Forbes draws criticism from Ripple CTO and crypto KOLs over 'nonsense' SBF defense

Ripple’s Chief Technology Officer David Schwartz has pushed back against a Forbes article defending Sam Bankman-Fried, calling the argument “nonsense.”  The article called the convicted FTX founder a sufficiently villainized innovator who had sought to lead the larger effort to codify crypto regulation. 

One of the arguments of the Forbes article was the reclassification of the native FTT token of FTX. The article asserted that FTT was not like a stablecoin but closer to equity since holders can access a share in FTX’s revenues. It claimed that customers were not depositing money but investing speculatively in SBF himself.

Schwartz protested this assumption. He stated that laying out the fraud as speculation neglects the main issue, which is the uncertainty of whether client money was misappropriated without their consent. The Ripple executive stressed that re-purposing assets on the books, as customers without disclosing what happens to a token, is an affront to fundamental legal and ethical foundations.

The Forbes article went on to project that without the ill-advised and now illegal financial actions by Bankman-Fried, FTX would not have gained investor confidence to start with. Schwartz opposed this by stating that confidence based on unauthorized fund transfers cannot change it to legitimacy.

Misplaced heroism and the question of accountability

The article portrayed SBF as a progressive individual who enjoys respect because of lobbying in Washington. It attributed his influence to laws like the GENIUS and CLARITY Acts, the latter of which it considered an indication of him looking to legitimize crypto.

It also speculated on whether President Donald Trump could pardon SBF because of his visionary impulse.

“Which brings us to GENIUS, CLARITY, and other Acts meant to create a stable regulatory environment for the cryptocurrency present and future. The latter precisely explains why SBF was spending so much time in Washington.”

~ Forbes

Forbes went further and placed SBF’s conviction into the context of a necessary market correction as opposed to a careful brush against US laws. It also asked whether he was really committing crimes or if he was just taking welcome business chances that went wrong.

However, Schwartz maintained that innovation should work within the laws and that failure should not be equated with fraud; otherwise, it would lower the whole industry’s reputation.

Industry observers strongly reject Forbes’ narrative

Coin Center’s Neeraj Agrawal shared the article on X, prompting immediate backlash and comments asking for clarification about why the Forbes article de-emphasized the gravity of SBF’s actions, and presenting his regulatory goals as if it did not have any consequences.

The article elicited immediate counteraction from the crypto community. According to the editor of The Block, Tim Copeland, it was so “absurd” that he had to deconstruct it point by point. Ethereum builder 0xTimmy wrote, “Does Forbes just let anyone publish an article?” 

Some people questioned the authenticity of the article and its release. Bitcoin advocate Rich Lassiter wrote, “Definitely not. Who was the reporter paid off to write this drivel?” 

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