You Can Thank Journalism For Sam Bankman-Fried Being Put in Cuffs

Disgraced FTX co-founder Sam Bankman-Fried, once a darling of the media, was put in handcuffs this week, a development that funnily enough would not have happened were it not for journalism.

Bankman-Fried was arrested in the Bahamas on Monday evening on eight charges: conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate campaign finance laws.

He’s expected to be extradited to the United States within the next few weeks, though it could be longer if he chooses to fight extradition. If convicted on all charges, Bankman-Fried, who went from being worth more than $20 billion to almost nothing, could face up to 115 years in prison.

Additionally, the Securities and Exchange Commission charged Bankman-Fried with two civil counts of securities fraud while the Commodity Futures Trading Commission charged him with two civil counts of fraud.

None of

this would have happened if not for CoinDesk, which was a little-known publication before exposing one of the greatest alleged frauds in U.S. history.

Before CoinDesk exposed SBF, the young entrepreneur and his company amassed glowing media coverage, including appearances on the covers of Forbes and Fortune. FTX was marketed in a Super Bowl commercial featuring massive celebrities and won the naming rights of the stadium of the Miami Heat.

The downfall began on Nov. 2, when CoinDesk senior reporter Ian Allison uncovered the relationship between FTX and Alameda Research, contradicting SBF’s claim that the two entities are separate. Allison reported that Alameda’s “balance sheet is full of FTX – specifically, the FTT token issued by the exchange that grants holders a discount on trading fees on its marketplace” and that “Alameda rests on a foundation largely made up of a coin that a sister company invented, not an independent asset like a fiat currency or another crypto.”

The bombshell report was the catalyst for FTX customers racing to withdraw their investments. It also led FTX rival Binance to empty its funds in FTX and back out of an agreement to acquire FTX. The final nail in the FTX and Alameda Research coffin came when both entities declared bankruptcy last month.

CoinDesk also exposed last month what appeared to be a blatant conflict of interest regarding SBF, former Alameda CEO Caroline Ellison and other FTX and Alameda staffers sharing a luxury penthouse in the Bahamas.

The track

record for media coverage of SBF is of course spotty. Media hype around rising stars and their coronation as the next messiah has, and always will, cloud the judgement of journalists. But this case also bodes well for intrepid journalism that ignores hype in favor of scrutiny. Were it not for CoinDesk, SBF would still be free to do what prosecutors allege: misusing customer funds including for his political contributions apparently to curry favor with lawmakers in order to influence government regulation of the crypto industry. It’s the job of the press to hold those in power accountable, not fawn over them. CoinDesk fulfilled that mission.