On the recent episode of the popular American TV Show ‘60 Minutes’, in which Author Michael Lewis was interviewed for his new book “Going Infinite” – a non-fiction book on Sam Bankman-Fried, Mr. Lewis said such statements sparked a fire in the cryptocurrency community.
Words That Sparked Fire
As the trial of the FTX fraud case is about to begin today, 3rd October, the whole world is on edge to listen to the arguments and counter-arguments provided by the two parties.
In his long interview with ‘60 Minutes’, Michael Lewis says two stories are to be presented in the courtroom. One story accuses him of the fraud, whereas one story presents Bankman-Fried as an innocent.
Many allegations arose from the common public and experts that the FTX fraud was because of its ‘ponzi scheme’. However, what Lewis said in regards to this, was more shocking.
Lewis says in his interview, “This isn’t a Ponzi scheme. When you think of a Ponzi scheme, I don’t know, Bernie Madoff, the problem is– there’s no real business there. The dollar coming in is being used to pay the dollar going out. And in this case, they had– a great real business. If no one had ever cast aspersions on the business, if there hadn’t been a run on customer deposits, they’d still be sitting there making tons of money.”
Here, the ‘If no one had ever cast aspersions….” refers to Binance, as Binance’s back out from their strategic collaboration made FTX file bankruptcy on November 11, 2022.
Response from Binance
John Deaton, the lawyer for Ripple’s XRP holders, jumped at the chance to refute this story. Deaton expressed his displeasure with the “expert” in a tweet.
Using the ‘clown’ emoji, he says, “He can’t be that stupid” and questioned the sanity of anybody who would assert that criticizing the company caused a run on consumer deposits, which resulted in FTX’s financial difficulties.
Changpeng Zhao (CZ), the founder of Binance, also commented on John Deaton’s tweet – “He’s probably wishing everyone else to be that stupid, but…”
The conversation between Deaton and CZ sheds insight into the subtleties and complexity of the FTX catastrophe. Blaming Binance for casting doubts that caused a rush on client deposits oversimplifies the situation and disregards other potential contributing causes. Additionally, it calls into doubt the authority of the “expert,” who made such a claim on a platform as significant as “60 Minutes.”
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