The SBF Myth Shattered: Media, Judiciary, Politicians, Who are the Enablers?

Original Title: Crypto Twitter Found SBF's Fraud

*Original Author: *Balaji* Srinivasan*

Translation: Qianwen, ChainCatcher

The existing system does nothing ------ until the internet exposes everything.

Have you seen those superhero movies? Batman chases the villain, ties him up, and leaves him for the police to handle. The SBF incident is just like that. The internet hunted down this fraudster, gathered irrefutable evidence, and handed him over to the government. Then, from Elon to the affected Indian users to everyone else, they shouted online for a whole month, and finally, the government reluctantly took him away.

Now he has been convicted, and we have witnessed a bizarre history. Clearly, this system did do something; it was under the heavy pressure of Twitter evidence that they began to investigate SBF, the obvious fraudster. Yes, it was Twitter that prompted the government to take action. How do we know? Because the entire case was unraveled on Twitter from start to finish.

• It was Allison who revealed that SBF no longer had sufficient funds, while Axis reporter Dan Primack was interviewing SBF about whether he could solve world hunger.
• It was Coinapult founder Erik Voorhees who forcefully questioned SBF on Bankless, while Bloomberg reporter Joe Weisenthal was having a pleasant chat with SBF on the podcast Odd Lots.
• It was crypto author David Z. Morris who called FTX a crime, while New York Times reporter David Yaffe-Bellany praised SBF as a philanthropist.
• It was Twitter that proved SBF was a scam, while the New York Times Deal Book column applauded this scam.
• It was on Twitter that people posted about SBF donating to Democratic politicians, even as those politicians welcomed him into Congress.

The New York Times, Congress, Bloomberg, Axios ------ all these institutions failed, while Coindesk , Bankless , and Twitter succeeded. Before Erik Voorhees and Ian Allison discovered the issue, not a single corporate journalist, politician, regulator, or police officer thought to investigate SBF. In fact, even the most oblivious corporate journalists in modern history admitted that citizen journalists "performed better than traditional media in reporting the FTX collapse."

The only reason SBF was exposed (not to mention his conviction) was that people were posting on Twitter.

The Story Behind SBF

If you got the last question right on an exam but failed all the other subjects, you would get an F, and that’s what happened here. The existing system, for which we paid trillions of dollars, got the last question right (eventually capturing SBF), but failed utterly in every other aspect. Politicians failed, journalists failed, regulators failed. The criminal justice system eventually succeeded, but only after failing everywhere else ------ and after the internet built the entire case for them.

Why Did the Justice System Fail?

• When will the politicians who were funded by improperly obtained money from SBF (starting with Biden) step down? That’s what I want to know.
• When will the journalists who worked for SBF retract their endorsement articles? That’s what I want to know.
• When will regulators, who attacked Bitcoin ETFs while meeting with SBF, admit their regulatory impotence? That’s what I want to know.
• When will the government, which only pursued this case after the internet gathered clear evidence of his guilt, acknowledge even a little? That’s what I want to know.

Clearly, none of this will happen. SBF's ill-gotten gains affected elections across the nation. These actions will never be undone, which means SBF essentially took the fall for all these people ------ while the bad actors escaped punishment once again.

The entire SBF incident is not a great victory for the existing system in the U.S. ------ it is both an indictment of him and an indictment of them. Fortunately, we have the internet. As we will detail, it was the decentralized network that truly caught SBF, not the centralized state.

Politicians' Dereliction of Duty

Recall that SBF was the second-largest donor to the Democratic Party after Soros himself. People acknowledged that he was one of the main drivers behind Biden's election, and the money behind it has now been found to be ill-gotten. Even after his fraudulent actions became public, Democrats like Maxine Waters praised him as "honest," "welcomed" him to testify at congressional hearings, and even blew kisses at him during the hearings.

In fact, the current chair of the House Financial Services Committee, Waters, expressed "surprise" that SBF was arrested before he had a chance to testify in Congress. Why was she surprised? Perhaps because SBF had been closely collaborating with her and others, primarily pushing a bill that would criminalize decentralized finance while benefiting SBF's personal finances.

The nominal legal work of politicians should serve the public's greatest interest, but they have failed to do so. SBF legally bribed them to push legislation that would benefit his business, not everyone else, just like what is happening now in the field of artificial intelligence. If it weren't for those "good Samaritans" online, SBF would have succeeded.

Journalists' Malfeasance

Secondly, remember that SBF was a darling of the mainstream media. Corporate journalists like The New York Times' David Yaffe-Bellany tirelessly endorsed him before, during, and after SBF's shocking fraud came to public attention. In fact, after millions learned that SBF had stolen billions of dollars, The New York Times not only gave him a platform but even applauded him.

The contrast with other crypto reporting couldn't be more stark. For years, the media conveyed the message that Bitcoin was a fraud, but SBF was a friend. He funneled stolen money to NGOs and media outlets like Semafor and ProPublica, and in return, they crowned him "the JPMorgan of crypto."

So, the journalists who should have informed the public completely failed. SBF said things people wanted to hear, crafted an image for himself, and ensured that journalists believed he was one of their ideological allies. Thus, they wrote numerous endorsement articles about him and would continue to do so ------ if it weren't for those "good Samaritans" online.

Regulators' Inaction

Also, remember that regulators failed. SEC acting chair Gary Gensler privately met with SBF, knowing he only meets with very few people, while publicly attacking countless other projects that have since lost in court. The meeting mentioned "conditional no-action relief," which in regulatory terms means "we won't enforce against FTX."

So, regulators, who should nominally exclude problematic bad projects through good projects, failed to do so. Instead, they spent time meeting with SBF while attacking Bitcoin ETFs. Why? Perhaps because SBF pushed for more regulatory power and bribed right-wing politicians. So regulators gave him some special perks, like private meetings, while Congress tilted cryptocurrency regulation toward SBF's preferences ------ if it weren't for those "good Samaritans" online, he would have escaped punishment.

How Did the Internet Do It?

So what did those "good Samaritans" online do? They messed up the case.

First, cryptocurrency investor Nick Tomaino tweeted that FTX was under suspicion for both trading activities and policy advocacy. Next, Erik Voorhees confronted SBF politely on the Bankless crypto podcast. Ultimately, the cryptocurrency website Coindesk published Ian Allison's article exposing the fraud.

Again, none of this was driven by traditional media, politicians, regulators, or police ------ which is why even The Washington Post admitted that citizen journalists "performed better than traditional media in reporting the FTX implosion."

Satoshi and SBF

After Coindesk's revelations, events unfolded rapidly. Binance CEO Changpeng Zhao sold his shares, and SBF claimed his assets were sound, but the community immediately tested his claims. And this is decentralized "fact-checking," which ultimately led to his downfall. Thanks to Satoshi's invention, SBF could no longer commit fraud by creating fake funds on his central server, as he had done for his trading company. Once millions discovered they couldn't transfer funds to a decentralized blockchain, the illusion would collapse, and his exchange would fail.

This cannot be emphasized enough: not a single seasoned journalist, politician, regulator, or police officer caught SBF's fraud; only the blockchain "caught" him. Until the end, SBF was still saying "FTX is operating well, and the assets are fine." But because of the decentralization represented by the blockchain, millions of people worldwide were able to independently fact-check him by testing their withdrawal capabilities and viewing the results on-chain. SBF could deceive a systemically failing nation, but he met his match in the decentralized network. He couldn't fulfill withdrawals because he couldn't create money.

In short: the internet succeeded where the government failed. It was crypto-related Twitter that raised tough questions, reported real citizen journalism, found clear and irrefutable evidence in the form of insufficient on-chain balances, and published that evidence online. It was the television networks that reached a firm decentralized consensus that he had no money, even though during this time his supporters continued to portray SBF as a "billionaire." From then on, all the police did was a slow and reluctant cleanup.

The Criminal Justice System Succeeded, but Remember It Failed Once Before

As mentioned earlier, by November 11, 2022, the internet had evidence that SBF was a notorious criminal when FTX paused withdrawals, and its BTC on-chain balance dropped from 20,000 to 1. During this time, SBF and his supporters continuously lied to the public, claiming he had sufficient funds, but the reason he couldn't withdraw was that he couldn't lie to the Bitcoin blockchain.

Millions of witnesses could independently verify that SBF had stolen their money by monitoring Bitcoin and Ethereum. Like Batman, internet volunteers tied SBF up with irrefutable evidence pinned to his chest and handed him over to the police.

Then, nothing happened afterward. For several weeks, SBF was doing a Good Morning America tour. The New York Times' Yaffe-Bellany even endorsed him and reported on him. This shocked even other reporters at the time. He stated his views on Dealbook and received enthusiastic applause. The chair of the House Financial Services Committee "welcomed" him to testify in Congress, a privilege (to say the least) that typically does not lead to job-related prosecutions. In the following weeks, he was free to roam, tweet, and otherwise amplify this uncertainty.

Why?

We need to delve into this because a core lie circulating online now is that the state is, of course, completely trustworthy, and only paranoid lunatics would think there were internal conflicts regarding the arrest of SBF during this time. To address this, we need to first discuss (a) trust in the police, then (b) the timeline of the arrests, and finally (c) the tensions within the party.

Dismantle the Police First, Then Trust the Police

The first question is: should we simply assume everything will be fine? No, remember that Democrats spent most of 2020 loudly calling to dismantle the police. Then, with the emergence of SBF, their attitude suddenly shifted to "I can't believe you don't trust the police!"

But we don't trust the police. The occurrence of the SBF incident was not an accident. In the once-admired legal system in the U.S., faith has been taken for granted.

After all, thanks to Soros prosecutors, crime is effectively legal in major cities in the U.S. Hard drugs are openly sold.

Supermarkets and trains are robbed in broad daylight. Windows are smashed, and everything is stolen. During BLM protests, rioters block roads and surround pedestrians. And the police do nothing.

Meanwhile, as prosecutions for actual crimes gradually decrease, prosecutions for political crimes are on the rise. Republican Douglas Mackey was imprisoned for a joke on Twitter for almost as long as Democrat Colinford Mattis was imprisoned for attacking police cars with Molotov cocktails. We are in an era of public trials, where "Russiagate" allegations are slowly being recognized as false, while Hunter Biden's allegations are gradually being acknowledged as true ------ but only after the elections are over, these allegations will become unimportant.

None of this is justice. So, we don't trust the police. After immense public pressure from the international community on an obvious fraudster who stole $10 billion in broad daylight, the criminal justice system finally limped back on track, which is not something to brag about.

Delay in Justice is a Refusal of Justice

Now, moving on to the second point: could SBF have been arrested earlier? Because in the weeks following when millions could publicly prove he stole their money, SBF was invited to speak at a New York Times conference and testify in the U.S. Congress, which usually raises doubts about whether justice will be served.

Countless defenders of the state on Twitter claim this was just the fastest way, and the civilian populace simply doesn't understand legal procedures. In response to this, we only present three points.

1. Alexey Pertsev was jailed without charges just days later

First, a true freedom fighter like Tornado Cash founder Pertsev was arrested just two days after OFAC made a controversial new interpretation of existing law. He was arrested for writing code, but no charges were implemented (held without charge). This swift action is not an isolated case. In 2020, the FBI rushed to NASCAR within 24 hours to investigate a fake lasso. In 2012, Nakoula Basseley Nakoula was taken away within 48 hours after Hillary Clinton condemned him for making a movie.

So we know that as long as the state is willing, it can act swiftly.

2. A prosecutor from the same office suggested filing criminal charges first to quickly gain Republican support ------ so why couldn't they do the same for SBF?

Secondly, couldn't the prosecutors really file a criminal "complaint" to quickly detain SBF, and then they would get a full indictment from the grand jury? This was precisely the strategy suggested by a former prosecutor from the same office that prosecuted SBF when they wanted to indict Republicans: use a criminal complaint to swiftly arrest.

In contrast, when prosecutors need to make quick arrests, they often use criminal complaints. For example, this may happen when federal agents learn that a crime is about to occur or has just occurred and must act immediately. In such cases, prosecutors don't have time to go through the grand jury process; instead, they submit a written document called a criminal complaint, along with an affidavit signed by an agent familiar with the case. A judge or magistrate will review the complaint and affidavit, and if he or she finds probable cause, will issue an arrest warrant. Once an arrest is made under a criminal complaint, federal law requires the defendant to be charged within 30 days (or by criminal information if it is a misdemeanor case or the defendant agrees to waive prosecution).

I mean, while I'm not a lawyer, this makes sense. Can we imagine that in every such case, the government deliberately tied its own hands for several weeks inaction? Or that in other job-related cases, whenever they want, like when they caught Trump, they can act swiftly?

3. The state can indefinitely detain millions of innocent people but can't legally arrest SBF?

Do we really believe that the government can fabricate reasons to surveil you without a warrant or seize your assets without charges, but can't detain SBF pre-trial? I mean, are you telling me that a state that can detain hundreds of millions of people can't swiftly bring SBF to justice?

In reality, as long as the U.S. government is willing, it can violate any law, just as it often uses civil forfeiture, unauthorized surveillance, undeclared wars, and unconventional extradition. Similarly, when it wants to move slowly, it can also claim to be bound by regulations.

And it indeed progressed slowly; in fact, from November 11, 2022 (when SBF had clearly stolen billions from customers) to December 12, 2022 (when SBF was finally arrested), it took a full month, during which so many institutions (like Congress and The New York Times) were scrambling to support SBF, which understandably raised public suspicion.

And to paraphrase an old saying, "Caesar is beyond doubt."

Partisan Shame

Thus, we have established: (a) there are ample reasons not to trust the police, (b) there are ample reasons to question the slow pace of prosecution. However, why did the prosecution actually continue?

Explanation 1: Standard Operating Procedure

You can believe the Twitter users who mindlessly shifted from dismantling the police to trusting the police. Their story is that the weeks of SBF's free roaming were just a yawn, always that way. After all, we don't know that "filing a case" takes months (even though Twitter started "filing" from Coindesk's article), and the authorities are acting at "light speed" (even though Pertsev was jailed without charges within days), and The New York Times can certainly provide a platform for a (verifiably fraudulent) scammer (even though this organization has been advocating for de-platforming for years).

If you believe this, you might also believe that "Russiagate" is real (until it was acknowledged as false), inflation is fake (until it was acknowledged as real), and Kyle Rittenhouse is guilty (until he was found innocent).

In other words, if you think it's completely normal for a freedom fighter to be jailed without charges immediately while a known fraudster can roam free and then be released on bail even in a situation where The New York Times finds issues, then you are part of BlueAnon. Blue Anon is a small segment of the world that follows the Democratic Party line in the U.S., just as a previous generation followed the Soviet Communist Party line.

Nothing we say will get through to you.

Explanation 2: Internal Civil War within the Democrats

But for the rest of the world ------ Republicans, independents, Bitcoiners, Ethereum supporters, Indians, Chinese, and all those deceived by Samuel SBF ------ there is a more succinct hypothesis: this is a quiet civil war within the Democratic Party.

Because on November 15, 2022, reports emerged that senior members within the party were closely monitoring the case:

SBF's fate is being closely watched by the highest echelons of the Democratic Party, including some senior elected officials who are curious about what SBF's downfall means for the Democrats and their funding sources. After all, it is widely believed that SBF is not only a once-in-a-century party donor like George Soros but also a unique political force willing to push boundaries and take costly risks. Of course, this is terrifying for the left, as the legal consequences that Democratic organizations and the betrayed SBF aides might face if bankruptcy courts, class-action lawsuits, or prosecutors attempt to recover this money are also significant. Anxiety levels are rising.

If you read all the contemporary articles from the media, you will see a picture of a civil war within the Democratic Party triggered by the SBF scandal, with those whose careers would be negatively impacted if SBF were prosecuted (like David Yaffe-Bellany and Maxine Waters) and those whose careers would positively develop (like the prosecutors who ultimately brought him to justice) in conflict. One reporter covering SBF even admitted that someone texted saying they "regretted his loss."

This shouldn't be too unbelievable, as we are currently in another civil war within the Democratic Party between supporters of Israel and Palestine. A few years ago, there was another civil war between Biden and Bernie supporters. The splits over SBF do not align perfectly with other splits, but they roughly coincide: institutionalists want to control crypto and thus befriend SBF, while the left wants to destroy crypto and thus distrust SBF.

These factions were roughly balanced before the fraud was revealed, but once he became harmful, the left seized the opportunity to oust those supporting SBF. Indeed, as David Morris observed at the time, some tried to shape SBF into a tragic figure, but ultimately ------ despite his many "good deeds" in helping party members get elected with stolen funds ------ SBF became a very awkward topic, and the party could no longer protect him.

Once again, if you read all the stories about the "SBF pandemic," "SBF collapse radius," and "SBF legal meteor," you will find that all those funded by stolen money seemed to take weeks to synchronize and figure out what happened ------ largely to prevent the possibility of recovering funds. But ultimately, the anti-SBF faction prevailed. He became an embarrassment for the Democrats and thus had to go.

What Have We Learned?

Crypto-related content on Twitter thoroughly lifted the veil on this case, first exposing SBF, bringing immense accountability to the Democrats, and ultimately forcing the regime to take action against their second-largest donor.

Contemporary reporting acknowledged that in this case, citizen journalism outperformed traditional media, and in fact, The New York Times and Congress seemed to be involved in covering up the crime.

We learned that regulators cannot distinguish between good projects and bad projects; they did not consider taking any action against SBF, nor did they take any action to approve Bitcoin ETFs.

We also learned that before SBF used stolen funds to manipulate national elections, not a single traditional journalist, politician, regulator, or police officer noticed him, and those elections will never be undone. Investors who put money into FTX lost everything, but the politicians who took money from FTX managed to keep their jobs.

I understand why people still think "the system does something," after all, in a time when the police have been dismantled for years, crime has run rampant in Republican-led cities for years, and law enforcement has been completely politicized, seeing a case that seems to yield the right result is indeed surprising.

But we must remain vigilant. We are in this situation because the internet can do something, while the government does nothing. Not a single traditional journalist, politician, regulator, or police officer discovered that SBF was a criminal, but the internet did.