David Schwartz, the technology head at Ripple, has publicly disagreed with a Forbes piece that offered a defense of Sam Bankman-Fried, the disgraced founder of FTX. Schwartz dismissed the article’s arguments as “nonsense.” The Forbes article portrayed Bankman-Fried, who was convicted of fraud, as a misunderstood visionary whose intentions were to shape cryptocurrency regulation.
The Forbes article centered part of its defense on re-evaluating FTX’s proprietary token, FTT. It argued that FTT wasn’t like a stablecoin but more akin to company stock, offering holders a portion of FTX’s earnings. According to the piece, users weren’t depositing funds but instead gambling on Bankman-Fried himself.
Schwartz challenged this viewpoint. He argued that framing the fraud as mere speculation overlooks the core issue: the unauthorized use of customer funds. The Ripple executive emphasized that secretly repurposing client assets without informing them of how their tokens are managed is a violation of fundamental legal and ethical norms.
The Forbes article further suggested that without Bankman-Fried’s now-illegal actions, FTX wouldn’t have secured the investor confidence needed to launch. Schwartz countered, stating that confidence gained from unauthorized fund transfers can never be considered legitimate.
Heroic Portrayal and the Core Question of Accountability
The Forbes article presented Bankman-Fried as a forward-thinking figure respected for his lobbying activities in Washington. The piece attributed laws like the GENIUS and CLARITY Acts to his influence, viewing the latter as evidence of his aim to legitimize the crypto space.
It even speculated about a potential pardon from President Donald Trump, citing Bankman-Fried’s perceived visionary drive.
“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 so far as to frame Bankman-Fried’s conviction as a necessary market correction, rather than a clear violation of US laws. It questioned whether he was truly committing crimes or merely taking risky business gambles that backfired.
Schwartz countered that innovation must operate within legal boundaries and that failure should not be confused with fraud. To do so, he suggested, would damage the entire industry’s reputation.
Industry Reacts Negatively to Forbes’ Narrative
Neeraj Agrawal of Coin Center shared the Forbes article on X, sparking immediate criticism. Commenters questioned why the article minimized the severity of Bankman-Fried’s actions and portrayed his regulatory efforts as consequence-free.
The article was met with immediate opposition from the cryptocurrency community. Tim Copeland, editor of The Block, called it “absurd” and said it required a point-by-point refutation. Ethereum builder 0xTimmy quipped, “Does Forbes just let anyone publish an article?”
Some questioned the article’s legitimacy and its timing. Bitcoin advocate Rich Lassiter asked, “Who was the reporter paid off to write this drivel?”
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