By Oliver Darcy | CNN
The staggering level of blatant deception orchestrated by former crypto king Sam Bankman-Fried has not been uncovered by either government investigators or a major financial news organization like the Wall Street Journal.
Instead, the public’s first glimpse of Bankman-Fried’s alleged wrongdoing — known to insiders as SBF — came earlier this month from a small news site unknown to much of the public that has spent years exploring the turbulent and murky world of crypto record: CoinDesk .
In fact, the reporter and editor duo working to unveil the story that set off a breathtaking cascade of events that led to the evaporation of billions of dollars were unaware of the news they had on their hands when they first heard a document of which was received raising doubts about the stability of SBF’s crypto empire.
“Hi Nick,” Reporter Ian Allison emailed editor Nick Baker about his original story plan, according to a copy of the message provided to me by Insane Rush.”
Allison had received a financial document showing the 30-year-old SBF engaged in shady behavior to use his crypto firm FTX to shore up his separate investment firm Alameda. But that wasn’t obvious at first glance, and it took “a couple of days to figure out the story,” Baker recalled in a phone call with me this week.
Baker said that both he and Allison “knew it was an important document,” but stressed that the two initially had no understanding of the massive story buried in the spreadsheet of numbers.
“Did I know I would speak to you today? Hell no,” Baker told me bluntly. “I didn’t expect it to be so gigantic.”
Over the next few days, Baker worked from a home office in New York with Allison, who lives in Scotland, to “carve” the financial document into a story. On November 2nd, they released the explosive report, quickly catching the attention of the crypto world and shaking the foundations of the powerful exchange FTX. SBF, the prolific tweeter, was noticeably quiet.
“It was something that made a deep impression on all of us,” Baker recalled. “Sam, whenever there’s a big story about him, he’s not afraid to tweet it. And his silence was deafening. That was one of the things that surprised us in the days that followed. That he didn’t say anything.”
This silence was likely due to SBF knowing that CoinDesk had uncovered something big. And he had good reason to believe that. The article cast huge doubts on the health of FTX and spurred an effective rush of investors to suddenly withdraw funds from the company, threatening its solvency.
Following the announcement, SBF’s main competitor, Binance, proposed saving the company through an acquisition. But in a second big scoop that led to the implosion of FTX, Allison learned the crucial deal would not go through. Baker said that the publication of this story, which he knew would unleash “chaos and destruction” in the crypto world, made him concerned.
“I was nervous,” Baker said. “It was definitely cold hands [moment] – not because I thought so [the scoop] was wrong, but because I knew it was right. I knew the pain in front of me. Telling a truthful story has consequences.”
Shortly thereafter, with the crypto market and his company in chaos, SBF resigned in disgrace and FTX went bankrupt, marking one of the most astonishing collapses in financial history.
“There are few parallels for a story with so much impact – and so fast,” Baker said, noting that FTX’s demise happened much faster than that of companies like Enron. “We dropped the story and in a week and two days they’re bankrupt and this leading figure in crypto has fallen. It’s breathtaking. Really stunning. I’ve never seen anything like it.”