16 - FTX, SBF and the Crypto Snafu

This episode the Unknowns attempt to decrypt the code that is the story of the FTX crypto scam, with the help of brand-new Unknowns Daniel and Stuart.

It turns out that the FTX scandal has all the trappings of a good old-fashioned Ponzi scheme, with a fancy crypto wrapper around it. The scheme centred around Sam Bankman-Fried (SBF), his crypto exchange start-up, FTX, and sister investment company Alameda. Regulations say that these two companies should have been kept separate, but it turns out that large amounts of cash was being illegally taken out of FTX accounts and used for highly risky investments by Alameda.

The money was also being used to hike the price of FTX´s crypto token, FTT (which were often newly minted by FTX themselves, FED-style, out of thin air) and making it seem that FTX had more assets than it really did. Gee, where have we heard that before?

One mystery is where the seed money for this new setup came from and how FTX managed to grow into the fourth largest crypto exchange in just a few years, handling billions of dollars’ worth of trades every day. Perhaps clues lie in SBF´s support of just about every woke cause you can think of, his becoming the second biggest donor to Biden’s Democrats (just behind George Soros) and the FTX running a big Ukrainian donation site.

Maybe the whole thing was a setup to enable the Ukrainian–Democratic party money laundering okey-doke? If it was just one big psy-op then, as usual, other agenda items may have been served: generating a scandal to push for crypto regulation; a way to blow up other crypto Ponzis by tanking their “assets”; and taking out rival crypto exchanges similarly.

One thing’s for sure: we can expect more of these Enron type scandals and collapses within the crypto space. So please make sure you keep your crypto off exchanges as much as possible and in your own personal wallets. And, just like you should never trust someone in a card game who is named after a city, don´t trust a crypto entrepreneur whose name gives clues as to what he is up to!

Unknowns featured this week: Justin, Ashley and new Unknowns Daniel and Stuart.

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