It's wild watching a Netflix documentary in real time before your eyes.
There's too many insane things about FTX/Alameda
- They were THE exchange publicly pushing for regulation. Actually this entire episode was partly spurred by FTX pushing for regulation and badmouthing Binance. This is real Gus Fring donating to the DEA energy.
- They took $10B of customer deposits from their FTX exchange to cover the bad bets from their hedge fund Alameda. This hedge fund was basically 10 people, all in a polycule relationship with each other, having drug fueled orgies in between insanely leveraged bets on altcoins
- The bank run that killed them was only brought on because their biggest rival, CZ of Binance, was angry they were badmouthing them to US politicians. For that transgression, SBF went from a net worth of $26 billion (on paper, not really) to completely bankrupt. CZ simply tweeted that he was going to dump the $FTT token and the dominoes destroyed everything they had.
- Wirthdrawals were still possible post-reveal for Bahamas citizens only. This makes sense. FTX is located in the Bahamas and good luck escaping the island alive if you didn't make the government and people there whole. This resulted in some people paying ~100k for a Bahamas ID to pass KYC. Those people will probably be hunted, but maybe they escape to an island with their millions.
- Most FTX employees are left with nothing. Most of them kept everything on the exchange and they were often compensated in coins that are now worthless. Outside of the inner circle they were all clueless about the deceptions and only found out on twitter with the rest of us.
- As I type, recently FTX wallets have been emptied of millions. It's possible they've been hacked with security light, it's more likely this is FTX insiders desperately trying to take what they can.
I think it's hard to overstate how bad this is for the mainstream adoption of crypto. They were probably the most visible crypto brand in America. Brady, Miami Heat arena, they paid $210 million for the naming rights to an esports team lol. SBF was the second biggest donor to the Demoractic party, he was the face of crypto in Washington. He was on the cover of Forbes a bunch of times as the next Warren Buffet. Now he's a disgrace and crypto will take a massive step back for awhile. After the Ontario teachers pension plan lost $400 million in FTX I don't see a lot of boring pension funds racing to crypto. They were seen as safe. We're in for a long winter.
For the love of god, keep any crypto you own with a hardware wallet and not on an exchange.
gizmodo.com
crypto is the future, man
