FTX Founder Sam Bankman-Fried manipulated ESG and woke culture to help his now-bankrupt crypto firm avoid scrutiny from regulators and gain credibility with investors, a venture capitalist told Fox News.
ESG â environmental, social and governance â is a framework that investors use to score businesses on factors like the diversity of employees, how much pollution the firm creates or how many members sit on the board. Sam Bankman-Fried claimed that FTX would be carbon neutral by the end of the year and said the firm would help build solar projects for communities in the Amazon, all before his company filed for bankruptcy earlier this month.
“So in this case, SBF, who was running FTX, he 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,” Joe Lonsdale, a venture capitalist and Palantir co-founder, told Fox News.
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“But in practice, what happens like anything else is ESG is a form of power, and the power becomes captured politically and used towards different ends,” Lonsdale continued. “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.”
FTX, a cryptocurrency exchange founded by Bankman-Fried and headquartered in the Bahamas, filed for Chapter 11 bankruptcy at the beginning of November after allegedly mishandling billions of dollars of customer funds. Bankman-Fried told a Vox reporter “ESG is perverted beyond recognition” and admitted to talking about the importance of ethics without following them himself.
“It’s what reputations are made of,” the FTX founder wrote. “This dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.”
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Lonsdale said he agrees with Bankman-Fried that ESG is perverted.
“He knew how all these woke people think, and he knew how to manipulate them,” the Palantir co-founder said. “And he obviously has admitted it, he was manipulating people to try to get ahead.”
FTX scored higher on “leadership and governance” than ExxonMobil despite only having three board members compared to the energy giant’s 11 board members, according to an ESG score from Truvalue Labs. John Ray III, FTX’s new CEO overseeing the bankruptcy proceedings, said he had never “seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
Longsdale told Fox News: “The whole framework of ESG becomes sort of a joke once it gets captured and distorted in these ways.”
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He said that even though FTX had “terrible governance” and was “basically a Ponzi scheme,” it was “rated more highly than companies running our energy sector because the energy sector is disfavored with Democrats and disfavored with the Left.”
“I think ESG itself needs to be checked,” Lonsdale added. “There should be multiple frameworks.”
To watch Lonsdale’s full interview on FTX and ESG, click here.
Source: https://finance.yahoo.com/news/ftx-founder-manipulated-esg-earn-170018552.html