Short Seller Jim Chanos Says Michael Lewis's Defence Of FTX Bankruptcy Is ''Nonsense''

Short Seller Jim Chanos Says Michael Lewis’s Defence Of FTX Bankruptcy Is ”Nonsense”

Updated: 03 October 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Join Our Telegram channel to stay up to date on breaking news coverage

Legendary short seller Jim Chanos slammed author Michael Lewis for saying that FTX would still be around if it hadn’t been for a bank-like run on the bankrupt crypto exchange.

“This was literally Enron’s defense: ‘If it wasn’t for those meddling short-sellers and journalists causing a run on-the-bank, we would’ve been fine,’” tweeted Chanos, the founder of Kynikos Associates who is renowned for predicting the collapse of Enron in 2001. “This is nonsense, as both FTX and Enron were both massively insolvent, not illiquid.”

Lewis Book On Sam Bankman-Fried Released Today

During an interview with CBS’s 60 Minutes on Sunday, Lewis spoke widely about former FTX founder Sam Bankman-Fried and his life leading up to the collapse of FTX.

The discussion was timed to coincide with the publication of Lewis’s book on Bankman-Fried, ”Going Infinite: The Rise and Fall of a New Tycoon,” that’s scheduled for publication today.

Lewis defended FTX, saying it wasn’t a Ponzi scheme and that 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.”

This was literally Enron’s defense. “If it wasn’t for those meddling short-sellers and journalists causing a run-on-the-bank, we would’ve been fine.” This is nonsense, as both FTX and Enron were both massively insolvent, not illiquid. https://t.co/3nrJqUrYCg

— Diogenes (@WallStCynic) October 2, 2023

Chanos got a lot of support from the crypto community for his post with The Block’s founder Mike Dudas calling Lewis’s statements “insane,” and Ryan Selkis of Messari saying that the interview had angered him.

After FTX and its group of companies filed for bankruptcy protection in November after a dramatic and unexpected unraveling, Bankman-Fried initially blamed the demise of his crypto empire on a run on customer deposits.

A March presentation submitted as part of the bankruptcy court process revealed Bankman-Fried’s empire had a $6.8 billion hole in the balance sheets of its affiliated businesses.

Lewis On Bankman-Fried, FTX

Lewis seemed convinced that FTX was not a fraud and during the interview painted Bankman-Fried in a sympathetic light. He said that despite being the richest person in the world under 30, Bankman-Fried “didn’t care much about like, spending it [his money] all on yachts, he was gonna spend it to save humanity from extinction kind of thing.”

According to Lewis, Bankman-Fried is an unfortunate Robin Hood who fell victim to FTX’s multibillion-dollar bankruptcy last year.

This quote from Michael Lewis in the 60 Minutes interview is shockingly naive about SBF's business and makes me wonder if Lewis was too close to his subject. pic.twitter.com/1LrorjS3EQ

— John Reeves (@reevesjw) October 2, 2023

Lewis added that the book is “sort of a letter to the jury” and said the prosecution and said, ”There is still a Sam-Bankman-Fried-shaped hole in the world that now needs filling.”

Bankman-Fried faces seven charges at his trial that begins today, including wire fraud, securities fraud, conspiracy, and money laundering. The former CEO has pleaded not guilty to all charges and will be facing criminal trial on October 4 after a jury selection today.

Smog (SMOG) - Meme Coin With Rewards

Rating