It’s time to follow the money and understand who’s paying you!

The story surronding FTX enters a new dimensions. Thanks to some reporting we found out how SBF bought a major crypto media outlet. This story just keeps getting better!

Don’t Trust. Verify. This is a saying you’ll often read in the Bitcoin space. 

Unfortunately, it never rings a bell. People want to be reminded of it every day. Either by being scammed into yielding products or turning an eye to major red flags. 

Today, I want to focus your attention on the second aspect. You may have read about all the ludicrous articles in the mainstream media where journalists ignore the daylight robbery surrounding FTX. The insiders at both companies created tokens out of thin air, often manipulated markets, and used them as loans for significant investments.

The latest news these days showed how FTX didn’t only invest in finance companies - BlockFi, RobinHood, and Voyager, to name a few - but also in media companies. I mainly speak about the crypto-related media company ‘The Block’ today. Looking at the coverage in traditional outlets, I wouldn’t be surprised if they had investments with them as well. That hasn’t been verified yet, so I can’t comment. 

Earlier last week, we read some tweets about possible side deals between Sam Bankman-Fried and Mike McCaffrey, formerly the CEO of The Block. It was Axios who broke the story with a report on December 9th. In it, you read how SBF secretly funded The Block mainly through back-door loans. 

There were a few loans, all made out to different companies. All companies McCaffrey controlled or was the sole owner of. Initially, the deals were done to finance a buyout of investors and make The Block more independent. Ironic, I know. 

As you can imagine, these investments sparked a justified outrage on Twitter and everywhere online. The Block is not a small blog or news site. For many reporters in finance and retail investors, it’s the go-to source for information within the crypto industry. If you read news like this, you start wondering if SBF and FTX, mainly, have bought the site with favorable coverage. 

Funny enough, no upper or senior staff knew about these investments. Two prominent names, Frank Chaparro (News Director) and Larry Cermak (VP of Research), were at the center of attention. Both of them denied knowing about these investments, which is where I got the title for this article. 

The Watergate story has popularized a simple rule in journalism: Follow the Money! Anyone working in media should have heard this at least once during their training. 

From my experience, mainly talking to friends in the industry and questioning what they believe one should do, something is very clear. Journalists should have a sixth sense and always ask who’s financing their work, which is my main critique of this bombshell. 

Although there might be a possibility that Frank and Larry didn’t know of these payments, if you take a closer look at their coverage of events in the past six months, you start doubting them immediately. 

They were particular about uncovering the Luna crash and its consequences in the market. At one point, you felt they had some personal vendetta with Do Kwon and wanted justice for everyone. Showcases by these articles here: 

• After Terra’s stablecoin implosion, battered investors ask ‘where is Do Kwon?’

• Terra validator hits out at Do Kwon’s ‘dictatorship model’ on key fork vote

• Do Kwon, Terraform Labs, others hit with class action lawsuit

One could also make a case for how favorable The Block was with Do Kwon before the Luna implosion, but that’s a different story. You start wondering if you compare these articles to the coverage The Block published about FTX and SBF up until last Friday. 

Don’t get me wrong; they didn’t hold back. There were a lot of opinion pieces about FTX and a fantastic interview by Frank Chaparro with SBF in which he asked some excellent questions. Besides that, these days, they cover FTX quite harshly as well: 

• FTX CEO Ray details firm’s lack of controls, sophistication under SBF in testimony to Congress

• ‘We came, we saw, we researched’: Bankman-Fried considered closing Alameda in September

• A ‘false messiah’ captivated crypto, Jump’s Kariya says in FTX tweetstorm

However, knowing now how they were probably paid by FTX client funds leaves you with a sour taste. You start wondering if they were purposely hiding information in the past. Was their coverage favorable of FTX? If SBF was on a podcast before, would he receive softball questions? 

The Block has a research division and product as well. One, they market to institutions for a monthly subscription. Larry Cermak is the VP and is now famous for saying FTX was safe just a few days before they blew up. 

He also published a spreadsheet with all the investments Alameda made. All of his CEO’s companies were on that spreadsheet. One of the companies has his last name as the company’s name. Again, looking at this, you start wondering if they didn’t know?! 

After all, he’s a researcher and should have deep-dived into these companies. It would not have taken much effort to find out how his boss was bought and paid for by FTX. You might say they didn’t do that for every company, but again, it leaves you with a sour taste. 

As soon as the story broke, Frank and Larry used Twitter to explain how they didn’t know. They pretty much used the go-to apology. Saying how they were shocked and in disbelief. They don’t know what to do and will look into a solution with everyone on the team or in the company. 

Which is nice and all, but my main criticism of this event. Both of them are veterans of the space. While everything seemed to be going great last year, they enjoyed being around influential people, from SBF to both founders of 3AC and Do Kwon of Luna. They did multiple interviews with them, published detailed research, and lured ordinary people into the whole crypto space. 

Not once did they stop and think, hang on a minute. Where is all of this money or influence coming from? Are we getting paid by these clowns? No! They blindly trusted their sponsors and investors, which they critiqued with traditional finance, to be doing as well. 

I’m not saying Bitcoin media outlets do this better. Most of them are sponsorship platforms for more prominent Bitcoin brands as well. For a tone of them, you could also argue how they’re trying to influence their readers to use certain services while being paid by them. 

What is straightforward, too, is how we need to hold ourselves and the information we provide more accountable. Instead of sharing something immediately on Twitter, we should take some time to research, asking ourselves who’s providing that information or money and how we can inform the reader about possible relationships.