By Oleg Kozlovskyy @ Shutterstock.com
Have the tides turned on Tom Brady? What else could go wrong for the NE Patriots’ former quarterback? He is getting divorced from Brazilian fashion model Gisele Bundchen, one of the highest paid models in the world. Brady’s legendary football career seems to have stalled (at age 45), to be kind.
On top of that, gone bust is his cryptocurrency exchange, in which Brady was invested. Now he and other celebrities are named in an FTX lawsuit.
The FTX Enablers
It might not be comforting, even if you were one of the hoodwinked crypto investors, but Mr. Brady is not the only superstar with egg on his face. Stephen Curry, Shohei Ohtani, and Naomi Osaka, to name just three, “also got greedy and believed the vision of Sam Bankman-Fried,” reports Om Malik in the Spectator.
Overnight, Sam Bankman-Fried has gone from crypto wunderkind to infamous huckster. The celebrities, influencers, and traditional media outlets that helped make him a star shouldn’t be allowed to absolve themselves as quickly. Brady and many others fell for the charms of cheap, easy lucre and have helped legitimize what looks like it was nothing more than a giant scam. In our networked reality, the follies of celebrities, influencers, and media outlets are magnified, and their impact is intensified.
Now You Tell Us?
As Mr. Malik explains, it’s hard to spot the difference between a snake oil salesman, an expert, and a traditional media outlet.
Social media algorithms don’t discriminate, treating every piece of content with equal respect or disdain as long as it gets engagement. FTX exploited this weakness to use social media, public relations, and a savvy media strategy to become the biggest crypto brand in the world.
Whether you are an independent blogger, a TikTok influencer, a YouTuber or a mainstream media outlet, it’s easy to rig the game.
When the market is wallowing in information, how does anyone distinguish between what is real and what is fake? For the past few years, SBF’s face adorned bus shelters and billboards. “To a normal person, that was enough to legitimize SBF and FTX. After all, only the experts have their faces on billboards.”
Suddenly It Seems Normal?
Who could get away from the fog of FTX or SBF? As Matt noted to me recently, What the heck happened to Miami’s American Airlines Arena. When the devil did it become FTX Arena? Where’d that come from?
Online, it has been hard to get away from the fog of FTX and SBF. For a while, it felt as though every podcast about finance or crypto either featured SBF or was sponsored by FTX. The company also blanketed social media by getting micro and macro influencers to discuss their book. To get mainstream acceptance, FTX even roped in beauty entrepreneur Lauren Remington Platt, founder of the high-end beauty company Vensette, to target partnerships with luxury brands.
The House of Cards Tumbles
Andrew Odlzyko, a University of Minnesota professor who has written extensively about manias and bubbles, argued (while he was working at Bell Labs) that the notion of “internet traffic doubling every 100 days” was bunkum.
At the time, no one believed him, continues Mr. Malik, “because everyone wanted to believe that the Internet and the bandwidth boom were real.”
But it was a lie that helped inflate the telecom bubble. Eventually, he was proven right, and the house of cards came crashing down.
“Part of it is that journalists are part of the crowd and get caught up in the mass delusion,” said Odlyzko. “And part of it is ‘willing suspension of disbelief’ that is accentuated by the need to attract readers, which forces folks to emphasize the spectacular.”
Red Flags Go Missing
How does a company, asks a perplexed Mr. Malik, go from being worth next to nothing to being valued at $32 billion in just over three years?
That stratospheric rise alone should have raised some serious questions. The old Forbes, under the leadership of pugnacious editor-in-chief, the late Jim Michaels, would undoubtedly have had reporters looking under the floorboards. Instead, we got a fawning profile in the Billionaires Issue, with the then twentysomething gracing the cover. Fortune did one better, proclaiming Bankman-Fried the next Warren Buffet — what a diss for the Oracle of Omaha, who has consistently made money for a few decades and is a noted crypto-skeptic.
In a classic case of shutting the barn door after the horse has bolted, Forbes published a story that began with a half-hearted mea culpa: “As the autopsy of Sam Bankman-Fried’s crypto empire begins, it’s worth saying that there were red flags all over the place. We missed them.” No kidding, Sherlock. “It was all bullshit, of course, and I didn’t see through it,” Jeff John Roberts, author of Fortune’s cover story, wrote in his newsletter. “Like any good con man, SBF told us a story we wanted to hear and were eager to believe.” That’s cold comfort to any retail investor who read those stories and decided to put their hard-earned cash in the hands of a conman.
In this age of networked media, “the delusion is much larger, the impact much wider, and the ultimate pain much more profound.”
The apologies of YouTubers and mea culpa of reporters are not enough. SBF might have been the field marshal of this con job, but the influencers were the soldiers, the celebrities were the officer class, and the media were like medics. All of them helped FTX fill its coffers, only to then lose it all.
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