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Speaker 1: The Coin Bureau Podcast is a production of My Heart Radio.

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Speaker 1: Do you let something that you know to be rotten?

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Speaker 1: Do you let that carry on? I mean people of

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Speaker 1: people could have carried on pouring money into ft X.

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Speaker 1: I mean this is this is a company that was

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Speaker 1: making f t X, was making eight figures every single day.

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Speaker 1: Welcome everyone to the coin Bureau Podcast. My name is

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Speaker 1: Guy and I am here with my very dear friend

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Speaker 1: Matt Mike Mooch. Hey, how are you? I've got to

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Speaker 1: be honest, I have been better. It has It has

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Speaker 1: been you know, one of those questions when you ask

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Speaker 1: and it's kind of like it's it's rhetorical. You know,

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Speaker 1: we're all feeling it at the moment um, and and

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Speaker 1: things are not as rosie as maybe we've painted on

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Speaker 1: some of the other podcasts, which always end in upbeat,

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Speaker 1: glowing sort of horizons. But yeah, this this week has

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Speaker 1: been crypto interesting. I think cryptoged. If you thought Enron

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Speaker 1: was big, do you know what it's interesting you should

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Speaker 1: say that because this, like a lot of people have

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Speaker 1: been saying, this is Crypto's Enron, And like the parallels

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Speaker 1: don't end there. Because the guy actually now brought in

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Speaker 1: two clean up f t X, you know, to basically

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Speaker 1: oversee it being wound down. It's the same guy who

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Speaker 1: was brought in to do that with anyone. Um, so yeah,

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Speaker 1: there are some there are some uncomfortable parallels. Anyhow, for

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Speaker 1: for anyone listening, I don't know. I imagine most people

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Speaker 1: listening to this will kind of have as at the

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Speaker 1: very least of a guy year of what has gone down.

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Speaker 1: But for those, the breaking news is Mount Cox is over.

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Speaker 1: Mount Cox is no longer the biggest catastrophe in all

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Speaker 1: of crypto. Mount Cox has been booted down the rankings. Yes,

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Speaker 1: so to quickly recap last week f t X, which

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Speaker 1: was the second biggest crypto exchange in the world, it collapsed.

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Speaker 1: And it is safe to say that not many people

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Speaker 1: saw this coming and it has. It has hit the

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Speaker 1: crypto industry like a bomb, like an atomic bomb. Really,

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Speaker 1: and yeah, there is a lot too, There is a

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Speaker 1: lot to unpack. And I should say at this point, Mikey,

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Speaker 1: it goes without saying really, but obviously this is a situation.

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Speaker 1: We're recording this on Tuesday, November. This all started happening

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Speaker 1: about a week ago, and as we speak, this is

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Speaker 1: going to be going out a few days later on

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Speaker 1: the Friday as we speak. Obviously things are happening, so

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Speaker 1: there will be this story will have kind of developed

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Speaker 1: by the time people are listening to it. But I

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Speaker 1: think maybe you'll be fixed. You never know. Wow, that

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Speaker 1: is that is optimism. I didn't know you possessed sir. Yeah. Maybe,

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Speaker 1: but I would say the chances of that are so

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Speaker 1: infintestable that we may as well. We may as well

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Speaker 1: park that right now. But hey, stranger happened. And you

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Speaker 1: know what, Mikey like this week, some of the things

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Speaker 1: that have happened this last week or so have been

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Speaker 1: so extraordinary that I I am literally willing to believe

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Speaker 1: pretty much anything I hear at the moment. My critical

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Speaker 1: thinking has taken such a battering because some of this

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Speaker 1: stuff is like you literally couldn't make it up. So

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Speaker 1: what I thought? We did a fire first of crypto this? Yeah, yeah,

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Speaker 1: I think that's I think that's a good one. I

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Speaker 1: think that's a good one. Did did fire festival happen

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Speaker 1: in the Bahamas? Yes? Okay, yeah, it did happen in

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Speaker 1: on some on some island. That was Pablo Escobars or wasn't.

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Speaker 1: I don't know. Yeah, yeah, okay, Well f t X

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Speaker 1: was what's left of it still is based in the Bahamas,

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Speaker 1: so yeah, there's a there's a definite parallel there. There's

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Speaker 1: there's several parallels. So anyhow, what I thought i'd do today,

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Speaker 1: I I remember messaging you sort of a few days

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Speaker 1: ago and being like, are you you are aware of

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Speaker 1: what is happening? And I got to sort of guarded

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Speaker 1: yes in reply. So what I thought this would be

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Speaker 1: a useful episode to do was I would bring you

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Speaker 1: up to speed with what happened, um and give you

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Speaker 1: a bit of background, give you and the listeners a

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Speaker 1: bit of background into into what's been going on, how

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Speaker 1: this was able to happen, and maybe kind of speculate

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Speaker 1: on where exactly we go from here, because this is

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Speaker 1: a real kind of the crypto industry itself. I think

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Speaker 1: it's fair to say it's kind of going through like

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Speaker 1: a massive existential crisis at the moment. And this at

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Speaker 1: the end of a year which has already been like

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Speaker 1: quite a part of you know, without FDx happening, this

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Speaker 1: would still have been one of the worst years for

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Speaker 1: crypto ever. So it's it's it's only getting worse. So

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Speaker 1: it's it's a difficult time for the industry. So I

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Speaker 1: think it might be, you know, it might be good

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Speaker 1: to come of look ahead and try and try and

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Speaker 1: speculate where where we're going and what might happen next,

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Speaker 1: and if they're you know, how we can possibly try

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Speaker 1: and move forward from this, you know, as an industry sector,

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Speaker 1: because we will and you know we have to and

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Speaker 1: we will. But my word, there's a lot of this

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Speaker 1: is a this is a hard one to to slow.

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Speaker 1: It really is, it really is, and we'll we'll get

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Speaker 1: into why that is in a moment or so. I also, Mikey, like,

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Speaker 1: I know, I know you and I have been talking

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Speaker 1: crypto for for a while now, and so I wouldn't

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Speaker 1: classify you as like, yeah, a complete outside of the crypto,

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Speaker 1: a complete new because obviously 're not. And actually, I

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Speaker 1: mean you've been buying crypto for for for longer than

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Speaker 1: I have. But I wouldn't say, I wouldn't say you

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Speaker 1: quite have the status of an industry insider just because

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Speaker 1: you sort of oh, well, I'm I'm insulted, but also

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Speaker 1: agree I have you know, I've I've had the opportunity

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Speaker 1: when we were at Bitcoin Miami and when when I've

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Speaker 1: been I've been around you and the guys at coin Bureau,

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Speaker 1: I often think to myself, you know, I've got a

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Speaker 1: really big opportunity to immerse myself in among some crypto

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Speaker 1: uh sort of sages, and then I get distracted by

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Speaker 1: anything else and and and ignore that giant opportunity and

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Speaker 1: carrying on with my life. Willie nially, So, yeah, I

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Speaker 1: have the opportunity to to to learn a lot, but

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Speaker 1: I choose not to. Sure, Okay, And I mean, yeah,

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Speaker 1: I guess. I guess the crypto industry sort of held

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Speaker 1: out its hand and said, come on in, Mikey, come

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Speaker 1: on in, and you you sort of ignored it. And

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Speaker 1: I bet you're feeling pretty pretty pleased about that at

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Speaker 1: this Well, if I was paying attention, I would be,

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Speaker 1: but I haven't, so I'm indifferent. Okay, Okay, Well, I'm

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Speaker 1: I'm gonna say, I'm gonna I'm gonna classify you as

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Speaker 1: a kind of as an outsider looking in. Albeit. Yeah,

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Speaker 1: I'm a casual I'm a casual crypto fan. I suppose observer.

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Speaker 1: So I'm there for the heavyweight battles, and I think

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Speaker 1: one of the heavyweights is down for the count at

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Speaker 1: the moment, one of the heavyweights is splattered all over

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Speaker 1: the canvas at the moment. Yeah, So as I'm keen

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Speaker 1: Mikey sort of after or I've kind of talked you

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Speaker 1: through what has happened, and as I say, like, there

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Speaker 1: is so much more to this story. So anyone listening,

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Speaker 1: you know, a few days from when we record this,

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Speaker 1: there will be other stuff. So we'll keep you up

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Speaker 1: to date on our other models. But I'd be interested,

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Speaker 1: Mikey at the end of this once I've explained it

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Speaker 1: a little bit too, to get your thoughts on not

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Speaker 1: only this instant, not only what's happened over the last

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Speaker 1: week or so, but kind of how this makes crypto

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Speaker 1: look and outsider's view of crypto, because I think one

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Speaker 1: for me, one of us, one of the hardest things

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Speaker 1: to bear about all this is that it is just

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Speaker 1: the worst advertisement for an industry that I that I

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Speaker 1: love and care very deeply about, and it just looks

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Speaker 1: so bad at the moment, or that's how I see it.

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Speaker 1: So yeah, just part that for the time being, and

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Speaker 1: then maybe you know, I just want to say that

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Speaker 1: that is the equivalent of you know, someone on the news,

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Speaker 1: you know there has been some great tragedy or something

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Speaker 1: like that, and they just go to some every man

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Speaker 1: in the street who has absolutely no idea, has no

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Speaker 1: grounding or perspective on the topic, and they asked him

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Speaker 1: for a sound bite of what has happened. And they

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Speaker 1: are looking for something deep and meaningful, and just what

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Speaker 1: gets regurgitated is just just drivel. So I'm i'm I'm

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Speaker 1: I'm honored. But also if I was a listener, I'd

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Speaker 1: be insulted that you're asking me for my opinion. And

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Speaker 1: that's all we've got time for this week, folks. I'm

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Speaker 1: talking my way out of this podcast very quickly. No, no, no,

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Speaker 1: I I know what you mean. I'm interested in crypto UM.

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Speaker 1: I skim it. I don't live and breathe it like

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Speaker 1: like you guys do. Uh. And but there have been

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Speaker 1: ripples that were sort of the way I noticed it

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Speaker 1: was the memes, do you know what I mean? I saw,

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Speaker 1: I saw, I was. I was on LinkedIn actually, UM

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Speaker 1: and I saw some people posting about the toxic um

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Speaker 1: uh work like sleep at work sort of memes that

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Speaker 1: were happening and how that sort of and I just

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Speaker 1: saw someone's comments and saying, we well, look we can

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Speaker 1: all see how that turned out. Um, and it's later

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Speaker 1: come to light that it was in reference to the

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Speaker 1: head of the f F F t X or whatever

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Speaker 1: sleeping on a beam bag or something like that. Yeah. Yeah,

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Speaker 1: that's that's how I got the news. Well, this is

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Speaker 1: the twenty one century after all. Yeah. So, I mean

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Speaker 1: like you're going to very much be that man in

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Speaker 1: the street asked to ask to share his drivel, share

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Speaker 1: the inside of his brain with And I'm not going

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Speaker 1: to try and say something too bigoted is essentially what

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Speaker 1: That's what I'm going to do. If you could do

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Speaker 1: your best, that would be great. I mean if you can't, um,

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Speaker 1: and we'll have a discussion about your contract after that. Okay,

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Speaker 1: So all right, well you mentioned, um, you mentioned Sam

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Speaker 1: Bankman Freed, not by name, but the guy you're talking about, yeah,

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Speaker 1: is the head was the head of F t X,

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Speaker 1: And I think it's probably good to start with him, um,

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Speaker 1: because this is the guy, like you know, this is

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Speaker 1: the guy at at whom every finger is pointing at

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Speaker 1: the moment, and rightly so. So I think let's let's

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Speaker 1: start with SPF. So, um, Sam Bankman Fried, Okay, Now

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Speaker 1: he is I guess you'd say a relative newcomer to

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Speaker 1: the crypto industry. He's not a crypto o g in

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Speaker 1: any way, shape or form, and he kind of first

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Speaker 1: came to prominence a kind of around and I'll give

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Speaker 1: you a bit of background on him. He's he's the

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Speaker 1: child of Stanford law professors who seemed to be very

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Speaker 1: very well connected with people in Washington, with people in

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Speaker 1: kind of us you know, US regulatory circles if you

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Speaker 1: like um, and with people I think with the Democratic

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Speaker 1: Party as well, which is which is something that's you know,

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Speaker 1: it caused a lot of incited a lot of attention

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Speaker 1: over the last few days as well. We'll get back

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Speaker 1: to that. Anyhow, he graduated from from M I T.

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Speaker 1: And he went to work for a kind of traditional

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Speaker 1: finance trading company called Jane Street. And he was working

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Speaker 1: there for a few years kind of doing you know,

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Speaker 1: kind of regular fire trading stuff, and one way or another,

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Speaker 1: discovered crypto and he realized that there was an easy

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Speaker 1: way to make money. Now, this is not what this

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Speaker 1: is not the sort of easy way that that that

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Speaker 1: a lot of people discovered. This was something he basically

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Speaker 1: realized that bitcoin on exchanges in Japan and I think

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Speaker 1: South Korea as well, was actually trading at a lower

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Speaker 1: price than it was on exchanges in the United States.

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Speaker 1: So or was it the other way around. Yes, no,

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Speaker 1: that's right. Bitcoin was more expensive in Japan than it

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Speaker 1: was in the United States. So he would buy bitcoin

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Speaker 1: on US exchanges and sell it on Japanese exchanges. This

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Speaker 1: is a you know, a classic kind of arbitrage trade,

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Speaker 1: and he would pocket the difference, and he set up

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Speaker 1: a company to do this that he called Alameda Research. Now,

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Speaker 1: one of the interesting things is Alometer Research obviously sounds like,

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Speaker 1: you know it kind of you know, very kind of

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Speaker 1: high brow, the recert thing obviously, and as he pointed

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Speaker 1: out in an interview after the fact, he said, well,

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Speaker 1: I called it that because in order to attract investment,

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Speaker 1: because if we called ourselves ourselves shipcoin trading company, then

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Speaker 1: no one would have no one would have invested. So yeah,

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Speaker 1: he was. So this grew from like, you know, this

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Speaker 1: this bitcoin arbitrage trade, and it grew, you know that

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Speaker 1: by this point they were they were trading lots of

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Speaker 1: different crypto is not just not just bitcoin, and they

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Speaker 1: made a ton of money doing it. They apparently started

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Speaker 1: with two hundred dollars and basically traded it up to

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Speaker 1: two millions, even billions, and Alameda he should sell a course,

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Speaker 1: actually make some money. Now, well, he's going to have

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Speaker 1: a good money from somewhere. He's got a big old,

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Speaker 1: big old hole to plug. So Alameda Research. Now we'll

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Speaker 1: come back to Alameda Research because this is this is

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Speaker 1: very much central to the whole story anyhow, Sam Bankman

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Speaker 1: Fried SPF and you know, you know, someone in crypto

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Speaker 1: is powerful when they start getting known by their just

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Speaker 1: their initials. F became one of the most well known

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Speaker 1: figures in all of crypto. And I don't know if

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Speaker 1: you've seen pictures of him. I don't know if you're

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Speaker 1: kind of familiar with what he looks like, but he's

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Speaker 1: basically Yeah, he's quite young, isn't he, or twenty nine

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Speaker 1: or something when he started it all. Yeah, he was

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Speaker 1: very he's I think he's just turned thirty and he

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Speaker 1: became I I think it may be fair to say

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Speaker 1: he became the youngest billionaire ever quite you know, quite recently. Um,

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Speaker 1: And yeah, he he's very sort of distinctive. He's got

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Speaker 1: this huge kind of mess of sort of curly blue

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Speaker 1: yeah boufony hair, um, and he became famous for sort

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Speaker 1: of just kind of dressing shorts and T shirt, you know,

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Speaker 1: not not noted for his dress sense or noted for

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Speaker 1: his dress all the wrong way. And but basically he

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Speaker 1: became one of the most well known figures in crypto,

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Speaker 1: very very well connected, not just through his parents but

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Speaker 1: also through contacts you know, at previous places that he'd

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Speaker 1: worked and and through M I. T as well. And

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Speaker 1: what this meant was that he spent increasingly a lot

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Speaker 1: of time in Washington sort of talking to US regulators,

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Speaker 1: and he was very much kind of front and center,

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Speaker 1: if you like, of the crypto industries efforts to kind

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Speaker 1: of engage with regulators in the United States to try

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Speaker 1: and kind of yeah, it gets worse, it gets worse.

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Speaker 1: So yeah, he was not the I wouldn't say he

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Speaker 1: was necessarily the poster poster child for the crypto industry,

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Speaker 1: but he was certainly one of its most well known figures.

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Speaker 1: And you know, there's there's there's no getting around that.

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Speaker 1: And obviously he attracted you know, a lot of people

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Speaker 1: admired him very much. A lot of people disliked him,

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Speaker 1: um intensely because you know, for various reasons, A few

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Speaker 1: more now maybe. Yeah, well, I was gonna, I mean, Mikey,

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Speaker 1: I've got some bad news to break to you here.

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Speaker 1: I think it's fair to say that he is now

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Speaker 1: he has taken that title of the most hated person

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Speaker 1: in crypto. So I'm afraid that titles seems to be

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Speaker 1: changing hands by the week. Yeah, yeah, the Yeah, I

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Speaker 1: think I can't see oh my word, I feel I

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Speaker 1: feel like I'm just tempting fate by saying this. I

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Speaker 1: can't see it changing hands again anytime soon. But I'm

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Speaker 1: fully clip it up. I fully prepared for that statement

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Speaker 1: to come back and haunt me. Yeah, it's sort of

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Speaker 1: it went from do kuon to you know, the founder

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Speaker 1: of Terror. It went it sort of past to Alex Mazinski,

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Speaker 1: the founder of Celsius. If it passed to the guys

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Speaker 1: who were in charge of Three Arrows Capital. It's been

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Speaker 1: kind of kicked around like a football, but it has

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Speaker 1: come to rest very much like a hundred meter relay race. Basically,

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Speaker 1: they're just passing that baton of hate and hopefully this

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Speaker 1: is the home stretch. Yeah yeah, I think I think

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Speaker 1: SPF is the man to take that bat on over

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Speaker 1: the line, certainly for two. But he this is crypto,

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Speaker 1: so let's not let's not rule anything out anyhow. So

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Speaker 1: SPF was kind of seen by it came to be

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Speaker 1: also seen by many as a kind of white Knight

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Speaker 1: of crypto. And this was in the wake of the

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Speaker 1: terror collapse. Now you'll remember this. This feels like ancient

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Speaker 1: history now because so much has happened this year. But

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Speaker 1: you'll recall in May this year was the last time

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Speaker 1: crypto is in absolute crisis, and that was the collapse

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Speaker 1: of terror, and that saw you know a lot of

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Speaker 1: contagions spreading through the industry, a lot of crypto companies

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Speaker 1: that were exposed to terror, and it's us T stable kin.

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Speaker 1: A lot of them kind of faced going to the wall,

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Speaker 1: and an SPF kind of charged in a bit like

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Speaker 1: a white knight and sort of to the rescue of

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Speaker 1: a lot of these companies. Um, now we'll come back

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Speaker 1: to terror because this is this very one thing that's

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Speaker 1: become clear over the last week or so is that

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Speaker 1: this collapse of f t X and Alameter Research is

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Speaker 1: very much as a result of terror. These things are

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Speaker 1: all interlinked, so linked in it's another domino effect that's happened. Yeah,

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Speaker 1: it's just this domino is that is kind of has

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Speaker 1: fallen a sort of a lot later on, and it's

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Speaker 1: a lot lot bigger than the previous domin those anyhow,

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Speaker 1: So yeah, he SPF kind of made himself quite popular

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Speaker 1: obviously also attracted a few enemies, as someone in that

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Speaker 1: position would do. Um. He was well known for donating

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Speaker 1: lots of money to political causes, and I think he

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Speaker 1: was the second largest donor to Biden's campaign in presidential

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Speaker 1: campaign back in I think the second second largest year.

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Speaker 1: He donated a serious amount of money to that campaign.

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Speaker 1: I think only George Soros, I think was the was

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Speaker 1: the largest and an SPF was in second. And I

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Speaker 1: should say he has donated to to to Republican causes

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Speaker 1: as well. But he's most well known for being a

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Speaker 1: big Democrat and Biden donor, and he has a lot

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Speaker 1: of ties to people who you would say move in

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Speaker 1: that circle. So he's been he's been kind of pictured

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Speaker 1: on stage that there are lots of pictures of him.

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Speaker 1: He at a at a FTX conference which I think

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Speaker 1: was large last year. He was on stage talking with

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Speaker 1: Bill Clinton and Tony Blair. And yes, so he's very much,

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Speaker 1: if you like, associated with kind of people on the

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Speaker 1: left of politics, or certainly you know, towards the left

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Speaker 1: of the political spectrum. And a few other things to

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Speaker 1: know about him, Um, he is he's a believer in

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Speaker 1: something called effective altruism, which is a kind of it's

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Speaker 1: hard to describe. It's a kind of philanthropic movement that

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Speaker 1: that kind of aims to give give money away sort

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Speaker 1: of in a in a kind of more efficient manner.

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Speaker 1: I think it's very much a data driven philosophy. It's

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Speaker 1: kind of circumnavigating the bureaucracy of a lot of traditional charities. Yeah,

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Speaker 1: I think so. I think so. And it's sort of

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Speaker 1: a but you know, it's very much a philanthropic endeavor obviously,

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Speaker 1: and he was well known for kind of talking about

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Speaker 1: it and making a big thing of it and as

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Speaker 1: many people will now say, kind of virtue signaling out

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Speaker 1: of it. But you know, he was, he was, He

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Speaker 1: publicized that that side of himself, and he was he

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Speaker 1: was again kind of famous. F t X set up

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Speaker 1: its headquarters in the Bahamas, and he was sort of

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Speaker 1: known to be basically living in um this kind of

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Speaker 1: shared house with a lot of his buddies from m

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Speaker 1: I t from Jane Street and from elsewhere, um who

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Speaker 1: helped him run f t X and Alameda. And yeah,

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Speaker 1: he was famous for kind of sleeping on a bean

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Speaker 1: bag in the f t X offices and just generally

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Speaker 1: being you know, very eccentric, very very you know, well known. Um,

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Speaker 1: you know you couldn't you couldn't miss him basically for

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Speaker 1: all sorts of reasons. And I think it's worth just

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Speaker 1: repeating this from his kind of from his Wikipedia page.

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Speaker 1: This is the personal life section of his Wikipedia page. Um,

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Speaker 1: assuming it hasn't been altered and defaced, but quote bankman

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Speaker 1: Fried is vegan. He lives in a penthouse in the

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Speaker 1: Bahamas with about ten roommates. He has a love for

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Speaker 1: the video game League of Legends, and allegedly played the

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Speaker 1: game while on a call attempting to secure an investment

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Speaker 1: from Sequoia Capital, a big sort of VC fan. Anation

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Speaker 1: by The Financial Times characterized Bankman Freed's win ratios in

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Speaker 1: League of Legends as average too bad. Anonymous employees of

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Speaker 1: f and Alameda reportedly told Coin Desk that bankman Freed

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Speaker 1: was dating coworker Caroline Ellison. Now this there's some of these,

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Speaker 1: but some of this may sound a little inconsequential, but

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Speaker 1: in light of everything that's that's kind of gone on,

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Speaker 1: it is actually it is actually all quite important. I mean,

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Speaker 1: I don't think that that League of Legends win ratio

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Speaker 1: is really how I like, that's what I need to

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Speaker 1: know what the CEO has win reissues before I invest

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Speaker 1: in any company. Absolutely, I mean, you know bad too,

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Speaker 1: what was it average to bad? Massive red flag? I'm

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Speaker 1: not investing if only we've known. Yes, But there's also

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Speaker 1: an argument saying that, well, if it's that bad, he's

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Speaker 1: obviously not spending that much time doing it, so that

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Speaker 1: could be a positive. Like it's it's what perspective do

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Speaker 1: you look at this? If he was phenomenal at it,

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Speaker 1: I don't think he would have secured that secure your investment.

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Speaker 1: You you may be onto something there, Mike, you may

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Speaker 1: be onto something, So you're welcome. Thank you. Yeah, as

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Speaker 1: as usual, Mike, you can be trusted to bring a

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Speaker 1: degree of objectivity to these conversations that I just don't

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Speaker 1: think we could find anywhere else. So thank you, sir. Anyhow, Yeah,

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Speaker 1: so let's I mean, let's go through that. So Vegan,

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Speaker 1: I think, well, I don't know, like there's a lot

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Speaker 1: of stuff all over crypto Twitter at the moment that

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Speaker 1: you know, basically, vegans are vegans are are very much

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Speaker 1: out of fashion in the crypto industry anyhow. But this

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Speaker 1: thing of him living in a penthouse in the Bahamas

397
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Speaker 1: now with ten roommates, now there's been a lot of

398
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Speaker 1: stuff come out about all this. Uh, these guys, as

399
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Speaker 1: I say, he's known for a long time, and they

400
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Speaker 1: appear to have been running the show. And yeah, it's

401
00:24:02,240 --> 00:24:06,280
Speaker 1: it's becoming increasingly clear that they were there because they

402
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Speaker 1: knew SPF a lot of them and were really fundamentally

403
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Speaker 1: unqualified to be to be doing what they were doing

404
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Speaker 1: like they you know, And actually Caroline Ellison is an

405
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Speaker 1: interesting one. Caroline Ellison was the CEO of Alameda Research,

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Speaker 1: and as this Wikipedia thing says, she and SPF had

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Speaker 1: known were known to have dated for a while. And

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Speaker 1: I think basically this whole group seemed to have been

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Speaker 1: kind of dating each other and you know, all all

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Speaker 1: very close and yeah, kind of CULTI yeah, it does

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Speaker 1: sound a bit culty, doesn't it. And you know, you'll

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Speaker 1: live in the Bahamas in a complex with all together,

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Speaker 1: you know, you're a dressed in weird ways and and

414
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Speaker 1: it doesn't end well, yeah, you will drink from the

415
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Speaker 1: same tub of kool aidol aid. Yeah. So yeah, it's

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Speaker 1: some this This guy obviously has you know, a very

417
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Speaker 1: sort of a very kind of odd past, if you like.

418
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Speaker 1: And what's becoming increasingly clear is the Alameda Research and

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00:25:12,800 --> 00:25:16,520
Speaker 1: f t X were far too close for comfort because

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Speaker 1: they were different entities. Basically, f t X was an

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Speaker 1: exchange that took customer deposits and you know, and and

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Speaker 1: was supposed to be a custodian of those deposits. Alameter

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Speaker 1: Research on the other hand, as a trading company, so

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Speaker 1: it's making you know, it's making big old bets on

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Speaker 1: on the crypto market essentially. And the fact that these

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Speaker 1: two companies were so close, and the fact that the

427
00:25:43,720 --> 00:25:47,800
Speaker 1: CEO of one, Alameter Research, was working alongside the CEO

428
00:25:47,960 --> 00:25:50,959
Speaker 1: of another f t X, and the fact that they

429
00:25:50,960 --> 00:25:53,560
Speaker 1: were obviously very very close, even if they weren't kind

430
00:25:53,600 --> 00:25:57,320
Speaker 1: of you know, dating at the time or whatever that is.

431
00:25:57,600 --> 00:26:01,119
Speaker 1: You know, there's there's too much, you know, there's too

432
00:26:01,240 --> 00:26:06,600
Speaker 1: much information being shared there and Alameda had there's more

433
00:26:06,640 --> 00:26:09,919
Speaker 1: than just information, well, there's too much of the funds

434
00:26:09,960 --> 00:26:14,320
Speaker 1: from one company being shared with the with the the

435
00:26:15,440 --> 00:26:18,280
Speaker 1: speculators to the other. This is exactly, this is exactly

436
00:26:18,280 --> 00:26:20,120
Speaker 1: what happened. And I don't think, you know, I don't

437
00:26:20,160 --> 00:26:23,240
Speaker 1: think we're jumping the gun to say this. You know this,

438
00:26:23,480 --> 00:26:26,639
Speaker 1: this basically is kind of what is what happened. And

439
00:26:26,760 --> 00:26:29,360
Speaker 1: I should say as well, obviously Alameda as a trading

440
00:26:29,400 --> 00:26:33,760
Speaker 1: company had this huge advantage because if you're a trading company,

441
00:26:33,800 --> 00:26:37,600
Speaker 1: if you're making bets on the market, and you can

442
00:26:37,760 --> 00:26:41,840
Speaker 1: see in real time what's happening, what other people are

443
00:26:41,880 --> 00:26:44,800
Speaker 1: betting on, because you have you know, you theoretically have

444
00:26:44,840 --> 00:26:49,320
Speaker 1: access to this exchange's order books, that is a huge advantage.

445
00:26:49,359 --> 00:26:51,160
Speaker 1: You know, you're able to you're you're able to see

446
00:26:51,200 --> 00:26:53,480
Speaker 1: what the market is doing and place your bets accordingly.

447
00:26:53,600 --> 00:26:58,720
Speaker 1: So you are the bookies. Yeah, and your your book

448
00:26:58,760 --> 00:27:00,879
Speaker 1: is you're seeing what bets are coming in and you

449
00:27:00,920 --> 00:27:03,320
Speaker 1: can head your bets and sort of go, okay, cool,

450
00:27:03,359 --> 00:27:05,240
Speaker 1: well people are betting on that. I need to take

451
00:27:05,280 --> 00:27:09,919
Speaker 1: some bets on this and it should be unfunk up

452
00:27:10,040 --> 00:27:14,719
Speaker 1: herble should being the operative word. Yeah, yeah, And this

453
00:27:14,800 --> 00:27:16,919
Speaker 1: is one of the things like in the in the

454
00:27:17,000 --> 00:27:19,159
Speaker 1: kind of immediate aftermath of it, this was one of

455
00:27:19,160 --> 00:27:22,920
Speaker 1: the first questions, you know, I and and others here

456
00:27:23,080 --> 00:27:25,159
Speaker 1: at coin Bureau or kind of asking ourselves. It's like

457
00:27:25,680 --> 00:27:30,880
Speaker 1: these guys literally had, you know, everything going for them,

458
00:27:30,960 --> 00:27:34,720
Speaker 1: like they had a huge advantage, you know, and it

459
00:27:34,800 --> 00:27:37,320
Speaker 1: just goes to show you, especially, you know, especially if

460
00:27:37,359 --> 00:27:39,320
Speaker 1: you're you know, if you're one of these traders who

461
00:27:39,400 --> 00:27:41,760
Speaker 1: makes kind of leverage bets or anything like that, like

462
00:27:42,520 --> 00:27:46,320
Speaker 1: the market is is just rigged against you. It's like,

463
00:27:46,480 --> 00:27:49,600
Speaker 1: you know, these big guys they have so much, they

464
00:27:49,760 --> 00:27:52,639
Speaker 1: just have information that the rest of us don't see.

465
00:27:53,000 --> 00:27:56,040
Speaker 1: And this is going to be something, this is going

466
00:27:56,040 --> 00:27:57,800
Speaker 1: to be something that we're going to have to to

467
00:27:57,840 --> 00:28:00,359
Speaker 1: talk about as an industry a lot over the coming

468
00:28:00,840 --> 00:28:03,480
Speaker 1: over the coming weeks, as the fallout from this continues. Anyhow,

469
00:28:04,280 --> 00:28:06,560
Speaker 1: let's i mean, let's just cut two. Let's just cut

470
00:28:06,600 --> 00:28:08,480
Speaker 1: to the spoiler, because we've already kind of talked about

471
00:28:08,480 --> 00:28:11,879
Speaker 1: it a little bit. But basically, in the wake of

472
00:28:12,240 --> 00:28:19,359
Speaker 1: terrorist collapse, Alameda lost a bunch of money and the

473
00:28:19,840 --> 00:28:26,800
Speaker 1: basically SPF started plugging that hole with customer funds from

474
00:28:27,160 --> 00:28:31,320
Speaker 1: f t X. And you don't need to be you know,

475
00:28:31,400 --> 00:28:33,439
Speaker 1: you don't need to work in finance, you don't need

476
00:28:33,480 --> 00:28:36,359
Speaker 1: to agree in economics or law enforcement or whatever it

477
00:28:36,440 --> 00:28:39,520
Speaker 1: is to know straight off the bat that that is

478
00:28:39,600 --> 00:28:43,680
Speaker 1: just that is just for bolting. That's a that's naughty

479
00:28:44,360 --> 00:28:46,320
Speaker 1: unless you've asked for their permission. But I'm not sure

480
00:28:46,360 --> 00:28:50,719
Speaker 1: if they did. Yeah, yeah, they they They certainly didn't.

481
00:28:50,920 --> 00:28:55,440
Speaker 1: They certainly they didn't. So that all takes us, I

482
00:28:55,480 --> 00:28:57,280
Speaker 1: think to the next point that we'll pick up with

483
00:28:57,440 --> 00:29:15,760
Speaker 1: after we've had a short break. Welcome back everyone to

484
00:29:15,840 --> 00:29:19,880
Speaker 1: part two. It is time to it's time to sort

485
00:29:19,880 --> 00:29:22,600
Speaker 1: of go back just a few days now, it feels

486
00:29:22,640 --> 00:29:25,320
Speaker 1: like much longer, but a few days, a couple of

487
00:29:25,320 --> 00:29:30,640
Speaker 1: weeks to how this how the how everything started to

488
00:29:30,680 --> 00:29:34,680
Speaker 1: go downhill. We know now that that Alameda had lost

489
00:29:34,760 --> 00:29:37,560
Speaker 1: a lot of money in terrorist collapse. It was in

490
00:29:37,640 --> 00:29:41,880
Speaker 1: a lot of trouble and Sam Bankman Freed SPF was

491
00:29:42,120 --> 00:29:47,800
Speaker 1: propping this company up with user funds from f t X. Now.

492
00:29:47,840 --> 00:29:51,440
Speaker 1: On the second of November, Coin Desk, which is a

493
00:29:51,560 --> 00:29:55,200
Speaker 1: you know, a big industry website, big crypto industry website,

494
00:29:55,760 --> 00:30:00,240
Speaker 1: it published an article which about a leaked Alameda Search

495
00:30:00,320 --> 00:30:04,280
Speaker 1: balance sheet that it had that it had received. And

496
00:30:04,760 --> 00:30:08,160
Speaker 1: this balance sheet did not make for good reading and

497
00:30:08,600 --> 00:30:12,120
Speaker 1: basically it revealed that Alameda had a ton of money

498
00:30:12,400 --> 00:30:19,160
Speaker 1: in lots of very illiquid ship coins. So it was,

499
00:30:19,320 --> 00:30:21,560
Speaker 1: you know, it was it was a warning sign that

500
00:30:21,760 --> 00:30:24,640
Speaker 1: all was not well at Alameda and that you know,

501
00:30:24,720 --> 00:30:29,360
Speaker 1: if if it suffered a liquidity crisis, you know, if

502
00:30:29,520 --> 00:30:33,240
Speaker 1: you know, if if people start started wanting their money back,

503
00:30:34,120 --> 00:30:36,080
Speaker 1: then it was going to have a lot of problems,

504
00:30:36,200 --> 00:30:38,800
Speaker 1: you know. And obviously a lot of these ship coins

505
00:30:38,840 --> 00:30:41,680
Speaker 1: that invested in were right down in price. And again

506
00:30:41,720 --> 00:30:44,280
Speaker 1: this is you know, this is spillover from from terror

507
00:30:44,320 --> 00:30:47,360
Speaker 1: and everything that happened in the wake of that. So

508
00:30:47,520 --> 00:30:51,800
Speaker 1: this kind of set alarm bells ringing. Now I want

509
00:30:51,800 --> 00:30:55,840
Speaker 1: to go even further back in time because and this

510
00:30:55,880 --> 00:30:59,640
Speaker 1: is the sort when ft X was founded. As we know,

511
00:31:00,040 --> 00:31:02,280
Speaker 1: Bankman freed and made a lot of money. Him and

512
00:31:02,320 --> 00:31:04,760
Speaker 1: Alimeter Research had made a lot of money kind of trading,

513
00:31:04,920 --> 00:31:07,240
Speaker 1: you know, starting off with this arbitrage trade between the

514
00:31:07,280 --> 00:31:09,880
Speaker 1: U S and Japan. They built that up, they had

515
00:31:09,920 --> 00:31:12,080
Speaker 1: a lot of money, and they kind of realized that

516
00:31:12,120 --> 00:31:14,719
Speaker 1: the way to go, the next step if you like

517
00:31:15,160 --> 00:31:19,120
Speaker 1: to make real money, was to open an exchange. So

518
00:31:19,320 --> 00:31:22,720
Speaker 1: this is what they decided to do. And one of

519
00:31:22,800 --> 00:31:29,600
Speaker 1: their earliest backers was none other than Binance. Now. Binance,

520
00:31:29,840 --> 00:31:35,120
Speaker 1: as as everyone should know, is the largest cryptocurrency exchange

521
00:31:35,240 --> 00:31:39,920
Speaker 1: in the world. Um it has. Yeah, it is a hugely,

522
00:31:40,120 --> 00:31:44,000
Speaker 1: hugely powerful organization, the most active users, the most you know,

523
00:31:44,120 --> 00:31:46,840
Speaker 1: the most daily volume. It is. It is a beast

524
00:31:46,960 --> 00:31:50,400
Speaker 1: of a company. And so Binance put in put in

525
00:31:50,440 --> 00:31:53,080
Speaker 1: a lot of money to help get f t X

526
00:31:53,120 --> 00:31:56,200
Speaker 1: off the ground, and f t X sort of it

527
00:31:56,320 --> 00:32:00,000
Speaker 1: started and you know, didn't didn't sort of go anywhere

528
00:32:00,080 --> 00:32:04,040
Speaker 1: spectacular for the first few months or so, but then

529
00:32:04,160 --> 00:32:08,240
Speaker 1: kind of came along. Obviously we had a pandemic, everyone

530
00:32:08,360 --> 00:32:11,640
Speaker 1: kind of got interested in crypto, and then we had,

531
00:32:11,680 --> 00:32:13,600
Speaker 1: you know, all this kind of interest and ft X

532
00:32:13,680 --> 00:32:16,240
Speaker 1: sort of grew and grew. It kind of grew exponentially,

533
00:32:17,320 --> 00:32:20,920
Speaker 1: and it did particularly well out of out of what

534
00:32:21,000 --> 00:32:24,280
Speaker 1: was called DeFi summer back last year, back twenty one,

535
00:32:24,280 --> 00:32:27,000
Speaker 1: when all these de FI protocols, many of which IT

536
00:32:27,120 --> 00:32:29,560
Speaker 1: and Alameda were invested in, when they kind of really

537
00:32:29,600 --> 00:32:33,080
Speaker 1: took off. And and yeah, fd X kind of grew

538
00:32:33,160 --> 00:32:38,600
Speaker 1: from this kind of new upstart exchange to become you know,

539
00:32:38,640 --> 00:32:41,000
Speaker 1: I think it kind of it sometimes varied between it

540
00:32:41,040 --> 00:32:43,240
Speaker 1: and coin base but basically, you know, the the second

541
00:32:43,280 --> 00:32:47,080
Speaker 1: largest exchange, second or third largest exchange in the world,

542
00:32:47,160 --> 00:32:51,880
Speaker 1: second really only to to Finance. Finance obviously, and you know,

543
00:32:51,880 --> 00:32:55,320
Speaker 1: it was kind of early investor, but I think you know,

544
00:32:55,400 --> 00:32:59,240
Speaker 1: as as ft X got bigger, obviously it became more

545
00:32:59,320 --> 00:33:03,160
Speaker 1: of a rival to Binance. But what sort of seems

546
00:33:03,200 --> 00:33:06,000
Speaker 1: to have really kind of set the bad blood between

547
00:33:06,040 --> 00:33:09,160
Speaker 1: them flowing was the fact that SBF is now known

548
00:33:09,240 --> 00:33:15,120
Speaker 1: to have been basically bad mouthing Binance and Chang Pen

549
00:33:15,320 --> 00:33:20,360
Speaker 1: Chang Peng Jao, who's Finances CEO CZ basically bad mouthing

550
00:33:20,760 --> 00:33:26,200
Speaker 1: them behind their backs to his powerful contacts in Washington.

551
00:33:27,320 --> 00:33:30,200
Speaker 1: And I think it was you know, it was basically

552
00:33:30,200 --> 00:33:34,280
Speaker 1: meant to kind of put regulators onto Binance and off

553
00:33:34,800 --> 00:33:37,800
Speaker 1: and basically off f t X and try and basically

554
00:33:38,080 --> 00:33:42,240
Speaker 1: being regulators to try and and draft favorable regulations that

555
00:33:42,320 --> 00:33:44,840
Speaker 1: you know that would work for f f t X

556
00:33:45,560 --> 00:33:49,640
Speaker 1: but would be unfavorable for Binance. And that it's fair

557
00:33:49,680 --> 00:33:53,680
Speaker 1: to say that finance is not the most popular platform

558
00:33:53,760 --> 00:33:56,960
Speaker 1: with regulators because it's you know, it's spread, it doesn't

559
00:33:56,960 --> 00:34:01,840
Speaker 1: have a global headquarters, um it's spread over over many

560
00:34:02,080 --> 00:34:06,680
Speaker 1: different jurisdictions, and you know, it's it's wildly successful, so

561
00:34:06,800 --> 00:34:09,719
Speaker 1: it's kind of it's natural. I think it's it's not

562
00:34:09,800 --> 00:34:12,800
Speaker 1: all that surprising that regulators were kind of pretty suspicious

563
00:34:12,800 --> 00:34:14,759
Speaker 1: of it anyway, and it's had, you know, it's had

564
00:34:14,760 --> 00:34:17,320
Speaker 1: its fair few run ins with regulators, although I should

565
00:34:17,320 --> 00:34:20,000
Speaker 1: say like it's taken you know, it's taken a lot

566
00:34:20,040 --> 00:34:23,279
Speaker 1: of steps to you know, to jump through the necessary

567
00:34:23,320 --> 00:34:30,320
Speaker 1: regulatory hoops. Anyhow, um So, SBF was reportedly lobbying against

568
00:34:30,320 --> 00:34:35,640
Speaker 1: Binance behind the scenes, and he was also suspected of

569
00:34:36,120 --> 00:34:38,800
Speaker 1: f t X and him were suspected of being behind

570
00:34:39,160 --> 00:34:44,200
Speaker 1: leaks about Binance to kind of mainstream to the mainstream media,

571
00:34:44,239 --> 00:34:46,400
Speaker 1: and there were as kind of a string of hit

572
00:34:46,480 --> 00:34:50,560
Speaker 1: pieces sort of you know, this year and before published

573
00:34:50,600 --> 00:34:55,240
Speaker 1: about Finance and about CZ in general. And what became

574
00:34:55,400 --> 00:34:59,160
Speaker 1: what was very odd was that Finance had both both

575
00:34:59,160 --> 00:35:02,560
Speaker 1: Finance and t X had U S subsidiaries. So Binance

576
00:35:02,560 --> 00:35:04,520
Speaker 1: had Finance U S F t x F t X

577
00:35:04,640 --> 00:35:09,839
Speaker 1: US and the head of Binance US was a chap

578
00:35:09,880 --> 00:35:15,920
Speaker 1: called Brian Brooks, and he only lasted about four months

579
00:35:16,160 --> 00:35:19,040
Speaker 1: and then a while back kind of resigned very suddenly.

580
00:35:19,200 --> 00:35:21,120
Speaker 1: And it was it was a bit of a big

581
00:35:21,160 --> 00:35:25,560
Speaker 1: surprise to everyone. Anyhow, it later becomes clear that Brian

582
00:35:25,640 --> 00:35:29,680
Speaker 1: Brooks has very very close ties to f t X,

583
00:35:30,040 --> 00:35:33,640
Speaker 1: and he apparently attended you know, sort of at least one,

584
00:35:33,719 --> 00:35:37,120
Speaker 1: maybe maybe even more ft X events sort of very

585
00:35:37,160 --> 00:35:42,480
Speaker 1: shortly after leaving Finance US. Anyhow, So, as you can imagine,

586
00:35:43,000 --> 00:35:46,040
Speaker 1: not only are these two exchanges kind of locked in

587
00:35:46,200 --> 00:35:50,320
Speaker 1: a lot of rivalry, but Binance and CS are becoming,

588
00:35:50,480 --> 00:35:52,880
Speaker 1: you know, increasingly piste off about the fact that that

589
00:35:53,000 --> 00:35:56,200
Speaker 1: f t X is is lobbying against them behind the scenes,

590
00:35:56,640 --> 00:36:00,439
Speaker 1: author investing in them heavily initially. Yeah, so there's the kind, yeah,

591
00:36:00,560 --> 00:36:03,480
Speaker 1: the added kind of element of betrayal, I guess if

592
00:36:03,520 --> 00:36:06,160
Speaker 1: you like. But that's very important. We've got to remember

593
00:36:06,200 --> 00:36:10,200
Speaker 1: that because this is this is kind of key to

594
00:36:10,320 --> 00:36:13,200
Speaker 1: what happened next, the fact that Finance was a big

595
00:36:13,200 --> 00:36:17,960
Speaker 1: investor in f t X. So um. And also I

596
00:36:18,000 --> 00:36:20,920
Speaker 1: think these these kind of hit pieces on Binance, they

597
00:36:21,040 --> 00:36:23,439
Speaker 1: really reached a low point not that long ago when

598
00:36:23,640 --> 00:36:27,600
Speaker 1: when Reuters published a number of pieces that were very

599
00:36:27,640 --> 00:36:30,520
Speaker 1: critical of Finance and CZ but also kind of mentioned

600
00:36:30,600 --> 00:36:33,840
Speaker 1: c Z's children as well in at least one of

601
00:36:33,840 --> 00:36:38,839
Speaker 1: the articles. And you know that again, like you don't

602
00:36:38,880 --> 00:36:40,440
Speaker 1: need to be a journalist, you don't need to be

603
00:36:40,480 --> 00:36:43,600
Speaker 1: an expert on on these things to know that you

604
00:36:43,600 --> 00:36:46,280
Speaker 1: you don't go after you don't go after people's children.

605
00:36:46,320 --> 00:36:48,960
Speaker 1: That is just I mean, are they still children or

606
00:36:49,000 --> 00:36:52,080
Speaker 1: are they adults working in the industry. No, they are,

607
00:36:52,160 --> 00:36:56,279
Speaker 1: they're they're they're toddlers, I believe. Oh, well that's just yeah,

608
00:36:56,400 --> 00:37:00,719
Speaker 1: that's that's that's yeah, it's just yeah, it's it's it's

609
00:37:00,760 --> 00:37:04,279
Speaker 1: just not right. So, as you can imagine, CZ by

610
00:37:04,280 --> 00:37:07,960
Speaker 1: this point is is not a happy matter. Yeah, and

611
00:37:07,960 --> 00:37:10,920
Speaker 1: and who can blame him? Now, going back to the

612
00:37:10,960 --> 00:37:16,440
Speaker 1: fact that Finance was an early investor in f t X,

613
00:37:17,280 --> 00:37:20,920
Speaker 1: Finance now f t X once it has sort of

614
00:37:20,960 --> 00:37:26,480
Speaker 1: I think it was twenty twenty if I remember rightly, Uh,

615
00:37:28,719 --> 00:37:32,160
Speaker 1: and it was one f t X decided that it

616
00:37:32,280 --> 00:37:34,480
Speaker 1: kind of wanted to sort of, you know, part ways

617
00:37:34,560 --> 00:37:40,360
Speaker 1: with Finance. So basically, SPF negotiated to buy back those

618
00:37:40,480 --> 00:37:43,200
Speaker 1: f t X shares that Finance had, you know, had

619
00:37:43,239 --> 00:37:46,800
Speaker 1: invested in, that that Finance owned from its initial investment

620
00:37:46,800 --> 00:37:51,240
Speaker 1: back in and so in return for these shares, in

621
00:37:51,239 --> 00:37:53,200
Speaker 1: in return for kind of selling at stake in f

622
00:37:53,280 --> 00:37:57,279
Speaker 1: t X. Finance got a mixture of b U s D,

623
00:37:57,520 --> 00:38:02,360
Speaker 1: which is that Binance his own stable corps and um.

624
00:38:02,440 --> 00:38:04,719
Speaker 1: So it got about one point five billion dollars worth

625
00:38:04,719 --> 00:38:08,640
Speaker 1: of b U s D and it got five eight

626
00:38:08,760 --> 00:38:13,120
Speaker 1: million dollars of f t T. Now f t T

627
00:38:14,440 --> 00:38:19,680
Speaker 1: is f t X is exchange token. Okay, so this

628
00:38:19,920 --> 00:38:25,279
Speaker 1: is this is very important to remember. Basically, Finance, this

629
00:38:25,440 --> 00:38:30,040
Speaker 1: rival exchange that is piste off with the way that

630
00:38:30,440 --> 00:38:33,680
Speaker 1: SPF and f t X have been behaving, has a

631
00:38:33,760 --> 00:38:36,920
Speaker 1: large tonk and has an influence on on what what

632
00:38:36,960 --> 00:38:38,600
Speaker 1: happens at f t X. Does that does that know

633
00:38:38,600 --> 00:38:41,000
Speaker 1: what it means? Well, not so much an influence on

634
00:38:41,040 --> 00:38:43,680
Speaker 1: what happens at f t X, but it has the

635
00:38:43,880 --> 00:38:47,600
Speaker 1: it has the ability to crash the price of f

636
00:38:47,760 --> 00:38:53,239
Speaker 1: t T and this, oh what happened. So um let

637
00:38:53,239 --> 00:38:55,120
Speaker 1: me just get let me just make sure that I

638
00:38:55,120 --> 00:38:58,239
Speaker 1: get the dates right. Anyhow, So around about sort of

639
00:38:58,520 --> 00:39:00,839
Speaker 1: you know, early November, we are by now I think

640
00:39:00,840 --> 00:39:03,640
Speaker 1: this is about the fourth or fifth of November, this

641
00:39:03,719 --> 00:39:07,920
Speaker 1: speculation starts to mount that Binance is looking to sell

642
00:39:08,680 --> 00:39:11,480
Speaker 1: its stake of f t T. And this is a

643
00:39:11,560 --> 00:39:16,320
Speaker 1: round if you remember, around million dollars worth and ft

644
00:39:16,480 --> 00:39:20,959
Speaker 1: T is you know, it has m As other people

645
00:39:21,000 --> 00:39:23,400
Speaker 1: have pointed out, you know before the fact, it didn't

646
00:39:23,480 --> 00:39:27,520
Speaker 1: take an awful lot of ft T selling to crash

647
00:39:27,560 --> 00:39:31,560
Speaker 1: the price. So just the room that Binance was looking

648
00:39:31,600 --> 00:39:36,000
Speaker 1: to offload this massive amount of ft T was enough

649
00:39:36,360 --> 00:39:41,520
Speaker 1: to send f T T s price heading south. Okay, now,

650
00:39:42,160 --> 00:39:46,680
Speaker 1: what's what becase. What was odd is that on the

651
00:39:46,760 --> 00:39:51,200
Speaker 1: sixth of November, Caroline Ellison, who as you remember, dated

652
00:39:51,320 --> 00:39:56,799
Speaker 1: SPF and was CEO of Alameda Research. Caroline tweeted out

653
00:39:57,200 --> 00:40:01,200
Speaker 1: directly at CZ Binance, if you'll look to minimize the

654
00:40:01,239 --> 00:40:06,440
Speaker 1: market impact of your ft T sales, Alameda will happily

655
00:40:06,480 --> 00:40:11,160
Speaker 1: buy it all from you today at two dollars. Now,

656
00:40:12,280 --> 00:40:18,360
Speaker 1: this is a very weird and very stupid thing to

657
00:40:18,600 --> 00:40:24,200
Speaker 1: have done, because firstly, it suggests that you know, Alameda

658
00:40:24,440 --> 00:40:28,680
Speaker 1: is is very kind of nervous about, you know, about

659
00:40:28,719 --> 00:40:32,640
Speaker 1: these sales of of f T T and and that's

660
00:40:32,640 --> 00:40:37,120
Speaker 1: a price exactly, it's set right, and that tells the

661
00:40:37,200 --> 00:40:44,680
Speaker 1: market hang on the set. If ft T goes below dollars,

662
00:40:45,560 --> 00:40:51,600
Speaker 1: we got ourselves, you know, we got ourselves a you know, yeah,

663
00:40:51,640 --> 00:40:55,160
Speaker 1: we've got ourselves a blood bath. So or if it's

664
00:40:55,200 --> 00:40:58,520
Speaker 1: at thirty dollars at the moment, and they're they're valuing

665
00:40:58,520 --> 00:41:01,200
Speaker 1: it and they'll go, we'll buy it at around this price.

666
00:41:01,840 --> 00:41:04,560
Speaker 1: It was like, well, it's not worth that, then that's

667
00:41:04,560 --> 00:41:10,160
Speaker 1: what it's Worth's kind of just telegraphing what Yeah, a

668
00:41:10,440 --> 00:41:16,719
Speaker 1: very very weird thing to do. So, as you can imagine,

669
00:41:16,800 --> 00:41:19,760
Speaker 1: at this point, the market stuff, you know, the market,

670
00:41:19,880 --> 00:41:23,000
Speaker 1: and this is like for all the for all the

671
00:41:23,120 --> 00:41:26,200
Speaker 1: kind of chaos that is unleashed, for all the you know,

672
00:41:26,440 --> 00:41:29,879
Speaker 1: all the all the difficulties this has caused. To put

673
00:41:29,920 --> 00:41:33,880
Speaker 1: it mildly, like, this is a great example of the

674
00:41:33,960 --> 00:41:38,359
Speaker 1: free market in action. You know, markets just have this

675
00:41:38,800 --> 00:41:43,440
Speaker 1: ability to sniff out weakness. So this basically, you know,

676
00:41:44,200 --> 00:41:49,000
Speaker 1: the spect especially when it's tweeted, tweeted out, when it's

677
00:41:49,000 --> 00:41:51,719
Speaker 1: there for everyone to see. It's like, hey, you know,

678
00:41:52,120 --> 00:41:55,400
Speaker 1: I've I've had some tweets that I've gone back and gone, oh,

679
00:41:55,440 --> 00:41:57,320
Speaker 1: I wish I hadn't said that, do you know what

680
00:41:57,360 --> 00:41:59,759
Speaker 1: I mean? Like, you've said something tried to crack a

681
00:41:59,840 --> 00:42:04,480
Speaker 1: Joe called maybe mega of off remark and you know,

682
00:42:04,800 --> 00:42:08,880
Speaker 1: did that upset someone did that? But I've never collapsed

683
00:42:09,280 --> 00:42:14,920
Speaker 1: a financial exchange with a tweet. Um, that's got to

684
00:42:14,960 --> 00:42:18,080
Speaker 1: be a bad day on Twitter for you. There's still

685
00:42:18,080 --> 00:42:22,200
Speaker 1: time for you, Mike. You know, maybe maybe the next

686
00:42:22,239 --> 00:42:24,920
Speaker 1: stage of your checkered career could be the one day

687
00:42:24,920 --> 00:42:29,160
Speaker 1: crash cross it off the bucket list. Just yet, this

688
00:42:29,239 --> 00:42:32,440
Speaker 1: is crypto, so literally that that is that is not

689
00:42:33,239 --> 00:42:35,680
Speaker 1: that is not on the realms of possibility that you

690
00:42:35,680 --> 00:42:37,960
Speaker 1: could one day find yourself in charge of a major

691
00:42:38,000 --> 00:42:43,200
Speaker 1: exchange and and crash it with another. Hey, I'm prepared

692
00:42:43,400 --> 00:42:47,480
Speaker 1: to date or sleep with any of you CEOs c

693
00:42:47,680 --> 00:42:50,840
Speaker 1: Z if you like, if you like some bare action,

694
00:42:51,640 --> 00:42:55,799
Speaker 1: I'm your man. We're in a bear market, so it's

695
00:42:55,840 --> 00:42:59,640
Speaker 1: apt let's do this. Well. I never thought i'd say this,

696
00:42:59,680 --> 00:43:03,480
Speaker 1: but I certainly hopes CZ isn't listening or paying attention

697
00:43:03,920 --> 00:43:08,719
Speaker 1: her to this particular episode jealousy. I just yeah, I mean,

698
00:43:10,080 --> 00:43:12,400
Speaker 1: I don't take my muchie away, don't don't do this,

699
00:43:12,440 --> 00:43:16,080
Speaker 1: don't pimp yourself out to the nearest billionaire exchange owner.

700
00:43:16,120 --> 00:43:20,640
Speaker 1: How could you obviously this, um, you know, this kind

701
00:43:20,640 --> 00:43:23,239
Speaker 1: of set the markets off, and there was a lot

702
00:43:23,280 --> 00:43:26,040
Speaker 1: of short selling of f t T and the and

703
00:43:26,160 --> 00:43:29,680
Speaker 1: the price started to started to go down. Now, the

704
00:43:29,800 --> 00:43:32,400
Speaker 1: question that was on a lot of people's minds is

705
00:43:32,600 --> 00:43:37,120
Speaker 1: you know, why are why is al Ameter so desperate

706
00:43:37,600 --> 00:43:39,520
Speaker 1: to you know, to prop up the price of f

707
00:43:39,640 --> 00:43:44,680
Speaker 1: t T. And what it basically came down to is

708
00:43:44,960 --> 00:43:48,279
Speaker 1: the fact that people the market kind of sniffed out

709
00:43:48,520 --> 00:43:52,759
Speaker 1: that Lameter and quite possibly f t X. We're basically

710
00:43:53,000 --> 00:43:58,040
Speaker 1: using f t T as collateral for for crypto loans,

711
00:43:58,040 --> 00:44:00,920
Speaker 1: for loans that they had taken out, and they were

712
00:44:00,960 --> 00:44:03,719
Speaker 1: now worried that as the value of their collateral was

713
00:44:03,800 --> 00:44:07,919
Speaker 1: falling their loan they could defaulting. Yeah, would they would

714
00:44:07,920 --> 00:44:12,200
Speaker 1: basically get liquidated and lose everything. So if you like,

715
00:44:12,360 --> 00:44:14,680
Speaker 1: I mean, I think probably the best analogy here is

716
00:44:14,719 --> 00:44:17,000
Speaker 1: to just look at the you know, look at f

717
00:44:17,120 --> 00:44:21,000
Speaker 1: t X and Alameda. This whole setup as basically being

718
00:44:21,120 --> 00:44:24,919
Speaker 1: a kind of house of cards, and c Z has

719
00:44:25,000 --> 00:44:28,239
Speaker 1: just sort of whipped out, you know, or you know,

720
00:44:28,320 --> 00:44:31,160
Speaker 1: Binance has just kind of whipped or whipped out one

721
00:44:31,160 --> 00:44:35,439
Speaker 1: of the cards on the bottom, and everything is looking decidedly,

722
00:44:36,000 --> 00:44:43,840
Speaker 1: decidedly dodgy, flimsy. Now, seventh of November is when things

723
00:44:44,440 --> 00:44:47,080
Speaker 1: really started to kick off. And this again, this is

724
00:44:47,120 --> 00:44:49,080
Speaker 1: a this is a tweet from CZ and I think

725
00:44:49,800 --> 00:44:54,160
Speaker 1: I don't think it's kind of over overstating things to

726
00:44:54,280 --> 00:44:57,400
Speaker 1: say that this may go down as one of the

727
00:44:57,400 --> 00:45:03,680
Speaker 1: most sort of consequential earth shattering tweets in all of cryptohistory.

728
00:45:04,560 --> 00:45:08,520
Speaker 1: Quote this is cz Binance tweeting on the seventh of

729
00:45:08,600 --> 00:45:13,840
Speaker 1: November two. Liquidating our ft T is just post exit

730
00:45:14,040 --> 00:45:19,880
Speaker 1: risk management, learning from Lunar. We gave support before, but

731
00:45:19,920 --> 00:45:23,520
Speaker 1: we won't pretend to make love after divorce. We are

732
00:45:23,560 --> 00:45:27,680
Speaker 1: not against anyone, but we won't support people who lobby

733
00:45:27,760 --> 00:45:35,000
Speaker 1: against other industry players behind their backs onwards. So there's

734
00:45:35,040 --> 00:45:37,959
Speaker 1: a few things to unpack there. Basically, liquidating our ft

735
00:45:38,040 --> 00:45:41,200
Speaker 1: T is just post exit risk management. That is, you know,

736
00:45:41,360 --> 00:45:44,880
Speaker 1: casting casting doubts on you know, basically saying we're planning

737
00:45:44,920 --> 00:45:48,239
Speaker 1: to sell this FTT, so fi million dollars worth of

738
00:45:48,239 --> 00:45:51,959
Speaker 1: this is about to potentially hit the market. Um, we're

739
00:45:52,000 --> 00:45:55,400
Speaker 1: managing our risk, which suggests a lack of confidence in

740
00:45:55,480 --> 00:45:58,720
Speaker 1: f t X. And I think that really telling phrase

741
00:45:58,800 --> 00:46:03,440
Speaker 1: here is learning from Luna. So this is casting everyone's

742
00:46:03,480 --> 00:46:06,400
Speaker 1: minds back to what happened with terror, to what happened

743
00:46:06,440 --> 00:46:10,360
Speaker 1: with its Lunar coin and it's ust stable coin. And

744
00:46:10,400 --> 00:46:13,360
Speaker 1: you remember these two were kind of closely close a

745
00:46:13,480 --> 00:46:18,160
Speaker 1: created So I think by saying learning from Luna, and

746
00:46:18,520 --> 00:46:20,480
Speaker 1: as I said in a video we made about it's

747
00:46:20,480 --> 00:46:25,640
Speaker 1: sort of last week this, I don't think that lunar

748
00:46:25,719 --> 00:46:28,680
Speaker 1: thing just slipped out, you know. I think that was

749
00:46:28,719 --> 00:46:32,719
Speaker 1: obviously very very calculated, obviously set everyone's minds back to

750
00:46:33,200 --> 00:46:36,520
Speaker 1: May and what happened there. Um, And just to just

751
00:46:36,560 --> 00:46:39,080
Speaker 1: to sort of, you know, contextualize the rest of the tweet.

752
00:46:39,120 --> 00:46:41,120
Speaker 1: We gave support before, but we won't pretend to make

753
00:46:41,120 --> 00:46:43,239
Speaker 1: love after divorce. We're not against anyone, but we won't

754
00:46:43,239 --> 00:46:46,480
Speaker 1: support people who lobby against other industry players behind their backs.

755
00:46:46,840 --> 00:46:48,880
Speaker 1: You know, this is a real kind of mic drop

756
00:46:48,880 --> 00:46:53,160
Speaker 1: of a tweet. It's like, okay, you you bad mouth us,

757
00:46:53,400 --> 00:46:56,760
Speaker 1: You say nasty things about us two regulators. You put

758
00:46:56,800 --> 00:47:00,080
Speaker 1: the mainstream media onto me, you brief against me, and

759
00:47:00,280 --> 00:47:04,680
Speaker 1: you know you and results in articles that make reference

760
00:47:04,719 --> 00:47:07,399
Speaker 1: to my children. You do all of them. Well, sir,

761
00:47:09,040 --> 00:47:14,960
Speaker 1: it's my move now. Yeah. It's reminiscent of Whitey Boulger.

762
00:47:15,239 --> 00:47:19,439
Speaker 1: Do you remember him, the Boston's or Matthiosa He kind

763
00:47:19,480 --> 00:47:25,200
Speaker 1: of he he had ties with the law enforcement and

764
00:47:25,239 --> 00:47:29,600
Speaker 1: basically had carte blanche and was basically giving up other

765
00:47:29,680 --> 00:47:34,560
Speaker 1: I'm not suggesting that ba is Matthiosa or anything like that,

766
00:47:34,719 --> 00:47:39,720
Speaker 1: but they were sort of inhuts with with the government

767
00:47:39,880 --> 00:47:43,959
Speaker 1: or the government's law agencies. And then when the other

768
00:47:44,080 --> 00:47:48,000
Speaker 1: sort of players in that market found out, it did

769
00:47:48,040 --> 00:47:51,120
Speaker 1: not end well. Yeah, for Whitey Boulger. Yeah, well, I

770
00:47:51,160 --> 00:47:54,560
Speaker 1: mean I think the I think the comparison between you know,

771
00:47:54,600 --> 00:47:57,439
Speaker 1: with Whitey Boulger is between him and SPF really because

772
00:47:57,480 --> 00:48:00,600
Speaker 1: remember SPF was the guy with all the times you know,

773
00:48:01,200 --> 00:48:04,160
Speaker 1: sees as well known, as well known a figure as

774
00:48:04,200 --> 00:48:06,080
Speaker 1: he is. You know, I don't think has the same

775
00:48:06,120 --> 00:48:09,520
Speaker 1: sort of hasn't cultivated the same sort of connections, and

776
00:48:09,560 --> 00:48:11,439
Speaker 1: you know he's not that he's not as the same

777
00:48:11,520 --> 00:48:15,640
Speaker 1: kind of uh you know, well connected. Do that well

778
00:48:15,640 --> 00:48:20,040
Speaker 1: connected American that Sam bank Man Freed is so, yeah,

779
00:48:20,120 --> 00:48:23,880
Speaker 1: you know, second largest donator to to the Bieren administration. Yeah,

780
00:48:23,920 --> 00:48:28,560
Speaker 1: that that that opened some doors and and facilitates some conversations.

781
00:48:28,600 --> 00:48:31,279
Speaker 1: Absolutely absolutely, And this is stuff that is kind of

782
00:48:31,600 --> 00:48:36,000
Speaker 1: just reverberating all around the you know, the crypto Twitter

783
00:48:36,080 --> 00:48:38,920
Speaker 1: sphere at the moment, you know, And I mean, well,

784
00:48:38,920 --> 00:48:40,920
Speaker 1: well we'll get to that. Let's let's just I just

785
00:48:40,960 --> 00:48:43,759
Speaker 1: want to kind of talk through what happened with the

786
00:48:44,000 --> 00:48:46,360
Speaker 1: you know, what happened next as it were, so sees

787
00:48:46,400 --> 00:48:49,000
Speaker 1: he puts out this, you know this this tweet, I

788
00:48:49,000 --> 00:48:53,560
Speaker 1: mean this obviously sets So this basically started a bank run.

789
00:48:53,560 --> 00:48:56,120
Speaker 1: And again this is what happens, you know, and and

790
00:48:56,120 --> 00:49:01,160
Speaker 1: and you know, as people as people saw f t

791
00:49:01,200 --> 00:49:05,880
Speaker 1: t S price going down, that triggers a crisis of confidence.

792
00:49:06,000 --> 00:49:09,520
Speaker 1: So people started going, well, ftt you know, that shows

793
00:49:09,560 --> 00:49:12,000
Speaker 1: that all is not well at f t X. So

794
00:49:12,719 --> 00:49:15,920
Speaker 1: sensible people started going, Okay, I'm going to get my

795
00:49:15,960 --> 00:49:18,279
Speaker 1: money out. You know, I'm gonna I'm gonna withdraw my

796
00:49:18,320 --> 00:49:21,279
Speaker 1: funds from ft X, you know obviously, and again like

797
00:49:21,360 --> 00:49:23,440
Speaker 1: this is why this is why I think CZ's reference

798
00:49:23,480 --> 00:49:26,839
Speaker 1: to lunar is so important, because you know, it just

799
00:49:26,880 --> 00:49:30,600
Speaker 1: says like it just suggests like this, this could be bad. Folks,

800
00:49:30,719 --> 00:49:33,560
Speaker 1: we all remember what happened. They're like, don't get caught out.

801
00:49:33,600 --> 00:49:38,719
Speaker 1: So basically a bank run is is what started. And

802
00:49:39,080 --> 00:49:42,319
Speaker 1: people started, you know, withdrawing their funds from f t X,

803
00:49:42,840 --> 00:49:47,440
Speaker 1: and it basically kind of snowballed from there and the

804
00:49:47,520 --> 00:49:50,759
Speaker 1: rumors started circulating. And this is where things get. This

805
00:49:50,800 --> 00:49:54,080
Speaker 1: is where things get kind of really tricky. And I remember,

806
00:49:54,520 --> 00:49:57,359
Speaker 1: again it just feels like so long ago. Now it's

807
00:49:57,400 --> 00:49:59,360
Speaker 1: only about a week ago. But you know, I remember

808
00:49:59,400 --> 00:50:02,440
Speaker 1: seeing these rumors about about f t X, you know,

809
00:50:02,520 --> 00:50:04,319
Speaker 1: hearing this stuff on Twitter that f t X is

810
00:50:04,320 --> 00:50:08,080
Speaker 1: in trouble, and you think, I mean, is this true?

811
00:50:08,320 --> 00:50:12,160
Speaker 1: Like can it be true? Like this is a huge exchange.

812
00:50:13,200 --> 00:50:15,759
Speaker 1: Is it possible? Like, surely not. And we were having

813
00:50:15,840 --> 00:50:18,640
Speaker 1: these discussions here at coin Bureau between colleagues and some

814
00:50:18,680 --> 00:50:21,680
Speaker 1: people were like, I think, you know, it looks bad.

815
00:50:21,760 --> 00:50:24,520
Speaker 1: And other people were like, this is ft X. This

816
00:50:24,600 --> 00:50:27,480
Speaker 1: is a huge company. It's the company with its name

817
00:50:27,960 --> 00:50:31,319
Speaker 1: on a on you know, the Miami heat Stadium. You

818
00:50:31,360 --> 00:50:34,879
Speaker 1: know this, this is a company. It's CEO has got

819
00:50:34,920 --> 00:50:39,640
Speaker 1: ties to the Biden administration. You know that surely not. Anyhow,

820
00:50:40,520 --> 00:50:43,719
Speaker 1: this bank run sort of turned into a you know,

821
00:50:43,880 --> 00:50:48,360
Speaker 1: into a stampede, and it became, you know, it became

822
00:50:48,400 --> 00:50:51,640
Speaker 1: clear that that f t X didn't have the funds

823
00:50:51,680 --> 00:50:56,239
Speaker 1: on hand in order to meet to meet these withdrawal obligations,

824
00:50:56,520 --> 00:51:00,399
Speaker 1: and this just you know, this got worse and worse

825
00:51:00,400 --> 00:51:04,000
Speaker 1: and worse, and so the unthinkable happened. And I remember

826
00:51:04,040 --> 00:51:06,080
Speaker 1: so this. So this takes us kind of to the

827
00:51:06,280 --> 00:51:09,440
Speaker 1: to the eighth of November, and I think, you know,

828
00:51:09,520 --> 00:51:15,320
Speaker 1: at one point, I think it was on the Sunday afternoon, Sunday, Sunday,

829
00:51:15,520 --> 00:51:17,600
Speaker 1: the Sunday before last. You know, I think about a

830
00:51:17,640 --> 00:51:20,000
Speaker 1: billion dollars have been withdrawn from f t X. By

831
00:51:20,040 --> 00:51:23,520
Speaker 1: the evening it was sort of north of six billion dollars.

832
00:51:23,719 --> 00:51:27,120
Speaker 1: You know, there was just people panic withdrawing. This takes

833
00:51:27,160 --> 00:51:28,640
Speaker 1: us out and we'll we'll have a we'll take a

834
00:51:28,719 --> 00:51:31,520
Speaker 1: quick break after this. This takes us up to the

835
00:51:31,560 --> 00:51:36,520
Speaker 1: next sort of absolute bomb drop tweet from cz and

836
00:51:36,560 --> 00:51:39,600
Speaker 1: this is the eighth of November quote. This afternoon, f

837
00:51:39,760 --> 00:51:42,160
Speaker 1: t X asked for our help. There is a significant

838
00:51:42,200 --> 00:51:46,800
Speaker 1: liquidity crunch. To protect users, we signed a non binding

839
00:51:47,000 --> 00:51:50,640
Speaker 1: l o I that stands for letter of intent intending

840
00:51:50,800 --> 00:51:55,120
Speaker 1: to fully acquire f t X dot com and help

841
00:51:55,239 --> 00:51:58,880
Speaker 1: cover the liquidity crunch. We will be conducting a full

842
00:51:59,040 --> 00:52:04,000
Speaker 1: d D due diligence in the coming days. And this

843
00:52:04,360 --> 00:52:10,360
Speaker 1: was confirmed by SPF himself on Twitter, you know, around

844
00:52:10,360 --> 00:52:13,319
Speaker 1: the same time. Basically, yeah, you know, this is what's

845
00:52:13,360 --> 00:52:18,560
Speaker 1: happening finances. You know, our first investor has become our

846
00:52:18,640 --> 00:52:21,560
Speaker 1: last binances. You know, we've agreed to buy us out,

847
00:52:23,239 --> 00:52:29,440
Speaker 1: and at this point it's just it's just absolutely pandemonium. Pandemonium.

848
00:52:29,480 --> 00:52:46,719
Speaker 1: On that note, should we take a quick break and

849
00:52:47,040 --> 00:52:52,200
Speaker 1: we are back for parts three? How are you? How

850
00:52:52,239 --> 00:52:54,200
Speaker 1: are you holding up through all this? Mike? Is this

851
00:52:54,680 --> 00:52:59,360
Speaker 1: is this painful? Painful listening? Yeah, it's a it's a

852
00:52:59,600 --> 00:53:03,600
Speaker 1: it's a it's a horror show. Um, but it's kind

853
00:53:03,600 --> 00:53:05,960
Speaker 1: of yeah, and we all know how it ends. It's

854
00:53:06,040 --> 00:53:09,360
Speaker 1: not it's not it's not. It's not like the suspense

855
00:53:09,360 --> 00:53:11,759
Speaker 1: will will something happen at the end? Well, we know what,

856
00:53:11,880 --> 00:53:17,000
Speaker 1: we kind of know. But yes, So Finance issued a

857
00:53:17,040 --> 00:53:21,400
Speaker 1: statement that they're gonna try to to sort this situation

858
00:53:21,440 --> 00:53:23,759
Speaker 1: out by acquiring f t x UM and then the

859
00:53:24,400 --> 00:53:29,399
Speaker 1: did the Jude diligence report come back? It didn't well,

860
00:53:29,640 --> 00:53:32,920
Speaker 1: it didn't go well. It's important to note that at

861
00:53:32,960 --> 00:53:35,520
Speaker 1: this point, you know, the market is in full on

862
00:53:35,640 --> 00:53:39,040
Speaker 1: panic and all this speculation about f t X, the

863
00:53:39,160 --> 00:53:44,440
Speaker 1: price prices are just absolutely tanking across the board, and

864
00:53:45,000 --> 00:53:48,120
Speaker 1: funnily enough, like this, this this tweet from CZ that

865
00:53:48,200 --> 00:53:50,440
Speaker 1: they were that Finance was going to buy ft X,

866
00:53:50,480 --> 00:53:53,200
Speaker 1: and it was absolutely jaw dropping I mean, it's just

867
00:53:53,800 --> 00:53:57,440
Speaker 1: like the thought that the biggest crypto exchange would be

868
00:53:57,480 --> 00:54:01,160
Speaker 1: buying out the second biggest crypto exchange. It was just

869
00:54:01,160 --> 00:54:06,200
Speaker 1: just how unthinkable that was even a few hours before. Really,

870
00:54:07,480 --> 00:54:09,799
Speaker 1: and I must say, I remember seeing that tweet come

871
00:54:09,840 --> 00:54:12,719
Speaker 1: through and I thought I was hallucinating. I was just like,

872
00:54:13,800 --> 00:54:21,000
Speaker 1: what is this? What anyhow? So, um, what happens? So

873
00:54:21,080 --> 00:54:23,160
Speaker 1: the market kind of the market kind of recovered a

874
00:54:23,160 --> 00:54:25,560
Speaker 1: little bit, you know, not not to you know, it

875
00:54:25,560 --> 00:54:27,960
Speaker 1: didn't bounce straight back up but all the way back up,

876
00:54:28,000 --> 00:54:31,640
Speaker 1: but certainly it was like, Okay, maybe this can be

877
00:54:32,280 --> 00:54:35,840
Speaker 1: this situation can be resolved because by now, obviously f

878
00:54:35,960 --> 00:54:41,279
Speaker 1: t X has paused withdrawals SBF having tweeted out, you know,

879
00:54:41,320 --> 00:54:43,200
Speaker 1: and this is this is like another thing. There's so

880
00:54:43,239 --> 00:54:46,360
Speaker 1: many little details to this story. I'm naturally going to

881
00:54:46,440 --> 00:54:49,120
Speaker 1: miss a few out SPF had done what is now

882
00:54:49,239 --> 00:54:53,080
Speaker 1: kind of the classic part of the crypto platform, going

883
00:54:53,600 --> 00:54:57,160
Speaker 1: going to zero playbook having tweeted out. You know, f

884
00:54:57,280 --> 00:55:01,160
Speaker 1: t X is fine, assets are fine, you know everything, Okay,

885
00:55:01,200 --> 00:55:04,520
Speaker 1: this is just fun. Don't worry blah blah blah, crypto

886
00:55:04,600 --> 00:55:08,879
Speaker 1: collapse bingo, Yeah, have you checked off all of these things. Yeah,

887
00:55:08,920 --> 00:55:12,839
Speaker 1: it's it's absolutely and it's like again, people are sort

888
00:55:12,840 --> 00:55:16,040
Speaker 1: of the thing now is like, as soon as that

889
00:55:16,280 --> 00:55:18,359
Speaker 1: kind of the if you like, the meme or one

890
00:55:18,440 --> 00:55:20,800
Speaker 1: of the many memes going around in crypto at the moment,

891
00:55:20,920 --> 00:55:24,960
Speaker 1: is like, as soon as the CEO of a crypto

892
00:55:25,040 --> 00:55:28,120
Speaker 1: exchange comes out with a statement saying everything is fine

893
00:55:28,560 --> 00:55:31,520
Speaker 1: withdraw get out of there. That is that is that

894
00:55:31,680 --> 00:55:34,680
Speaker 1: is it. The house is on fire, you know. Um,

895
00:55:34,719 --> 00:55:36,799
Speaker 1: And we might touch on that later because obviously there's

896
00:55:36,840 --> 00:55:39,520
Speaker 1: been you know, there's been as you might imagine, concerns

897
00:55:39,640 --> 00:55:43,400
Speaker 1: over other exchanges as well. Anyhow, the thought was, you know,

898
00:55:44,040 --> 00:55:46,160
Speaker 1: going into the next day, we were like, okay, this

899
00:55:46,239 --> 00:55:49,600
Speaker 1: is this is bad, but you know this could look

900
00:55:49,640 --> 00:55:51,760
Speaker 1: this could be pretty good for finance. You know, Binance

901
00:55:51,880 --> 00:55:54,600
Speaker 1: is going to go from not only the biggest crypto

902
00:55:54,680 --> 00:55:58,000
Speaker 1: exchange in the world, but even bigger than it was before. Anyhow,

903
00:55:58,800 --> 00:56:02,120
Speaker 1: finance did I think you know, the due diligence process

904
00:56:02,160 --> 00:56:05,160
Speaker 1: went on for for for less than for a fewer

905
00:56:05,160 --> 00:56:08,800
Speaker 1: than twenty four hours, and they just you know, obviously

906
00:56:09,320 --> 00:56:12,319
Speaker 1: glimpsed into the abyss when they when they opened the

907
00:56:12,320 --> 00:56:16,840
Speaker 1: books and just went nope. And remember you know, l

908
00:56:16,880 --> 00:56:19,040
Speaker 1: O I this letter of intent that was never a

909
00:56:19,080 --> 00:56:21,759
Speaker 1: concrete agreement that was like, you know, we'll do this

910
00:56:21,840 --> 00:56:24,480
Speaker 1: so long as the due diligence shows there's not like

911
00:56:24,640 --> 00:56:27,759
Speaker 1: a nest of vipers just lurking in the books, which

912
00:56:27,800 --> 00:56:29,960
Speaker 1: they were. Obviously, they took a look at the balance

913
00:56:30,000 --> 00:56:34,279
Speaker 1: sheet and just went no, no, And I think if

914
00:56:34,280 --> 00:56:36,600
Speaker 1: I remember rightly, you know, there's been so many huge

915
00:56:37,000 --> 00:56:39,839
Speaker 1: numbers sort of bandied around over the last few days

916
00:56:39,880 --> 00:56:42,279
Speaker 1: or so, but I think the whole was about eight

917
00:56:42,320 --> 00:56:45,080
Speaker 1: billion dollars worth. You know, there was an eight billion

918
00:56:45,120 --> 00:56:48,960
Speaker 1: dollar hole in al AMDs balance sheet. You know, the

919
00:56:49,040 --> 00:56:53,080
Speaker 1: money had just the money just gone, you know. And

920
00:56:53,120 --> 00:56:54,759
Speaker 1: then we had we had a couple of others. We

921
00:56:54,800 --> 00:56:57,839
Speaker 1: had Justin Son, who is the it was the guy

922
00:56:57,880 --> 00:57:02,839
Speaker 1: who founded the tron Um crypto project and he's also

923
00:57:02,960 --> 00:57:05,680
Speaker 1: now that the owner of the Huobi exchange, you know,

924
00:57:05,760 --> 00:57:09,200
Speaker 1: a big kind of a well known crypto billionaire. He

925
00:57:09,280 --> 00:57:12,520
Speaker 1: was sort of apparently looking into buying it and just

926
00:57:12,760 --> 00:57:17,520
Speaker 1: clearly went no, thank you very much. So a few

927
00:57:17,600 --> 00:57:21,560
Speaker 1: days later over that basically going into going into last weekend,

928
00:57:22,360 --> 00:57:27,960
Speaker 1: f t X filed for bankruptcy. Um and this is

929
00:57:28,000 --> 00:57:30,280
Speaker 1: there were lots of rumors that you know, apparently f

930
00:57:30,400 --> 00:57:33,080
Speaker 1: t X is subsidiaries that you it's u S subsidiary

931
00:57:33,160 --> 00:57:37,360
Speaker 1: was apparently allowing withdrawals its subsidiaries, and I think it

932
00:57:37,440 --> 00:57:40,040
Speaker 1: was Turkey in Japan. I think users there were able

933
00:57:40,080 --> 00:57:45,000
Speaker 1: to withdraw kind of small amounts of crypto, but basically

934
00:57:45,040 --> 00:57:47,960
Speaker 1: the game was up and over the weekend I think

935
00:57:47,960 --> 00:57:51,080
Speaker 1: it was was it Friday night? I forget now, but yeah,

936
00:57:51,080 --> 00:57:54,240
Speaker 1: basically ft X filed for bankruptcy. Ft X and all

937
00:57:54,280 --> 00:57:57,680
Speaker 1: its subsidiaries, that is over one hundred and thirty companies

938
00:57:57,800 --> 00:58:03,840
Speaker 1: and entities bankruptcy. Um SPF resigned as as CEO to

939
00:58:03,880 --> 00:58:06,000
Speaker 1: be replaced by this guy, as I said earlier, who

940
00:58:06,080 --> 00:58:10,320
Speaker 1: was who was brought into kind of oversee the winding

941
00:58:10,360 --> 00:58:17,880
Speaker 1: down of Enron wonderfully apt And basically the crypto community

942
00:58:18,160 --> 00:58:20,400
Speaker 1: was having to come to terms with the fact that

943
00:58:20,560 --> 00:58:24,000
Speaker 1: I think FTX had around you a million customers, a

944
00:58:24,080 --> 00:58:28,000
Speaker 1: million users, so not all of them will have had

945
00:58:28,440 --> 00:58:32,080
Speaker 1: huge amounts of crypto on the exchange. But unfortunately we

946
00:58:32,160 --> 00:58:35,880
Speaker 1: saw a repeat of sorts of the situation that we've

947
00:58:35,960 --> 00:58:40,880
Speaker 1: seen earlier this year, people who had significant amounts of

948
00:58:40,880 --> 00:58:44,720
Speaker 1: money in some cases all their life savings tied up

949
00:58:44,800 --> 00:58:48,040
Speaker 1: in f t X and now having to come to

950
00:58:48,120 --> 00:58:53,280
Speaker 1: terms of the fact that it is gone. Um as

951
00:58:53,360 --> 00:58:56,640
Speaker 1: we've seen with bankruptcy filings from the likes of Celsius,

952
00:58:57,000 --> 00:59:00,240
Speaker 1: you know, there is a there is a chance that

953
00:59:00,320 --> 00:59:04,440
Speaker 1: they may get some of their song. Bear in mind,

954
00:59:04,440 --> 00:59:07,080
Speaker 1: I should say, Mikey that the bankrupt that those who

955
00:59:07,200 --> 00:59:12,760
Speaker 1: were that mounts mount when it went into when it

956
00:59:12,880 --> 00:59:18,480
Speaker 1: filed for bankruptcy about eight eight years ago, it's creditors

957
00:59:18,840 --> 00:59:22,600
Speaker 1: have still not been made whole. They are still waiting

958
00:59:22,640 --> 00:59:27,800
Speaker 1: for their for their bitcoin. So yeah, it's it's terrible

959
00:59:27,840 --> 00:59:32,360
Speaker 1: news for for f t X users. It's terrible news

960
00:59:32,520 --> 00:59:36,480
Speaker 1: for the whole crypto community. And you know that, I

961
00:59:36,480 --> 00:59:40,080
Speaker 1: guess the hardest the hardest part of it was that

962
00:59:40,920 --> 00:59:46,280
Speaker 1: it's happened again. We have we were here just a

963
00:59:46,320 --> 00:59:50,360
Speaker 1: few months ago and it has happened again, I should

964
00:59:50,360 --> 00:59:52,560
Speaker 1: say as well, Like you know, there were all these

965
00:59:52,600 --> 00:59:55,200
Speaker 1: conflicting reports coming out of f t X staff, like

966
00:59:55,320 --> 00:59:58,520
Speaker 1: most of them were completely in the dark. You know,

967
00:59:58,600 --> 01:00:02,120
Speaker 1: they didn't know what was going on at at the top,

968
01:00:02,200 --> 01:00:06,000
Speaker 1: you know, and it seems at this stage again you know,

969
01:00:06,080 --> 01:00:08,400
Speaker 1: we can't be we we don't have full clarity yet

970
01:00:08,440 --> 01:00:10,440
Speaker 1: over what was going on, but it seems at this

971
01:00:10,520 --> 01:00:13,760
Speaker 1: stage that basically SPF and a few other people at

972
01:00:13,760 --> 01:00:16,440
Speaker 1: the very top I knew what was going on. They

973
01:00:16,560 --> 01:00:19,760
Speaker 1: knew that Alameda had taken these huge losses. They knew

974
01:00:19,760 --> 01:00:22,320
Speaker 1: that fd X customer funds had been used to plug it.

975
01:00:22,800 --> 01:00:27,960
Speaker 1: They knew that Lameter and by extension, f t X

976
01:00:28,080 --> 01:00:33,560
Speaker 1: were on very very thin ice. But they kept stumped

977
01:00:33,560 --> 01:00:36,920
Speaker 1: either because are people going to go to jail for this?

978
01:00:38,160 --> 01:00:39,880
Speaker 1: That is a very good question. I think that kind

979
01:00:39,880 --> 01:00:42,320
Speaker 1: of leads on nicely to what you know, to kind

980
01:00:42,360 --> 01:00:44,840
Speaker 1: of the next stage. So at the moment, I should

981
01:00:44,880 --> 01:00:52,240
Speaker 1: say SPF is apparently under supervision in the Bahamas, which

982
01:00:52,640 --> 01:00:57,000
Speaker 1: you know, doesn't sound like under arrest, but he's under supervision. Now,

983
01:00:57,040 --> 01:00:59,720
Speaker 1: I should say like authorities in the US, like the

984
01:01:00,040 --> 01:01:03,800
Speaker 1: US just the the Justice Department, the SEC, the CFTC,

985
01:01:04,680 --> 01:01:08,640
Speaker 1: god knows who else, the National Guard, the FBI, you know, everyone,

986
01:01:08,680 --> 01:01:12,600
Speaker 1: I think probably has opened investigations into ft X. The

987
01:01:12,680 --> 01:01:15,320
Speaker 1: Royal Bahamas Police remember that ft X is based in

988
01:01:15,360 --> 01:01:20,520
Speaker 1: the Bahamas. They're investigating. So SBF is believed to be

989
01:01:20,640 --> 01:01:22,920
Speaker 1: kind of I think under house arrest in this huge

990
01:01:23,200 --> 01:01:25,720
Speaker 1: kind of penthouse that he was sharing, and I think

991
01:01:25,760 --> 01:01:27,560
Speaker 1: some of his some of the other people sort of

992
01:01:27,560 --> 01:01:31,760
Speaker 1: close to him are also under house arrest. Um, that

993
01:01:31,880 --> 01:01:34,760
Speaker 1: didn't stop him tweeting out a very well as his

994
01:01:34,920 --> 01:01:38,320
Speaker 1: League of Legends account being suspended yet because that I

995
01:01:38,320 --> 01:01:40,480
Speaker 1: think you've gotta hurt them where it matters. But yeah,

996
01:01:40,480 --> 01:01:41,920
Speaker 1: you've got to really, you've got to really hit him

997
01:01:41,920 --> 01:01:45,120
Speaker 1: where it hurts. Apparently not Apparently, there's there's I've seen

998
01:01:45,160 --> 01:01:48,360
Speaker 1: good evidence on Twitter that he has been playing online

999
01:01:49,200 --> 01:01:52,960
Speaker 1: whilst this whole thing has been going on. And earlier

1000
01:01:53,000 --> 01:01:55,320
Speaker 1: today there was a New York Times piece. He was

1001
01:01:55,360 --> 01:01:58,240
Speaker 1: interviewed for the New York Times and he sort of mentioned,

1002
01:01:58,240 --> 01:01:59,800
Speaker 1: you know, he talked about playing it there as well,

1003
01:02:00,000 --> 01:02:03,080
Speaker 1: sort of showing very little contrition. And everyone is kind

1004
01:02:03,080 --> 01:02:05,400
Speaker 1: of up in arms at the New York Times about this,

1005
01:02:05,440 --> 01:02:09,120
Speaker 1: you know, basically giving him a really easy ride, you know. Um,

1006
01:02:09,160 --> 01:02:11,280
Speaker 1: he didn't comment on whether he'd be going to jail

1007
01:02:11,400 --> 01:02:15,440
Speaker 1: or anything like this, But I mean, so as it stands,

1008
01:02:16,720 --> 01:02:19,000
Speaker 1: we're we're sort of a bit starved of information at

1009
01:02:19,000 --> 01:02:22,720
Speaker 1: the moment, but it appears like you know, the raw

1010
01:02:22,800 --> 01:02:25,760
Speaker 1: Bahamas police are are keeping an eye on him as

1011
01:02:25,880 --> 01:02:28,440
Speaker 1: I as we record this, he hasn't been arrested. You

1012
01:02:28,520 --> 01:02:33,200
Speaker 1: would hope that this will happen soon. I said in

1013
01:02:33,240 --> 01:02:37,320
Speaker 1: a video yesterday. I think the whole crypto community, just

1014
01:02:37,520 --> 01:02:42,120
Speaker 1: for the sake of its collective soul, collective sanity, basically

1015
01:02:42,160 --> 01:02:44,520
Speaker 1: needs to see some pictures of him in you know,

1016
01:02:44,600 --> 01:02:47,360
Speaker 1: in a prison jumpsuit. Stat do you know what I mean?

1017
01:02:47,920 --> 01:02:50,240
Speaker 1: There's got to be some sort of consequences for these

1018
01:02:50,280 --> 01:02:55,480
Speaker 1: actions otherwise it's not going to stop. Yeah, and this

1019
01:02:55,560 --> 01:02:57,320
Speaker 1: is yeah, and this is I think this is this

1020
01:02:57,360 --> 01:02:59,440
Speaker 1: is a good point to lead onto, I should say.

1021
01:02:59,480 --> 01:03:01,880
Speaker 1: Over the week and there was all sorts of speculation.

1022
01:03:02,040 --> 01:03:03,880
Speaker 1: Some people were tracking what was believed to be his

1023
01:03:03,960 --> 01:03:08,120
Speaker 1: private jet. They thought he was fleeing to Argentina. UM.

1024
01:03:08,280 --> 01:03:10,800
Speaker 1: There were also rumors that he was trying to get

1025
01:03:11,040 --> 01:03:15,560
Speaker 1: to Dubai. UM. And actually someone I a source of

1026
01:03:15,600 --> 01:03:17,880
Speaker 1: mine here, a friend of mine who's who's sort of

1027
01:03:18,400 --> 01:03:21,479
Speaker 1: very kind of well connected in in in government here,

1028
01:03:22,360 --> 01:03:26,240
Speaker 1: texted me to say to me some information saying, um,

1029
01:03:26,280 --> 01:03:29,400
Speaker 1: you know, Dubai fairly recently signed an extradition treaty with

1030
01:03:29,480 --> 01:03:33,880
Speaker 1: the US, which these ft x Analoma people probably didn't realize,

1031
01:03:33,960 --> 01:03:37,040
Speaker 1: So the likelihood of them coming to Dubai is very

1032
01:03:37,160 --> 01:03:41,840
Speaker 1: very slim. Um. But yeah, the next the next stage

1033
01:03:41,920 --> 01:03:47,520
Speaker 1: needs to be these these scumbags repercussions for your actions, repercussions.

1034
01:03:47,560 --> 01:03:51,640
Speaker 1: They need to be accountability to answer for it. And yeah,

1035
01:03:51,760 --> 01:03:54,680
Speaker 1: we just you know, we just don't know. Um, and

1036
01:03:54,840 --> 01:03:57,400
Speaker 1: that's going to be should also say another development that

1037
01:03:57,400 --> 01:04:00,480
Speaker 1: happened over the weekend was the FTX platform got hacked.

1038
01:04:01,040 --> 01:04:05,840
Speaker 1: Now this is believed, this was believed to be an

1039
01:04:05,840 --> 01:04:10,520
Speaker 1: inside job and it's thought that someone high up. I

1040
01:04:10,560 --> 01:04:12,880
Speaker 1: think the hack was supposed to be originating in the Bahamas,

1041
01:04:13,560 --> 01:04:15,800
Speaker 1: and what it looks like at this stage, this still

1042
01:04:15,840 --> 01:04:17,840
Speaker 1: I think needs to be confirmed. It looks like this

1043
01:04:17,920 --> 01:04:21,400
Speaker 1: was a high up fd X employee basically trying to

1044
01:04:21,400 --> 01:04:24,320
Speaker 1: get money off the platform. Because I remember that withdrawals

1045
01:04:24,360 --> 01:04:27,720
Speaker 1: were suspended. There were people on Twitter sort of trying

1046
01:04:27,760 --> 01:04:31,440
Speaker 1: to bribe ft X employees to to to take them

1047
01:04:31,440 --> 01:04:34,200
Speaker 1: through yeah, well to take them through k y C

1048
01:04:34,400 --> 01:04:37,560
Speaker 1: procedures in the Bahamas, because apparently withdrawals in the Bahamas

1049
01:04:37,600 --> 01:04:41,800
Speaker 1: were being authorized for a while, which again suggests because

1050
01:04:41,840 --> 01:04:43,920
Speaker 1: I think it was mostly the top team in the

1051
01:04:43,960 --> 01:04:47,600
Speaker 1: Bahamas so that suggests people like sp from those close

1052
01:04:47,680 --> 01:04:50,240
Speaker 1: to him might well have been you know, extracting funds

1053
01:04:50,280 --> 01:04:55,440
Speaker 1: from the platform when when regular yeah, yeah, rats, rats

1054
01:04:55,440 --> 01:05:00,200
Speaker 1: fleeing a sinking ship. Undoubtedly, Yeah it's and and now

1055
01:05:00,200 --> 01:05:04,160
Speaker 1: we're and now we're here, Um, apparently a crack and

1056
01:05:04,240 --> 01:05:08,160
Speaker 1: the crypto exchange crack and has you know, identified the hacker.

1057
01:05:08,240 --> 01:05:11,920
Speaker 1: But again, they're there, their identity hasn't been sort of

1058
01:05:11,920 --> 01:05:14,520
Speaker 1: made public and all this sort of stuff. So we're

1059
01:05:14,520 --> 01:05:17,360
Speaker 1: still waiting for a lot of this to come out.

1060
01:05:17,480 --> 01:05:19,720
Speaker 1: But they're in a nutshell. And as I say, like

1061
01:05:19,760 --> 01:05:21,560
Speaker 1: I've I've left out a lot of details for the

1062
01:05:21,560 --> 01:05:23,960
Speaker 1: sake of time and just for the sake of there's

1063
01:05:24,000 --> 01:05:26,800
Speaker 1: only so much you can kind of recall, you know, this,

1064
01:05:27,000 --> 01:05:30,880
Speaker 1: This has been such a it's such a fast moving story.

1065
01:05:30,920 --> 01:05:33,000
Speaker 1: There's been so much to take in. But they're in

1066
01:05:33,040 --> 01:05:36,400
Speaker 1: a nutshell. Is kind of what happened, And yeah, the

1067
01:05:36,560 --> 01:05:39,600
Speaker 1: questions that are now waiting to be answered is, yeah,

1068
01:05:39,760 --> 01:05:42,080
Speaker 1: are these guys going to face justice? And I think

1069
01:05:42,080 --> 01:05:44,800
Speaker 1: a lot of the concern is that because SBF is

1070
01:05:44,840 --> 01:05:48,520
Speaker 1: so well connected, because he gave to the Biden campaign,

1071
01:05:48,640 --> 01:05:52,960
Speaker 1: because his parents appear to you know, have be connected

1072
01:05:53,000 --> 01:05:55,600
Speaker 1: with people like Gary Gensler, who is head of the SEC,

1073
01:05:55,920 --> 01:05:58,520
Speaker 1: and well, let's touch on the SEC in a moment.

1074
01:05:58,560 --> 01:06:01,560
Speaker 1: But yeah, there there are there are genuine fears that

1075
01:06:01,600 --> 01:06:05,000
Speaker 1: this guy is so well connected that he some could

1076
01:06:05,040 --> 01:06:09,160
Speaker 1: somehow wriggle off the hook, or you know, other FTX

1077
01:06:09,160 --> 01:06:11,480
Speaker 1: employees could be made to take the fall, or any

1078
01:06:11,480 --> 01:06:13,520
Speaker 1: of this sort of stuff. And I must say, from

1079
01:06:13,560 --> 01:06:16,200
Speaker 1: the tone of this interview that he gave to The

1080
01:06:16,240 --> 01:06:18,000
Speaker 1: New York Times, and from the fact that he's still

1081
01:06:18,040 --> 01:06:20,680
Speaker 1: kind of tweeting out very cryptic stuff. He tweeted out

1082
01:06:20,680 --> 01:06:24,040
Speaker 1: the word what. You know, it said number one what

1083
01:06:25,160 --> 01:06:28,400
Speaker 1: and that was the tweet, and then number two h

1084
01:06:28,480 --> 01:06:32,000
Speaker 1: and then nothing and then three A four P five,

1085
01:06:32,280 --> 01:06:35,280
Speaker 1: you know, basically spelling out what happened. You know, this

1086
01:06:35,320 --> 01:06:40,320
Speaker 1: is like he clearly seems to be utterly divorced from reality,

1087
01:06:40,520 --> 01:06:45,400
Speaker 1: utterly kind of unaware, unwilling to acknowledge what he's done.

1088
01:06:46,240 --> 01:06:48,840
Speaker 1: He was making noises on on Twitter, you know, throughout

1089
01:06:48,880 --> 01:06:52,480
Speaker 1: this thing, even when even when it was filing for bankruptcy,

1090
01:06:52,560 --> 01:06:55,919
Speaker 1: even when it was clear that the thing was in ruins. Oh,

1091
01:06:56,080 --> 01:06:59,200
Speaker 1: you know, we're seeking external funding, We're going to make customers,

1092
01:06:59,240 --> 01:07:03,600
Speaker 1: whole all the sort of stuff. So it appears that

1093
01:07:03,640 --> 01:07:07,120
Speaker 1: he has kind of become pretty divorced from reality, and

1094
01:07:07,160 --> 01:07:11,120
Speaker 1: the hope is that someone is going to reacquaint him

1095
01:07:11,160 --> 01:07:14,960
Speaker 1: with reality in the sort of you know, sternest future.

1096
01:07:15,760 --> 01:07:19,160
Speaker 1: I think I think it's it's again to reiterate the point,

1097
01:07:19,280 --> 01:07:24,080
Speaker 1: just just if you've got any sort of crypto by

1098
01:07:24,560 --> 01:07:31,080
Speaker 1: a fifty pounds, sixty pounds or eight cold storage and

1099
01:07:31,160 --> 01:07:34,200
Speaker 1: get it on their air sp yeah, because that's the

1100
01:07:34,240 --> 01:07:39,000
Speaker 1: only way that you're not leaving your money, your life

1101
01:07:39,000 --> 01:07:43,040
Speaker 1: savings in the hands of a year old Bouffon League

1102
01:07:43,080 --> 01:07:51,720
Speaker 1: of Legends playing vegan. Not that that has anything to

1103
01:07:51,760 --> 01:07:55,800
Speaker 1: do with it, but but but it's just a fact

1104
01:07:55,840 --> 01:08:00,920
Speaker 1: he was vegan apparently. Um that it's that is insane,

1105
01:08:01,160 --> 01:08:07,400
Speaker 1: and I think we really do need to examine, um,

1106
01:08:07,520 --> 01:08:14,360
Speaker 1: what happens if what what what the democracy? If nothing

1107
01:08:14,400 --> 01:08:18,320
Speaker 1: happens to this this uh, this clown, if if he

1108
01:08:18,360 --> 01:08:26,360
Speaker 1: gets off through through nepotism and cronies and and political donations,

1109
01:08:26,800 --> 01:08:30,680
Speaker 1: you really do need to have a real look at

1110
01:08:30,680 --> 01:08:33,679
Speaker 1: yourself and go, why why is this happening? This can't

1111
01:08:33,720 --> 01:08:39,400
Speaker 1: this can't carry on? Yeah, that's depressing. It really is.

1112
01:08:39,640 --> 01:08:42,519
Speaker 1: But it's it's what I also wanted to just ask,

1113
01:08:42,680 --> 01:08:48,959
Speaker 1: so I know it's not binances fault because the actions

1114
01:08:49,000 --> 01:08:53,080
Speaker 1: that the f t x UM did they had no

1115
01:08:53,080 --> 01:08:55,880
Speaker 1: no influence over. But was it a petty sort of

1116
01:08:56,400 --> 01:08:59,720
Speaker 1: because a lot of this is is confidence, isn't it?

1117
01:08:59,760 --> 01:09:03,080
Speaker 1: And and if you if you intentionally ruin the confidence

1118
01:09:03,240 --> 01:09:06,400
Speaker 1: of the markets, is that not cutting your nose off

1119
01:09:06,400 --> 01:09:08,920
Speaker 1: to spite your face or is that just accelerating something

1120
01:09:08,920 --> 01:09:12,240
Speaker 1: that was probably inevitable going inevitably going to happen. That

1121
01:09:12,360 --> 01:09:16,840
Speaker 1: is a very good question, because well, I should put

1122
01:09:16,840 --> 01:09:18,400
Speaker 1: it in a bit of I'll give you a bit

1123
01:09:18,400 --> 01:09:23,599
Speaker 1: of extra context to it, because uh, CZ apparently this

1124
01:09:23,640 --> 01:09:26,599
Speaker 1: is something this is something we saw again leaked on Twitter.

1125
01:09:26,680 --> 01:09:29,839
Speaker 1: CZ sent an internal message around to all Binance staff

1126
01:09:30,320 --> 01:09:33,919
Speaker 1: when this was going down, you know, after after FTX

1127
01:09:33,960 --> 01:09:37,760
Speaker 1: had filed for bankruptcy, saying, you know, you shouldn't see

1128
01:09:37,800 --> 01:09:40,800
Speaker 1: this as a win for Binance because this is this

1129
01:09:40,840 --> 01:09:44,920
Speaker 1: is bad for crypto so and a lot of people,

1130
01:09:45,160 --> 01:09:47,519
Speaker 1: a lot of people have sort of said, well, you know,

1131
01:09:48,280 --> 01:09:51,439
Speaker 1: surely this is this is c Z's fault for for

1132
01:09:51,520 --> 01:09:55,559
Speaker 1: precipitating this, And I don't think that's I mean, I

1133
01:09:55,560 --> 01:09:57,680
Speaker 1: can see why they say that, but I don't think

1134
01:09:57,760 --> 01:10:01,960
Speaker 1: that's that's fair because this this comes down to you know,

1135
01:10:02,000 --> 01:10:05,160
Speaker 1: this comes down to SPF and and whoever else at

1136
01:10:05,160 --> 01:10:08,400
Speaker 1: Alameda and f t X new And but it's interesting

1137
01:10:08,439 --> 01:10:10,120
Speaker 1: to see this is I mean, this is something I

1138
01:10:10,120 --> 01:10:12,760
Speaker 1: would I would very much like to you know, if

1139
01:10:12,800 --> 01:10:15,000
Speaker 1: I ever get the chance to to to interview c

1140
01:10:15,160 --> 01:10:16,880
Speaker 1: Z again, this is something I'd like to talk to

1141
01:10:16,960 --> 01:10:20,679
Speaker 1: him about really, and I'd like to ask him because yeah,

1142
01:10:20,720 --> 01:10:23,920
Speaker 1: in in a way, I mean, what he did was expose,

1143
01:10:25,080 --> 01:10:29,559
Speaker 1: you know, expose the inherent weakness of f t X,

1144
01:10:30,360 --> 01:10:34,080
Speaker 1: and I guess the question of whether the whether the

1145
01:10:34,160 --> 01:10:39,439
Speaker 1: market would have found that out anyway, it's it's a

1146
01:10:39,479 --> 01:10:43,439
Speaker 1: moot point. It draws parallels to sort of wiki leaks,

1147
01:10:44,120 --> 01:10:47,120
Speaker 1: and it's it's like it's journalism exposing the truth about

1148
01:10:47,160 --> 01:10:50,200
Speaker 1: what is happening. And it may have a detrimental effect

1149
01:10:50,240 --> 01:10:54,200
Speaker 1: on on the government or the markets, but that is

1150
01:10:54,240 --> 01:10:56,920
Speaker 1: what is happening. And do people need to know that

1151
01:10:57,000 --> 01:10:59,479
Speaker 1: truth or do they want to live in ignorance? And

1152
01:10:59,479 --> 01:11:05,280
Speaker 1: and uh uh you know blue Pillar, I suppose yeah, yeah,

1153
01:11:05,520 --> 01:11:08,080
Speaker 1: do you I mean, and do you do you let

1154
01:11:08,200 --> 01:11:11,160
Speaker 1: something that you know to be rotten, do you let

1155
01:11:11,200 --> 01:11:14,120
Speaker 1: that carry on? I mean people have people could have

1156
01:11:14,200 --> 01:11:16,880
Speaker 1: carried on pouring money into ft X. I mean, this

1157
01:11:16,960 --> 01:11:19,080
Speaker 1: is this is a company that was making f t

1158
01:11:19,280 --> 01:11:23,559
Speaker 1: X was making eight figures every single day on trading

1159
01:11:23,640 --> 01:11:25,400
Speaker 1: even I think in a you know, even in a

1160
01:11:25,439 --> 01:11:29,960
Speaker 1: bear market. This was a fantastically you know, rich company.

1161
01:11:30,080 --> 01:11:33,400
Speaker 1: It was. It was very I mean it raised it

1162
01:11:33,479 --> 01:11:37,519
Speaker 1: raised about a billion dollars recently on a I think

1163
01:11:37,520 --> 01:11:39,800
Speaker 1: it was a thirty two billion dollar valuation. I've seen

1164
01:11:39,840 --> 01:11:42,000
Speaker 1: it values as high as forty billion dollars. It was

1165
01:11:42,000 --> 01:11:45,800
Speaker 1: a it was a monster. And you know, it's name

1166
01:11:45,840 --> 01:11:49,160
Speaker 1: plastered all over stadiums. Tom Brady was one of its

1167
01:11:49,240 --> 01:11:53,120
Speaker 1: Tom and Brady and Gisele were two of its big ambassadors. Again,

1168
01:11:53,200 --> 01:11:55,880
Speaker 1: this is a you know, SPF was out pressing the

1169
01:11:55,920 --> 01:11:58,479
Speaker 1: flesh in Washington. He was well connected. He was the

1170
01:11:58,600 --> 01:12:00,840
Speaker 1: youngest billionaire ever. He's said he was going to give

1171
01:12:00,840 --> 01:12:05,559
Speaker 1: all his money away. We kind of ye kind of

1172
01:12:05,600 --> 01:12:08,519
Speaker 1: came to on that one, not not quite in the

1173
01:12:08,560 --> 01:12:10,479
Speaker 1: way he imagined. And this was I mean, this was

1174
01:12:10,479 --> 01:12:14,600
Speaker 1: one the most extraordinary things apparently he I mean, his

1175
01:12:14,680 --> 01:12:17,400
Speaker 1: wealth has gone to zero and apparently it's I think

1176
01:12:17,400 --> 01:12:24,639
Speaker 1: it's the fastest individual loss of wealth in history. Take

1177
01:12:24,680 --> 01:12:30,920
Speaker 1: about that is phenomenal three words only in crypto. I

1178
01:12:31,280 --> 01:12:35,080
Speaker 1: think it's fair to say so. Yeah. Um, it's a

1179
01:12:35,200 --> 01:12:40,000
Speaker 1: very good question, Mike. Yeah, it's whether, yeah, whether whether this,

1180
01:12:40,280 --> 01:12:42,960
Speaker 1: whether ft X would have would have collapsed anywhere. I mean,

1181
01:12:43,160 --> 01:12:46,639
Speaker 1: looking at the seeing what what we know now about

1182
01:12:46,680 --> 01:12:49,080
Speaker 1: the state of Alameda and the fact that you know,

1183
01:12:49,120 --> 01:12:52,679
Speaker 1: f t X was was plugging this whole with customer funds,

1184
01:12:52,720 --> 01:12:56,920
Speaker 1: I think I think probably it would have become perhaps inevitable.

1185
01:12:57,000 --> 01:12:59,000
Speaker 1: It was. It was just it's speeding up the process

1186
01:12:59,120 --> 01:13:03,120
Speaker 1: rather than uh, you know, being the count the straw

1187
01:13:03,160 --> 01:13:07,559
Speaker 1: that broke the camel's back. It was, Yeah, it was happening.

1188
01:13:07,680 --> 01:13:10,720
Speaker 1: It was happening anyway. It's just whether this was going

1189
01:13:10,800 --> 01:13:15,439
Speaker 1: to happen now or the late at a future funk

1190
01:13:15,520 --> 01:13:20,360
Speaker 1: up or or taking the packing the sick dog out

1191
01:13:20,360 --> 01:13:28,720
Speaker 1: behind the barn and mom boy, let's go now go

1192
01:13:28,880 --> 01:13:31,720
Speaker 1: for a little wiki. Can you quickly give me your

1193
01:13:31,720 --> 01:13:34,559
Speaker 1: thoughts Mike before we go on, Like, how does this

1194
01:13:34,600 --> 01:13:36,400
Speaker 1: look to you? As we said at the beginning, you know,

1195
01:13:36,439 --> 01:13:39,559
Speaker 1: someone outside looking in very much, what does this what

1196
01:13:39,600 --> 01:13:45,439
Speaker 1: does this say about crypto, Well, I was normally singing

1197
01:13:45,479 --> 01:13:48,640
Speaker 1: from the same hymn sheet of Well, this happens in

1198
01:13:48,880 --> 01:13:51,639
Speaker 1: in traditional banking as well, and to a certain degree

1199
01:13:52,320 --> 01:13:55,360
Speaker 1: it kind of it kind of does you know we

1200
01:13:55,439 --> 01:14:00,960
Speaker 1: had Lehman Brothers sort of collapse from the the two

1201
01:14:00,960 --> 01:14:05,479
Speaker 1: thousand and seven eight financial crisis. We've got Bearings Bank

1202
01:14:05,600 --> 01:14:09,160
Speaker 1: being brought down by one man um. I think it's

1203
01:14:09,200 --> 01:14:13,679
Speaker 1: just crypto is is is? Uh? There is an element

1204
01:14:13,720 --> 01:14:22,320
Speaker 1: of financial mismanagement and financial u abuse on steroids because

1205
01:14:22,360 --> 01:14:27,479
Speaker 1: it is kind of uh, a new frontier about it.

1206
01:14:27,560 --> 01:14:32,120
Speaker 1: So we're getting a lot of these stories recently, and

1207
01:14:32,160 --> 01:14:34,680
Speaker 1: I think a lot of it is is also, as

1208
01:14:34,720 --> 01:14:37,080
Speaker 1: we sort of alluded to in the earlier in the pod,

1209
01:14:37,479 --> 01:14:40,920
Speaker 1: a domino effect of of once one thing goes, we're

1210
01:14:40,960 --> 01:14:47,960
Speaker 1: also intrinsically linked, and investments from from from one one

1211
01:14:48,479 --> 01:14:52,559
Speaker 1: exchange or one one company I get wiped out because

1212
01:14:52,600 --> 01:14:56,360
Speaker 1: of lunar or terror or or now f t x UM.

1213
01:14:56,400 --> 01:14:59,759
Speaker 1: It's it's a it's a scary time, and not everyone

1214
01:14:59,880 --> 01:15:03,479
Speaker 1: is to to be as honest and truthful as as

1215
01:15:04,160 --> 01:15:06,719
Speaker 1: as as you would hope they would be, because they're

1216
01:15:06,760 --> 01:15:09,200
Speaker 1: they're interested in saving their own skins and trying to

1217
01:15:09,960 --> 01:15:13,080
Speaker 1: stay above water. It's not the first time this has happened.

1218
01:15:13,080 --> 01:15:15,840
Speaker 1: It's not going to be the last time. Unfortunately. Get

1219
01:15:15,880 --> 01:15:19,400
Speaker 1: your things, get your get your your, your your coins,

1220
01:15:19,479 --> 01:15:23,960
Speaker 1: your your your, your crypto onto cold storage, and sleep

1221
01:15:24,000 --> 01:15:26,960
Speaker 1: a little bit easier at night. I think that is

1222
01:15:27,080 --> 01:15:29,400
Speaker 1: a very good note to end it on. Mike. Yeah,

1223
01:15:29,439 --> 01:15:33,320
Speaker 1: anyone listening, if you have any crypto on any exchange,

1224
01:15:33,400 --> 01:15:36,960
Speaker 1: for God's sake, don't be don't be that person. Don't

1225
01:15:37,000 --> 01:15:39,720
Speaker 1: be left holding the bag. Get a hardware, wallet, and

1226
01:15:39,840 --> 01:15:44,280
Speaker 1: custody yourself. Please. If if we take anything from this situation,

1227
01:15:44,800 --> 01:15:47,920
Speaker 1: because yeah, there's something there's something rotten. I think at

1228
01:15:47,920 --> 01:15:51,080
Speaker 1: the core of crypto, you know, these centralized platforms, these

1229
01:15:51,120 --> 01:15:54,320
Speaker 1: people with too much power and too little oversight, and

1230
01:15:55,120 --> 01:15:57,320
Speaker 1: we've we've got to clean it up were you know,

1231
01:15:57,360 --> 01:15:59,720
Speaker 1: it has to. There's so much there's so much work

1232
01:15:59,760 --> 01:16:03,360
Speaker 1: to do from here. Crypto will survive, but I think

1233
01:16:03,400 --> 01:16:06,719
Speaker 1: it's time. I think it's time crypto users took matters

1234
01:16:06,720 --> 01:16:09,240
Speaker 1: into their own hands and just said enough is enough.

1235
01:16:09,280 --> 01:16:12,519
Speaker 1: So please folks self custody is the only way. Mikey,

1236
01:16:12,520 --> 01:16:14,360
Speaker 1: I'm gonna let you shoot off man. Thanks so much

1237
01:16:14,400 --> 01:16:19,160
Speaker 1: for joining me. Let's catch up next noise. All right,

1238
01:16:19,800 --> 01:16:22,719
Speaker 1: thank you so much for listening to the coin Bureau podcast.

1239
01:16:22,800 --> 01:16:25,400
Speaker 1: If you'd like to learn more about cryptocurrency, you can

1240
01:16:25,479 --> 01:16:28,880
Speaker 1: visit our YouTube channel at YouTube dot com forward slash

1241
01:16:28,960 --> 01:16:31,599
Speaker 1: coin Bureau. You can also go to coin bureau dot

1242
01:16:31,600 --> 01:16:34,720
Speaker 1: com for loads more information about all things crypto. You

1243
01:16:34,760 --> 01:16:37,080
Speaker 1: can follow me on Twitter and at coin bureau all

1244
01:16:37,160 --> 01:16:40,280
Speaker 1: one word, and I'm also active on TikTok and Instagram

1245
01:16:40,320 --> 01:16:43,519
Speaker 1: as well. First of all, it's not thank you for listening.

1246
01:16:43,760 --> 01:16:48,519
Speaker 1: You're welcome for great content. Yeah, Like this is free

1247
01:16:48,840 --> 01:16:52,040
Speaker 1: and they're learning about a fairly great topic in a

1248
01:16:52,080 --> 01:16:54,840
Speaker 1: non boring way. If you'd like to visit me and

1249
01:16:54,840 --> 01:16:57,680
Speaker 1: hear more about me, go to mooch about, m O

1250
01:16:57,800 --> 01:17:11,280
Speaker 1: O c h A, boh U T or else. For

1251
01:17:11,360 --> 01:17:14,320
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1252
01:17:14,400 --> 01:17:18,320
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1253
01:17:26,080 --> 01:17:50,080
Speaker 1: The coin vierea podcast is a production of I Heart Radio.