7 Signs of FTX Scam
Just 2 months ago FTX seemed like the crypto exchange platform of the future while FTX founder Sam Bankman-Fried was lauded as a billionaire genius that was going to make the world better. All it took was an article piece from their competitor Coinbase, and the whole thing fell apart like a rackety house of cards. The FTX scam was exposed for what it was and SBF got arrested on the 12th of December 2022. However, It’s easy to see that the emperor is naked, once the jig is up.
Many people declare how red flags had been obvious all along and that investors should have known better. This line of thinking is unproductive and it distracts from the core problem. Like with many scam cases you can’t simply put the blame on the gullibility of victims.
Pageantry and Shameless Self-promotion of FTX Scam
Most scams, especially Ponzi schemes, employ a special line of advertising. They use glitzy and dazzling videos of how successful and rich the fraudulent promoters are. This is done to make their targets believe that if they invest in the scheme, they will become equally rich. The scam is always a life-changing new platform that will revolutionize the world. Additionally, the promoters are shown as charismatic, energetic, and unorthodox thinkers.
Does this ring a bell? The FTX founder Sam Bankman-Fried invested a lot in building his public persona. He gave hefty sums of money to large media outlets, which naturally incentivized them to publish positive articles about him. He was dubbed the “most generous” billionaire and there was a sleuth of content which depicted him as a financial rising star that would change the world with his line of effective altruism.
All of this was a typical shameless Ponzi-promoter self-aggrandizing, but it’s just that SBF had much more money to buy ad time and space on prominent platforms.
Shills to FTX Scheme
Many scams pay influencers and bots to promote their money-grabbing schemes. FTX group did the very same thing but with style. The FTX scam had coffers big enough to hire big-name celebrities to endorse their company. Nevertheless, some say the targets should have known not to listen to the financial advice of sports players or Hollywood stars. This would be a salient point if the FTX promotional reach had ended there.
SBF hired YouTube influencers with large traffic and audience to actively promote their CEX. These YouTubers had large channels dedicated to crypto trading, news of crypto markets, and general financial affairs. When these internet personas advertised FTX, their audience was inclined to believe them. This promotion gave the whole thing additional legitimacy. These influencers greedily received hefty sums to promote the FTX scam without verifying the CEX and this way they inadvertently served as shills. Still, the SBF’s influence doesn’t stop there.
For whatever reasons, prominent entrepreneurs like Kevin O’Leary and Bill Ackman fully supported the FTX scam, and they continuously praised Sam Bankman-Fried. People believed them and as a result, they invested in the highly problematic company.
Con artists require the services of shills, people who participate in social engineering willingly or otherwise, by praising or advertising the scam in order to dupe people to provide their money. The FTX group utilized such services. Since SBF already had vast fortunes they could hire famous and influential media stars and influencers which in turn attracted a huge number of crypto investors.
