Jim Chanos slams Michael Lewis for parroting language, accuses FTX founder of bank run

Jim Chanos slams Michael Lewis for parroting language, accuses FTX founder of bank run

Jim Chanos, on Twitter, slammed Lewis for parroting language and accused the fall of FTX to a bank run.

On October 1st, author Michael Lewis faced criticism on social media after an interview with '60 Minutes' about FTX founder Sam Bankman-Fried that was widely decried as unjustifiably credulous.

Short seller Jim Chanos, the founder of Kynikos Associates, had a long and storied history, betting against famous financial frauds, such as Enron and Bankrupt German payments giant Wirecard.

In a post on X, Chanos slammed Lewis for parroting language, attributing the fall of FTX to a bank run.

tfor those meddling short-sellers and journalists causing a run-on-the-bank, we would've been fine. This is nonsense, as both FTX and Enron were both massively insolvent, not illiquid, said Chanos, who has long been associated with the @WallStCynic handle on X.

Shortly after the group of companies filed for bankruptcy protection in November, Bankman-Fried blamed the collapse of his crypto empire on a run on customer deposits.

While FTX's fate was partly sealable by a $6bn run from customers, a presentation filed in March revealed Bankman-Fried's former empire had a massive $6.8bn hole in the balance sheets of its associated companies.

The appreciation in cryptocurrency prices this year has boosted the value of some of these assets, according to court filings made by the company's attorney.

Bankman-Fried will appear in court next month on charges of wire fraud, securities fraud and money laundering.

CBS's '60 Minutes' aired an interview with Lewis, author of bestselling books like s Poker, and on October 1 where Lewis shared tidbits from his book about FTX and Bankman-Fried. The author was accused of defending the erstwhile crypto wunderkind.

Some, such as Chanos, pointed out that the firm was not just illiquid, but insolvent.

The difference between an illiquid and insolvent is that an illiquid firm has high-quality assets that it can either sell or use as collateral for loans, while an insolvent firm does not.