A friend of mine showed up on my doorstep last week – hair wet, phone dead, car towed. It was a war scene if I’d ever seen one. As we ushered her in and waited for her phone to charge, we began talking about men.
It is of note that despite what they show in the movies, women don’t always talk about men. We also talk about clothes and nail polish and all things pink!
However, on this fateful rainy evening, the topic of men that are routinely insufferable was, in fact, at the forefront of conversation. (If you’re looking for more sleepless nights, scroll to the bottom of this article for an irrelevant tweet by Elon Musk of his bedside table).
In any case, my friend who-will-not-be-named finished recounting the saga of an insufferable man who-will-not-be-named and closed with the statement “It’s a DNR situation.”
A DNR Situation: A person which, no matter the circumstance, we Do Not Resuscitate. In other words, they are dead to us. In more words, they shall never be revived.
I apologize if today’s headline led you astray and you thought I was introducing the next hot thing in crypto that would let you quit your day job – The DNR Cryptocurrency! I’d recommend reading my colleagues’ work for that type of tangible investment advice. If you’re new here, you may not know that I have a crippling aversion to cryptocurrency – those who promote it, those who try to explain it, and by far the worst – those who created it.
The holiday season never seems to disappoint in terms of mess, and this year is no different. Luckily for you (and me – the demise of corrupt people always adds a little skip to my step), Sam Bankman-Fried, former CEO of FTX (which was one of the world’s largest centralized cryptocurrency exchanges) was arrested last Tuesday. Comically, the arrest happened just hours after he tweeted out the foreboding statement “I don’t think I will be arrested.”
What is FTX?
Until recently, FTX was one of the world’s top digital currency-exchange platforms, where investors could buy and sell bitcoin, dogecoin and other cryptocurrencies. FTX also created its own token called FTT. Basically, if you were someone interested in crypto or NFTs or other intangibles that make no logical sense that they hold any sort of value but somehow do (?) this was the exchange for you.
The exchange advertised itself as a safe and easy way to get into crypto investing, paying for splashy television commercials featuring superstars such as NFL quarterback Tom Brady and tennis player Naomi Osaka. The desktop and mobile trading apps drew crypto investors of all skill levels, from beginners to seasoned professionals or, in crypto jargon, from newbies to whales. (I agree that this is horrifying rhetoric; I can’t imagine being called a whale and feeling anything other than offended, but crypto people are not the type I would look to as language gurus).
The FTX supported nine fiat currencies that investors could deposit and withdraw via a wire transfer… Basically, imagine a whole convoluted techy trading world from hell, based in the Bahamas but accessible worldwide. In early November 2022, the exchange and the companies in its orbit began a steep fall from grace.
The FTX Collapse
The FTX to the crypto market is like Jennifer Coolidge to The White Lotus – the whole thing kind of falls apart when you take her out of it.
Let me tell you a story…
The FTX is flying high. They issued millions of FTT tokens, which once traded as high as $80. (These have since lost most of their value).
The FTX allegedly shifted incoming money from investors to take loans for its partner firm, Alameda Research. (Now it’s flying quite low).
In November, when news spread that most of Alameda’s balance sheet was made of FTTs, the markets went into a tizzy. A man named Changpeng “CZ” Zhao, the founder of rival company Binance, said he’d sell more than $500 million worth of FTT, sparking a sell-off that sent the digital coin’s value plummeting. Oh no!
Investors rushed to pull their money out of FTX, and the exchange paused withdrawals. To rescue his foundering company, Bankman-Fried searched for a lifeline — and Zhao tentatively stepped up. A shock!
But no, another twist! Zhao abruptly backed out of the deal — saying that a review of FTX’s books revealed that it had “mishandled customer funds.” Soon after, Bankman-Fried resigned and the company filed for bankruptcy.
The collapse is seen as a failure of oversight and regulation in an industry that operates outside conventional banking rules.
You’re coming down with me..?
The consequences of FTX’s rapid decline and collapse will likely impact cryptocurrencies well into the future and drag down broader markets. On November 16, a class-action lawsuit was filed in a Florida federal court, alleging that Sam Bankman-Fried created a fraudulent cryptocurrency scheme designed to take advantage of unsophisticated investors from across the country.
Other celebrities named in the lawsuit include Steph Curry, Shaquille O’Neal, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary, who allegedly helped Bankman-Fried facilitate the plan.
Who is Sam Bankman-Fried?
Bankman-Fried, known by his initials SBF, was until recently the cryptocurrency world’s wunderkind. He shot onto the Bloomberg Billionaires Index with a net worth of $26 billion in the spring and has been a leading proponent of effective altruism, a movement that believes that rationality is key to doing maximum good in the world. I don’t even have the energy to explain the absurdity and irony of him branding himself as an “effective altruist.”
If I told you six months ago that SBF would be arrested for alleged fraud before Christmas you probably wouldn’t have believed me, that is, if you follow crypto news. Most of you who read this probably would’ve asked if that was the name of a guy from Hinge.
For a time, SBF was the golden child of the crypto industry. He had also become a force in the political world through tens of millions in campaign contributions. Not too long ago, when he was bailing out failing blockchain companies, SBF was being hailed as crypto’s Warren Buffett. Now he’s being compared to Bernie Madoff.
Despite Going to MIT…
SBF has decided to ignore his lawyer’s advice (who happens to be white-collar crime lawyer Mark S. Cohen, whose most recent client is convicted sex trafficker Ghislaine Maxwell) and since filing for bankruptcy thought it wise to talk to every media outlet that requested an interview.
This is highly unusual and inadvisable for someone being investigated by dozens of authorities around the globe. During these interviews, SBF acknowledged that his management of FTX was quite awful, but claimed he never intentionally committed fraud. (Prosecutors obviously believe otherwise).
The attorney general for the Bahamas announced last week that the former CEO of FTX had been arrested in the island nation, and American authorities explained that it came at their request. According to the New York Times, the criminal charges against SBF include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
Once worth $32 billion, FTX experienced a rapid wave of withdrawals, putting the company $8 billion short of remaining viable. The sudden implosion sparked investigations by regulators and the media, who discovered that SBF’s hedge fund, Alameda Research, had used billions in customer assets from FTX to fund high-risk bets of its own.
SEC Chair Gary Gensler said in a statement that Bankman-Fried “built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”
And to send you off with all the holiday fuzzies I’m sure to have elicited in this article…I figure, what’s one more awful thing?
Elon being a decaffeinated Coke drinker is the most nefarious fact I’ve learned about this man (against my will) to date. The only thing more chaotically evil about this image than his beverage of choice are the endless water stains on his bedside table that I’m sure cost more than the GDP of Monaco.
Here’s to Christmas, Chanukah, Kwanza and DNR-ing cryptocurrency.
Until the next.