Jim Chanos slams Michael Lewis on Twitter for parroting language

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Jim Chanos slams Michael Lewis on Twitter for parroting language

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

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

Among the criticisms was short seller Jim Chanos, founder of Kynikos Associates, who has a long and storied history of betting against renowned financial frauds such as Enron and Bankrupt German payments giant Wirecard.

Chanos called Lewis' parroting language a Bankruptcies, saying the fall of FTX was caused by a bank run.

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

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

While FTX's fate was partly secured by a $6bn run from customer deposits, a presentation filed in March as part of the bankruptcy court process showed Bankman-Fried's former empire had a massive $6.8bn hole in the balance sheets of its associated companies.

To be certain, 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 faces charges including 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 has been criticized for defending the erstwhile crypto wunderkind.

Some, including Chanos, pointed out that the company was not just illiquid, but insolvent.

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