There’s a lot to unpack with the Sam Bankman-Fried FTX fraud. Over the previous few weeks, the groundwork has been laid for what’s going to in the end make a compelling Netflix drama in regards to the now-disgraced, “King of Crypto”. Nevertheless, the dramedy that’s SBF would solely be humorous if there weren’t thousands and thousands of customers who have been defrauded for what some estimate as a lot as £10 billion {dollars}.
The fraud allegations (haha @ allegations) of misuse of buyer funds solely scratch the floor of the most important monetary Ponzi since Bernie Madoff. This who-done-it entails movie star endorsements, model promoting at a large scale, Bahamian actual property in his dad or mum’s title, SEC collusion, media contributions, and big political donations.
How might anybody assume that FTX was an entire fraud? They’d their emblem on the uniforms of MLB umpires and the Miami Warmth enviornment. They’d ringing endorsements from Kevin O’Leary, Tom Brady, Larry David, and Matt Damon. SBF appeared in entrance of congress in December 2021 (prime of the market) because the crypto-Jesus who was going to guide us to salvation in a utopian monetary system. A minimum of Maxin Waters purchased it.
SBF has been lauded because the “world’s most beneficiant billionaire”. He’s appeared on CNBC to put out his plans for crypto supremacy regardless of shaking like an Adderal addict.
That is Sam Bankman-Fried on Meet the Press a couple of months in the past… #SBF_FTX
Normally, folks don’t shake so onerous the chair strikes … 🚨 🚨 🚨 pic.twitter.com/tWADyi53Hr
— Wall Avenue Silver (@WallStreetSilv) November 15, 2022
Jim Cramer even went so far as calling Sam and FTX the “JP Morgan of this technology”. Good name.
FTX’s valuation has gone from £35B to £1.00 since pic.twitter.com/JQaLFmzRhh
— Inverse Cramer ETF (Not Jim Cramer) (@CramerTracker) November 9, 2022
The FTX Injustice
In Could 2020, George Floyd was murdered by Minneapolis Law enforcement officials over an alleged counterfeit £20. Twenty {dollars}.
SBF is at present doing a media tour and receiving standing ovations by New York Instances stans regardless of “allegedly” stealing £10 BILLION DOLLARS.
Even the laziest web sleuth can see that SBF donated thousands and thousands (£40 million to be precise) to Democratic candidates. He claims he donated the identical quantity to Republicans, however conveniently these have been made by way of untraceable darkish swimming pools. If you happen to can imagine that.
These donations, and former Washington suck-up fests, have apparently purchased SBF loads of goodwill throughout the halls of congress and the justice system. Whereas Gary Gensler was attempting to catch headlines by going after Kim Kardashian’s NFT initiatives, and Ripple, the SEC had no downside with FTX issuing unregistered securities within the type of the FTT Token.
How do the US Justice system and regulators have any credibility left?
Why did FTX Fail?
FTX managed a lot of the ineffective FTT tokens which reached a one-time valuation of £9 billion {dollars}. They claimed these tokens have been liquid and included them of their liquidity buffer at market worth. However this isn’t the explanation.
The reason being easy. Regardless of SBF blabbering on about not realizing, not having all the information, and margin accounts in Twitter Areas and different interviews, that is an outdated rip-off. It’s the identical rip-off Charles Ponzi ran when he was promoting buyers on the thought of the appreciating worth of uncommon stamps (which have been nugatory).
Additionally, this isn’t a “crypto rip-off”. It annoys me when folks say this. There’s a LOT of fine being executed in cryptographic know-how and within the crypto trade to make monetary transactions accessible to your entire world and harness the know-how for good. Nothing about what SBF did was for good regardless of his pie-hole spewing lies about philanthropy. He not solely harmed his prospects however the actual innovators who will discover it onerous to get capital due to his fraud.
Regardless of all Sam’s Ididntknowisms about FTX, the rip-off was easy. Clients deposited their funds with FTX, thought they have been safe and to not be touched in keeping with the phrases of service, after which SBF funneled all these funds to the buying and selling arm of FTX, Alameda Analysis, the place his incompetent girlfriend gambled it away shopping for shit cash that plummeted in worth.
Coinbase CEO, Brian Armstrong, put it much more succinctly:
It is stolen buyer cash utilized in his hedge fund, plain and easy.
— Brian Armstrong (@brian_armstrong) December 3, 2022
Don’t let the lies SBF is spewing about account errors, poor document maintaining, and Tweets from Binance CEO CZ as the explanations for the failure of FTX. Nope, these causes aren’t shut. The Bahamian Rhapsody gang stole buyer funds and purchased actual property and shit cash, till there was nothing left for those self same prospects.
Will Sam Bankman-Fried go to Jail?
In an unbiased, uncorrupt world, the reply is a powerful, sure. However the place do you assume we’re?
Sam’s mommy and daddy are well-connected compliance attorneys and Stanford professors. Along with that his political donations and foresight to arrange FTX off-shore makes issues just a little extra difficult.
Nonetheless, kiss-blowing Rep. Maxine Waters has kindly invited SBF to testify earlier than the congressional Monetary Providers Committee. Regardless of stories that she gained’t transfer ahead with a subpoena, which she pushed again on, she says a subpoena is “nonetheless on the desk”. Mmmhmm.
.@SBF_FTX, we respect that you’ve got been candid in your discussions about what occurred at #FTX. Your willingness to speak to the general public will assist the corporate’s prospects, buyers, and others. To that finish, we’d welcome your participation in our listening to on the thirteenth.
— Maxine Waters (@RepMaxineWaters) December 2, 2022
Lies are circulating @CNBC that I’m not keen to subpoena @SBF_FTX. He has been requested to testify on the December thirteenth listening to. A subpoena is certainly on the desk. Keep tuned.
— Maxine Waters (@RepMaxineWaters) December 8, 2022
It’s been nice how candid Sam has been about his fraud. Fortunately there are some Senators who cope with actuality, who’re anticipated to subpoena Bankman-Fraud to elucidate WTF occurred.
Glad @SBF_FTX will seem on 12/13, however @SenSherrodBrown & I additionally count on you at @SenateBanking/@BankingGOP the following day.https://t.co/azJla1ejUC
— Senator Pat Toomey (@SenToomey) December 9, 2022
Defenders of SBF
Sam Bankman-Fried dedicated fraud, as he so shakingly admitted, after being pressed by the ever-grandstanding, Coffeezilla. Right here it’s:
The EXACT second SBF admitted to fraud. a 🧵👇
— Coffeezilla (@coffeebreak_YT) December 8, 2022
Regardless of this admission, SBF nonetheless has a clown automotive crammed with defenders. First, there was billionaire hedge-fund supervisor, Invoice Ackman. I imply how does one turn into a billionaire with out screwing somebody over within the course of? SBF is certainly telling the reality that he dedicated fraud. I agree!
Name me loopy, however I feel @sbf is telling the reality.
— Invoice Ackman (@BillAckman) November 30, 2022
Then there was this gem once I wakened this morning. I don’t actually know or wish to know who this clown is. His Twitter profile mentions he’s a “CNBC Crypto Dealer “. No matter that self-bloviation means. He’s additionally the founding father of Crypto Banter, which after a couple of minutes of analysis wasn’t onerous to see it was a typical pump-and-dump YouTube channel. SBF was in fast settlement to perpetuate the fraud!
I proceed to assume that this could be a productive path for events to discover! I *hope* that the groups in place will achieve this.
— SBF (@SBF_FTX) December 9, 2022
I imply, think about this. You deposit £1000 USD on FTX. SBF steals it from you, however to compensate you, he provides you FTT2 Tokens valued at a fictitious £1000. You agree, and go to attempt to promote, however since 1,000,000 different prospects did the identical factor you’ll be able to solely recoup £0.25. What a world.
Crypto Must be Cleaned Up
I’m sorry on your losses, however SBF is proof that the trade has been taken benefit of by wealthy VC belief fund kiddies, ex-consultants, and scammers. It’s good that FTX went bust.
Centralized crypto must be regulated and guidelines put in place. I’ve spent years managing liquidity threat and valuing FTT tokens at market worth in your liquidity buffer is legal in itself (and really can be legal for many monetary establishments beneath Dodd-Frank Enhanced Prudential Requirements). Decentralized crypto and Bitcoin must maintain constructing towards the top objective – the elimination of unhealthy actors.
The grime must be cleared from the trade so the true potential of cryptographic know-how will be unlocked for the world. That is the longer term and the likes of SBF can’t steal that.
Disclosure: I personal Bitcoin, Ethereum, Polygon, and different minor crypto positions. I’ve no cash trapped in FTX and wouldn’t use Caroline’s cash to purchase FTT Tokens.
