The main cause of the bubble and subsequent bankruptcy of FTX is to be found in the woke culture and the perversion of ESG - Environmental, Social and Governance" derived from it. Jon Lonsdale, a venture capitalist and co-founder of Palantir, was that blunt. The investor charged that the company's former CEO Sam Bankman-Fried's donations to the Democratic Party and investments in issues of interest to the Democratic Party gave it a"virtue-signaling glow" that blinded regulators.
"How did a Ponzi company in the Bahamas with no board and metaverse auditors get a good ESG score?" wondered Lonsdale during an interview with Fox. He, for his part, has a very clear answer: "Because ESG is a scam, designed to reward the woke moral preening to crush the industries that the left hates, and to make people afraid to speak out against leftist institutions & leaders."
How did a Ponzi company in the Bahamas with no board and "metaverse auditors" get a good ESG score?
Because ESG is a scam, designed to reward woke moral preening, to crush industries the left hates, and to make people afraid to speak out against leftist institutions & leaders. pic.twitter.com/gR6PkTPw4w
— Joe Lonsdale (@JTLonsdale) November 29, 2022
"ESG is a scam"
Lonsdale explained that "Sam Bankman-Fried, who was running FTX, knew that if he virtue-signaled, if he gave lots of money to causes Democrats cared about, if he became the big donor on the left, became the darling of the media companies to which you donated, he would kind of get this warm virtue-signaling glow." Something that, the analyst charges, is not unique to this case: "And so a huge part of our corporate world, a huge part of the Fortune 500, is virtue-signaling to try to get free resources, to try to get basically rewarded based on the fact that a lot of institutions are now captured by these ESG frameworks."
Far from being a value judgment by Lonsdale, Bank-Fried himself acknowledged in a private message interview on Twitter to Vox reporter Kelsey Piper that this was his mode of operation, "ESG is perverted beyond recognition." The former FTX CEO also acknowledged that he talked about ethics without following them. "It's what reputations are made of. This dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us."
Talking about or actually doing right or wrong
After the conversation was made public, SBF himself posted on the same network some clarifications, highlighting the difference between "doing *actually* good or bad, not just *talking* about doing good or *using ESG language*."
31) And in the future, I'm going to care less about the dumb, contentless, "good actor" framework.
What matters is what you do--is *actually* doing good or bad, not just *talking* about doing good or *using ESG language*.
— SBF (@SBF_FTX) November 16, 2022
"Complete failure of corporate controls."
To exemplify, Lonsdale compares FTX's score and that of energy giant ExxonMobil according to the True values index for "leadership and governance" in which the crypto company ranked above. Early analyses by John Ray III, FTX's new CEO in charge of overseeing the bankruptcy proceedings, have shown this to be utterly fallacious. Ray III stressed that he "had never "seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information."
Bankman-Fried, far from hiding, continues to participate in talks and conventions from the Bahamas. The day before this news was published, the FTX founder participated online in Dealbook Summit where he was asked if he had lied to favor FTX, to which he responded, "Do I believe, do I agree that I lied? I don’t know of times when I lied, I think, look, there are certainly times when I was acting as a, um, as a representative, as a marketer for FTX."