Cryptopoly Turns into Cryptogeddon
Cryptopoly Turns into Cryptogeddon
A tale of fraud, due diligence and orgies
So in the last 24h-48h, the very large crypto exchange FTX has blown up. After filing for bankruptcy, it got “hacked”, and the rest of the money has been siphoned away.
I will give a brief recap of how it unfolds at the end of the article. But mostly, I want to have fun at how absurd this all is. And what it can tell us of the excesses during the everything bubble popping at the moment.
A Crack Team
So the founder of FTX, Bankman (yeah, really) was apparently running it all from a Bahamas mansion. The place was mostly busy not with crypto, but with orgies between the employees.
No, I am not kidding.
That's what the next Warren Buffett was busy with… When he was not financing a giant stadium in Florida.
Of course, the inter-employee “fun” was extra fueled by a bit of “extra”, I present you the trading branch CEO…
Absolutely the kind of person that should manage billions. Even the Wolf of Wall Street was at least hiding his drug habit from his clients, right?
The whole team is 20-something year olds with no prior experience or particular qualifications.
The aforementioned CEO of the trading branch that blew the rest of the company proudly claimed how simple their method was:
We use very little math, We use a lot of elementary school math.
The (un)expected collapse
Really, who could have guessed something would go wrong…
Not like if nobody rang the alarm bell:
The video above claims that FTX’s CTO is apparently working with Sequoia as well, a large FTX investor. And how FTX’s Chief Regulatory Officer was involved in an online poker casino fraud. And how Bankman could never explain where his money came from.
For sure the auditing should have seen something wrong.
Of course, the auditing firm was very busy being the first to open an office in the Metaverse, so they might have been a bit distracted... Yeah, really…
For that matter, FTX had no board of directors, so there was that too…
I am sure a glance at their corporate structure would not indicate an absurd amount of complexity and possibility for weird back dealings and frauds…
I am really laughing at the whole crypto world stupidity here. Tulip bulb mania was nothing in comparison. I am actually not sure if ANY previous bubble was as dumb as this one. At least after the tulip bulb mania, people had tulips to enjoy.
This is so ridiculous that I will let the Supreme Troll, the Ultimate Tweet, Elon Musk himself, have the final word on how it looks.
Sequoia implication
Sequoia is this BIG VC firm very deep in crypto and profitless tech.
They invested $213M in FTX. Later FTX, while it was busy stealing its clients’ money, invested $500M back in Sequoia.
Kinda shady if you ask me…
But they are not the only ones involved, here is a looong list of everyone that invested in FTX. Including the usual suspects of Tiger, Blackrock CoinBase, Binance.
I guess Sequoia is fine, but really this is the kind of check they did before the FTX investment: apparently, Bankman was busy playing videogames (League of Legends) while raising funds.
Sequoia LOVED that. Apparently…
Again, I am not kidding:
A lot of other people got dragged into FTX, including celebrities like Tom Brady, Michael Jordan, etc... Because sports guys are of course known for their investing acumen.
Bonus Conspiracy Theories
I am also amused at who empowered this whole disaster.
It seems everybody in the leading team is well-born into the global oligarchy. So speculation and the wildest theories can run amok.
His mother was also apparently the founder of a Democratic Party super PAC “Mind the Gap”.
The trading branch CEO I mentioned before has a father head of Economics at MIT.
FTX was proudly promoted by the World Economic Forum
This whole affair is like a total win at the conspiracy bingo. You can find everything in there!
All of these political and elitist connections must have played a big role in shielding FTX from legitimate critics and giving it access to money.
Expect this to compound on a strong populist undercurrent and be used by the Trump team as an example of widespread corruption in the democratic party.
Next?
I really hope that what’s next is the final unraveling of the crypto stupidity. It might have been a good idea initially, but greed and fraud have killed it.
A full reboot at least will be a good thing.
For sure, the constellation of crypto “ventures” of FTX is probably toast at least.
The biggest of all exchanges, Binance, rumored to have been the instigator of the demise of FTX, might be next in a very ironic twist.
An eye on “stablecoins” is probably worth it as well, considering plenty of evidence that Tether, the main support for Bitcoin prices, is likely an FTX-style fraud as well. For that matter, Tether is also relying on the very friendly and uncurious Bahamas jurisdiction.
By the way, FTC ITSELF was telling us about it being a bad idea.
I STILL kid you not.
When this is done, and Cathy Wood has blown up her funds as she did in the dot com bubble, THEN we can call the tech bubble 2.0 over.
Not before.
That might be a rocky ride for the clueless “investors” in the meantime.