The "Bernie Madoff" of Crypto: Unmasking the FTX Controversy

The world of cryptocurrency is no stranger to scandal.

by Faruk Imamovic
The "Bernie Madoff" of Crypto: Unmasking the FTX Controversy
© Getty Images News/Drew Angerer

The world of cryptocurrency is no stranger to scandal. However, the recent allegations surrounding Sam “SBF” Bankman-Fried, the former CEO of FTX, have sent shockwaves through the community, drawing parallels with one of the most infamous figures in the world of finance: Bernie Madoff.

From Finance Titan to Controversial Figure

Charles Hoskinson, the founder of Cardano, did not mince words when he likened Bankman-Fried to Bernard Lawrence Madoff, the mastermind of the most significant known Ponzi scheme in history.

Valued at a staggering $64.8 billion, Madoff's scam stands in infamy, not least for the fact that he once served as chairman of the Nasdaq stock exchange. The controversy surrounding FTX's former CEO, however, does not end with mere comparisons.

Hoskinson’s criticism zeroes in on what he perceives as a biased media giving Bankman-Fried an unwarranted "free pass." The media's overt attention towards Bankman-Fried, even in the face of allegations and evidence suggesting FTX’s involvement in customer fund misappropriation, has been stark.

Taking to the platform X (formerly Twitter) on Oct. 9, Hoskinson expressed his bewilderment at the "media frenzy" surrounding SBF after the FTX collapse. The Cardano visionary specifically named Michael Lewis, whose recent book on Bankman-Fried gained significant media attention in the run-up to the FTX CEO's trial.

Hoskinson derisively referred to the work as an "apology tour." Highlighting the media's indulgence, Hoskinson observed, “We saw this with the kid gloves treatment by the New York Times and now a book that’s an apology tour.

It’s extraordinary to me that the Bernie Madoff of my generation is getting a free pass from the media. It does show you how profoundly corrupt things have become especially if you have the right friends”. Behind the Curtain of FTX's Fall At its pinnacle, FTX held the distinction of being the third-largest crypto exchange.

Its collapse in November 2022 came after a successful multimillion-dollar funding round earlier in the year. At the time, SBF pointed fingers at "external market conditions" and a "liquidity crunch" for the nosedive. However, investigations by U.S.

enforcement agencies painted a different story. As the trial against Bankman-Fried unfolds, a clearer picture of alleged deceit emerges. Reports suggest that he spent millions on PR campaigns to craft a specific image. Notably, the former CEO reportedly paid heavyweights like Tom Brady and Kevin O’Leary millions merely for a few days of their endorsement.

As the legal proceedings continue, one thing is certain: the crypto world will be watching closely, and the story of FTX and its former CEO will remain in the annals of financial history.