CoinDesk Broke Big News About FTX. Now the News Is Closer to Home.

avatar
by Jacob Solomon Jan 16, 2023 News
CoinDesk Broke Big News About FTX. Now the News Is Closer to Home.

FTX was worth tens of billions of dollars. Sam Bankman- Fried, the company's chief executive, was a billionaire.

The sister company of FTX, Alameda Research, was rumored to be on a shaky financial foundation that morning. A week after the scoop, FTX and Alameda filed for Chapter 11 protection. Federal fraud charges have been filed against Mr. Bankman- Fried.

One in a sea of publications that started up over the past decade to cover cryptocurrencies was raised by Ian Allison's article. The industry shot to new heights in 2020 and many publications have been accused of giving it preferential treatment. The unusual position of covering an industry that helps fund their operations has set off debates about their independence.

The problems for CoinDesk are getting worse. One of the businesses owned by Digital Currency Group, a venture capital firm with stakes in numerous cryptocurrencies, has financial troubles of its own. Since FTX's collapse, it is part of the broader impact.

DCG-owned Genesis laid off 30 percent of its staff. Genesis was charged with offering securities that were not registered with the federal government. Billions of dollars of assets were raised from hundreds of thousands of investors without being registered.

The developments forced CoinDesk to cover its owners and publish many articles about them.

"We cover DCG like any other company that we cover, that's part of our regular coverage." said MichaelCasey in a statement.

Card 1 of 5

FTX is a question. One of the world's largestcryptocurrencies exchanges is now bankrupt. It gave customers the ability to trade digital currency for other digital currency or traditional money. Risky trading options that are not legal in the U.S. were built into the company's business.

Sam Bankman- Fried is a person. He is the founder and former CEO of FTX. He was a major donor to the Democratic Party and was known for his commitment to giving away his wealth in efficient and logical ways.

FTX's troubles began. The chief executive of the world's largest exchange sold his stake in FTX to Mr. Bankman-Fried in exchange for a number of FTT token. Mr. Zhao said in November that he was going to sell the token. The move caused the price of FTT to fall.

FTX's collapse was caused by something. The price went down after Mr. Zhao announced. The company had an $8 billion shortfall due to traders withdrawing. FTX was forced to file for bankruptcy because of a loan offered by its main rival.

Mr. Bankman- Fried was arrested. The Justice Department and Securities and Exchange Commission are looking into whether FTX used customer funds to prop up Alameda Research, a platform that Mr. Bankman- Fried helped start. Mr. Bankman- Fried was arrested in the Bahamas for lying to investors. Civil fraud charges were filed by the S.E.C. the next day.

The head of communications for Digital Currency Group said that the company was not involved in editorial decision-making.

It is important to the industry for the leading outlet to run independently.

Five years after the introduction of the digital currency, coinDesk started. The publication, which is based in New York, was small for a long time.

The company has 160 employees in countries such as the United States, India and Turkey, and its growth accelerated during the time of thecryptocurrencies boom. There is a news channel at coinDesk.

Policy, cryptocurrencies markets, and the idea of a web3 are some of the topics covered by the team at CoinDesk. The publication has a lot of information about the government and the industry.

Before Mr. Allison wrote about FTX, it was covered by the publication.

At a conference in October, Mr. Allison was told about weakness in the balance sheet of Alameda, but he did not mention it to anyone. The source said that FTT was being used to lend other assets. The balance sheet was obtained at the center of the article.

Sam Bankman-Fried, left, leaves Federal District Court in Manhattan in early January after pleading not guility to charges that he engaged in widespread fraud.Credit...Karsten Moran for The New York Times

Readers were drawn to the website by the article. The publication had 17 million page views in November, up from 10 million in October. Coverage of FTX was the reason for over five million views. The chief executive of Alameda had dated Mr. Bankman- Fried.

The deputy editor in chief thinks the scoop has brought more recognition to the company.

Major legacy media outlets have cited the publication in their coverage.

The collapse of FTX exposed some of the ties between the publications and the industry. The Block, which covers the industry, received undisclosed funding from Mr. Bankman-Fried, as well as a $16 million loan from Alameda that was used in part to finance an apartment in the Bahamas for the company's chief executive. Questions about the reporting on FTX were raised by the funding from Mr. Bankman- Fried. Mr. McCaffery submitted his resignation. He wasn't reachable for comment.

DCG didn't receive any money from FTX or Alameda.

Advertising is the main source of revenue for the site. Money is made from the Consensus festival. The speaker last year was Kimbal Musk, the brother of Elon Musk.

The decline in the industry hurt marketing budgets. The next Consensus is likely to be smaller because of less sponsorship money, according to him.

There have been rumors that the company has received offers to be bought out. The company didn't give any information about its finances or any possible offers.

The company is committed to building a long term media business. He said that it was not going to go away no matter what anyone wanted.

Regular coverage of DCG is for now. There were layoffs at Genesis, charges from federal regulators against Genesis, and a dispute between Barry Silbert, the chief executive of DCG, and a co- founder of Gemini.

Mr. Allison, the reporter with the big FTX scoop, talked about the impact of the winter on a media platform. My hope is that we can continue to build out the team and bring in-depth independent reporting to the market.