Taking Down SBF

From left: Toby Leah Bochan, managing editor; Danny Nelson, deputy business editor; Tracy Wang, deputy managing editor; Cheyenne Ligon, U.S. regulatory reporter; Nik De, managing editor for global policy and regulation; Nick Baker, deputy editor-in-chief; David Morris, chief insights columnist; Michael Casey, chief content officer; Ian Allison, senior reporter; Anna Baydakova, investigative reporter; Kevin Reynolds, editor-in-chief; and Cam Thompson, news reporter. Photo: Brian Finke

There is no single cause of the fall of Sam Bankman-Fried, who was arrested in mid-December at his home in the Bahamas on charges of wire fraud and conspiracy. But it would be hard to overstate the importance of the revelatory work by CoinDesk, an outlet of hard-core financial reporters that was the first to publish indisputable proof SBF’s crypto empire was on shaky ground. On November 2, reporter Ian Allison broke the news that SBF’s formidable hedge fund, Alameda Research, was secretly propping up the crypto exchange FTX, the wellspring of his wealth and influence.

“This story took about a month from the point where I was told off the record that the Alameda balance sheet was weaker than most people perceive,” Allison says. When he finally got a look at its assets, confirming the gist of the rumors, the mood was electric. “What’s going through your head is, excuse my French but, Holy shit,” says Kevin Reynolds, CoinDesk’s editor-in-chief.

The story set off an avalanche, upending the industry CoinDesk covers — and, in turn, relies on. Its corporate parent is Digital Currency Group, a crypto venture-capital firm that got caught off guard by the FTX collapse to the tune of at least $175 million. Since then, there have been questions about whether CoinDesk, which is editorially independent, would ultimately trigger the demise of the company bankrolling its journalism.

“Would I love for a good story I published to result in me losing my job or the company I work for blowing up? I’d be insane to say, ‘Yes, I hope that’s what occurs,’” says Nick Baker, who edited Allison’s story. “But at the same time, I maybe naïvely believe my job is to help us tell important stories.”

Reynolds, who has spent about 30 years in financial journalism, predicts that more bad actors will soon be outed, but he doesn’t relish the prospect. Allison agrees. “I have to say, it’s not my goal to destroy people’s businesses, and at the time when I saw users draining assets away from FTX, I was quite dismayed,” Allison says. “Yeah, the whole thing was absolutely astonishing.”