personality and competence are even half true, that would go a great deal toward explaining Alameda’s losses.
The entire article goes into much further depth. But it doesn't even speculate about malice.
> losing all the money accidentally rather than malice (far more likely)
They sound an awful lot like trading / accidental losses than malice to me.
The moment they touched customer funds it became fraud and theft.
This was not accidental. Losing it in trading might have been, but it was trading with stolen funds.
That's different to malice which goes to motivations.
For the greater good of humanity. The most effective altruism.
Yes, it paints one picture of how the losses could have added up, but I'm looking forward to more exhaustively investigated reports grounded in more than heresay and gossip.
You'll never find rampant drug abuse in the financial industry.
Certainly not on Wall St.
Is it more fun if the shared story has a clear villain or more fun if the shared story has a diffusive, complex relationship between good and bad between not only the characters but also the readers?
This isn't a criminal court.
Makes it sound like poor SBF got unlucky and it wasn't his fault he recklessly gambled $8+B of customer deposits
Ok? Regardless, this piece does a significantly better job than the NY Times and the "serious journalistic publication".
The times articles actually misleads readers into thinking that the FTX downfall was moreso from bad timing & outside attacks then from SBF fraudulently stealing user funds.
> immediately cite anonymous Twitter anecdotes as better sources
The Twitter accounts directly quoted have many followers and a long history of tweets that are easily searchable.
If you're referring to the Autism Capital tweet, that's a tweet of a photograph which you can look at yourself. It's clearly a stimulant that says EMSAM on it.
Name the specific tweets in the piece that you find incredulous rather than an ad hominem.
It goes both ways. It seems like they didn't do much verification of Sam's claims.
In fact, that's what happened this time.
Perhaps this is why the NYT's Judith Miller has such prominent roles in journalism.