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Speaker 1: This is Red Pilled America.

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Speaker 2: Before we start the show, just a reminder to share, like,

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Speaker 2: Red Pilled America, you can become a backstage subscriber. Well

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Speaker 2: To support the show, please visit Redpilled America dot com

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Speaker 2: Pilled America dot com and click support or shop in

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Speaker 2: the top menu. Help us save America one story at

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Speaker 2: a time.

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Speaker 1: Previously on Red Pilled America.

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Speaker 2: By late twenty eighteen, Alimed Research was already in trouble.

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Speaker 3: I mean, the company didn't have any lawyer, so I

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Speaker 3: think my utility there was pretty obvious.

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Speaker 1: Hundreds of unscrupulous characters began creating their own cryptocurrencies.

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Speaker 4: And the currency that you would use would be these munchies.

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Speaker 3: You know, it's so outland as that I'm tempted to

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Speaker 3: accuse you of just making that up.

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Speaker 5: We also recently launched a derivatives exchange called FTX.

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Speaker 1: Sam called his new cryptocurrency FTT.

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Speaker 2: By the end of twenty nineteen, CZ became one of

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Speaker 2: the first major investors in FTX.

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Speaker 6: They were treating this guy like it us a guru.

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Speaker 7: How did you do this so quickly?

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Speaker 2: FTX raked in an industry record nine hundred million dollars.

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Speaker 1: I'm Patrick Carrelci.

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Speaker 2: And I'm Adriana Cortez.

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Speaker 1: And this is Red Pilled America, a storytelling show.

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Speaker 2: This is not another talk show covering the day's news.

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Speaker 2: We are all about telling stories.

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Speaker 1: Stories. Hollywood doesn't want you to hear stories.

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Speaker 2: The media marks stories about everyday Americans at the Globalist ignore.

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Speaker 1: You could think of Red Pilled America as audio documentaries,

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Speaker 1: and we've promised only one thing, the truth. Welcome to

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Speaker 1: Red Pilled America. We're at the third and final part

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Speaker 1: of our series of episodes entitled Crypto Revisited. If you

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Speaker 1: haven't heard the previous episodes, you should go back and

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Speaker 1: listen from the beginning. We're looking for the answer to

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Speaker 1: the question where is cryptocurrency going? By telling the story

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Speaker 1: of the astonishing rise and spectacular fall of crypto entrepreneur

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Speaker 1: Sam Bankman Freed.

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Speaker 2: So to pick up where we left off at the

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Speaker 2: close of twenty twenty one, Sam Bankman Freed was in

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Speaker 2: the midst of a power move. The young crypto entrepreneur

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Speaker 2: had some leverage. He'd just come off an industry record

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Speaker 2: nine hundred million dollar fundraising tour for his cryptocurrency exchange

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Speaker 2: FTX and hiss Pitcoin was peaking at nearly seventy thousand

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Speaker 2: dollars per coin. The price of Sam's FTT token rose

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Speaker 2: along with it. Sam was climbing to the top of

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Speaker 2: the crypto world, and his political donations were beginning to

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Speaker 2: pay off as well.

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Speaker 5: Thank you Chairwater, as ranking Member mckenry, and all the

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Speaker 5: members of the committee for having me here today to testify.

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Speaker 5: It's an honor to be here.

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Speaker 2: He spoke at a congressional hearing on the need for

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Speaker 2: crypto regulations.

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Speaker 5: I think it is important and I think that is

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Speaker 5: healthy that the industry will be regulated.

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Speaker 2: Sam appeared to have something up his sleep, and he

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Speaker 2: had a trusted sidekick to help him all along the way.

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Speaker 3: I think we've always enjoyed working together and thinking together,

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Speaker 3: at least I like to think.

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Speaker 7: So.

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Speaker 2: That's Sam's father, Joe Bankman, talking about working with his son. Joe,

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Speaker 2: a Stanford law professor began helping his son early in

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Speaker 2: his crypto ventures. Joe would eventually focus on two specific areas.

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Speaker 2: The first was ftx's charity endeavors.

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Speaker 3: That's about half of what I do, and the other

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Speaker 3: half of what.

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Speaker 8: I do is regulation broadly speaking, so it's the bills

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Speaker 8: moving through Congress, it's whether we'll get approval from a

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Speaker 8: regulatory agency, things like that.

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Speaker 2: Joe Bankman was a lawyer, so the formulation of regulations

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Speaker 2: aligned well with his expertise.

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Speaker 3: In fact, all regulatory changes anytime you work through the government,

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Speaker 3: that's really legally in KENSIB.

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Speaker 2: Regulations also played a pivotal role in the world of finance.

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Speaker 2: In effect, they act as the gatekeeper of who does

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Speaker 2: and does not get to enter the playing field. So

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Speaker 2: how regulations are crafted can mean life or death for

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Speaker 2: a company. By the close of twenty twenty one, it

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Speaker 2: appeared that Sam and his father had a plan in motion.

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Speaker 2: It looked as if they were trying to set up

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Speaker 2: a regulatory framework that would benefit Sam's array of crypto

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Speaker 2: companies while hurting his competition.

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Speaker 9: They wanted to create a monopoly, there's no question about it,

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Speaker 9: to match finance that's been.

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Speaker 2: Armstrong crypto enthusiast and creator of bitboycrypto dot com.

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Speaker 9: So here was the plan. We'll bring in all of

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Speaker 9: these other companies to cover lending, to cover defive, to

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Speaker 9: cover exchanges, to cover deriva trading, margin trading. They wanted

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Speaker 9: to bring kind of one company in that did everything

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Speaker 9: from every niche in the crypto world, bring them up

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Speaker 9: under FTX. Then they were going to create the Federal

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Speaker 9: BIL license.

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Speaker 2: Basically a proposed federal license to operate in the US

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Speaker 2: crypto industry, and.

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Speaker 9: They were going to be the only show in town

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Speaker 9: that had the license, and all their companies would get

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Speaker 9: the license. Due to being under their umbrella, they did

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Speaker 9: have such a head start on anybody else trying to

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Speaker 9: apply to get the license that they would just be

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Speaker 9: able to win from the ground up. So that was

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Speaker 9: kind of the plan.

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Speaker 2: But in order to have real influence over the parameters

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Speaker 2: of that license, Sam would need to position himself as

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Speaker 2: the authoritative voice of the crypto world, so he launched

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Speaker 2: one of the most audacious branding campaigns that the world

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Speaker 2: of finance had ever seen. Sam had already signed Tom

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Speaker 2: Brady and Giselle as FTX folkspersons. He then expanded into

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Speaker 2: the NBA.

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Speaker 10: Crypto exchange FTX, spending one hundred and thirty five million

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Speaker 10: to rename the home of the Miami Heat.

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Speaker 11: This is the first time a crypto firm has won

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Speaker 11: naming rights to a major US sports venue.

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Speaker 2: FTX would eventually sign a deal with Steph Curry and

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Speaker 2: Shaquille O'Neal. He infiltrated Super Bowl fifty six with an

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Speaker 2: ad featuring comedian Larry David. Like I was saying, it's FTX,

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Speaker 2: it's a safe and easy way to get into crypto,

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Speaker 2: I don't think so. Sam carpet bombed young entrepreneurs with

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Speaker 2: YouTube influencer endorsements.

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Speaker 12: Now, before we get to part two, I have to

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Speaker 12: give a quick shout out for today's sponsor.

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Speaker 13: It's FTX US.

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Speaker 4: You've probably heard of them before.

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Speaker 6: One of the largest US regulated cryptocurrency exchanges in the world,

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Speaker 6: trusted by millions of users to buy, solid track and

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Speaker 6: trade both crypto and NFTs.

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Speaker 14: They've been the ones that are going out investing in

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Speaker 14: and buying other crypto exchanges that are struggling.

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Speaker 6: I'll explain just a moment. Right after I mentioned that

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Speaker 6: if you want to take advantage of buying the crypto

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Speaker 6: dipp check out our sponsor today FTX.

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Speaker 2: Sam also wanted to win over traditional finance who'd been

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Speaker 2: a bit skeptical about crypto. Investor Kevin O'Leary initially had

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Speaker 2: a negative impression of the crypto industry, but a long

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Speaker 2: came Sam bankman Fried, who lathered the Shark Tank star

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Speaker 2: with greenbacks, and Kevin remarkably did a one to eighty

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Speaker 2: on the subject for the entire finance community to see.

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Speaker 15: I don't know where you are in crypto.

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Speaker 14: You were so negative for a while, then you got

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Speaker 14: totally positive.

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Speaker 16: Do you own bitcoin now, Kevin?

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Speaker 17: What's your posision at crypto right now?

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Speaker 18: You do?

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Speaker 14: I have millions of dollars. Twenty percent of my portfolio

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Speaker 14: is now in crypto currencies and blockchain. Well, you have

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Speaker 14: to be diversified. I own thirty two different positions, including

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Speaker 14: equity and FTX, and I have to disclose I'm a

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Speaker 14: paid spokesperson for that company.

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Speaker 2: And Sam pulled in his new spokesmodel, Giselle, to reach

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Speaker 2: into the world of luxury.

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Speaker 4: Today, we're going to.

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Speaker 10: Be discussing Giselle and Sam's shared mission philanthropy, which is

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Speaker 10: the theme of our spring summer twenty twenty two luxury campaign.

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Speaker 2: The FTX founder joined Jizelle in a print out that

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Speaker 2: was published in America's most prestigious magazines, including Vogue, Dandy, Fair, GQ,

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Speaker 2: and The New Yorker. The two took the stage at

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Speaker 2: the Bahamas Cryptoconference to announce the campaign.

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Speaker 4: And I think it's really important to think about what

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Speaker 4: are we leaving behind, because either we're going to be

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Speaker 4: part of the solution or were going to be part

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Speaker 4: of the problem.

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Speaker 5: I think when you start thinking about the trillions of

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Speaker 5: people who haven't been worn yet who are going to

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Speaker 5: inherit this or from us, the things that we do

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Speaker 5: that sort of impact what it is exactly that we're

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Speaker 5: passing down to them are just incredibly important and magnified

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Speaker 5: way beyond the scope of almost anything else that we do.

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Speaker 2: Sam was attracting some of the most gifted virtue signalers

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Speaker 2: on the planet. Former President Clinton, popstar Katy Perry, and

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Speaker 2: former Prime Minister Tony Blair all attended his event. He

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Speaker 2: amped up his effective altruism message and the media sopped

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Speaker 2: it up.

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Speaker 16: Crypto billionaire Sam bankman Fred is doubling down on his

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Speaker 16: embrace of effective altruism This is something that he's talked

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Speaker 16: about so much that he's really in crypto so that

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Speaker 16: he can give the money away, essentially finding an avenue

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Speaker 16: where you can make the most money to give away

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Speaker 16: the most.

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Speaker 4: He's fully committed a giveving millions and now billions of

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Speaker 4: dollars to charities again.

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Speaker 2: Ben Armstrong of bitboycrypto dot com.

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Speaker 9: Alameda has the greatest propaganda arm we've seen since the USSR.

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Speaker 9: They use a combination of paid engagement bots, paid influencers,

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Speaker 9: paid spokespeople, paid media in order to control a narrative.

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Speaker 2: The FTX branding effort may have looked as if it

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Speaker 2: was intended for the general public, but that was a

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Speaker 2: peripheral benefit. Its ultimate target was really a very small

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Speaker 2: audience in Washington, DC that included the SEC chairman Gary Gensler.

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Speaker 1: In March twenty twenty two, Sam reportedly met with Gensler

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Speaker 1: to discuss regulations on crypto exchanges like FTX, and Sam

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Speaker 1: had an inside track with Gensler. The CEO of Alameda Research,

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Speaker 1: Caroline Ellison, was the daughter of Gensler's old boss when

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Speaker 1: he worked at MIT. Sam's plan appeared to be falling

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Speaker 1: into place. What the problem was that a crypto winter

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Speaker 1: was brewing, and Sam appeared completely oblivious to the coming storm.

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Speaker 6: When you've become successful and you buy your own media

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Speaker 6: and you surround yourself with people who only tell you

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Speaker 6: that what you're reading on the cover of Forbes is

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Speaker 6: actually a reality, you begin to believe it.

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Speaker 1: That's a representative from Doomberg, one of the most widely

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Speaker 1: read finance newsletters on subscription based platform Substack.

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Speaker 6: Sam Bankmyfree spent a lot of money to buy great press.

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Speaker 6: When you read it, it's easy to forget that you

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Speaker 6: paid for it and it's not real. And then anybody

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Speaker 6: who points out to you that, hey, maybe we have

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Speaker 6: these religious here and yes, I understand this is part

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Speaker 6: of your pr strategy, but we should consider AB and

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Speaker 6: C gets eliminated from your inner circle. And the only

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Speaker 6: people who remain in your inner circle are people who

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Speaker 6: are willing to lie to you about how great you are.

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Speaker 6: So then you come very insulated.

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Speaker 1: This was undoubtedly sam situation, and because of it, he

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Speaker 1: thought he'd built a rock of Gibraltar, but he was

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Speaker 1: about to figure out that he'd really erected a house

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Speaker 1: of cards. Traditional dog food is dead food, which is

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Speaker 1: why you could sit on a shelf for years because

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Speaker 1: it's lifeless, but Rough Greens brings the nutrition back. Adriana

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Speaker 1: and I use rough Greens to make sure our furry

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Speaker 1: come alive. Welcome back to red pilled America. So as

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Speaker 1: Sam Bankman Freed was soaking in the adoration of his

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Speaker 1: charm offensive, a cryptostorm was brewing. The early signs began

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Speaker 1: to surface right around the time Sam testified before Congress

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Speaker 1: in December twenty twenty one. The signal was, of course,

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Speaker 1: the original cryptocurrency.

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Speaker 13: Bitcoin is having a December to forget. Along with the

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Speaker 13: other major cryptos.

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Speaker 16: Bitcoin is hovering just below the fifty thousand dollars level

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Speaker 16: heading into the new year. That's after hitting seven eight

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Speaker 16: thousand just last month.

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Speaker 1: As the new year got underway, the decline continued.

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Speaker 16: Bitcoin now trading below that thirty seven thousand dollars handle,

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Speaker 16: hitting a one month low.

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Speaker 1: At first, people choked up the dip to just the

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Speaker 1: volatility of the crypto market, but by early May twenty

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Speaker 1: twenty two, the cracks and the dam burst open, and

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Speaker 1: many of the companies propped up by the crypto bubble

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Speaker 1: began to pop.

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Speaker 16: Crypto obviously right now getting crushed.

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Speaker 10: Tonight, a massive selloff of cryptocurrency, erasing more than two

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Speaker 10: hundred billion dollars from the entire market in a single day,

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Speaker 10: the price of bitcoin plunging to its lowest level in

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Speaker 10: sixteen months.

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Speaker 19: Gone down to its slowest point for quite a while.

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Speaker 19: And that's something that doesn't usually do. Actually going down

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Speaker 19: to a low pass the year before has only ever

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Speaker 19: happened once before. This is quite a big deal. More

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Speaker 19: than three hundred billion dollars was wiped out just in

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Speaker 19: the last week.

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Speaker 20: What has happened?

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Speaker 18: What's gone wrong?

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Speaker 16: I mean, this is the definition of a black swan event.

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Speaker 18: This is the Lehman Brothers coll of crypto.

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Speaker 10: The numbers sending some investors spiraling, fearing they could lose

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Speaker 10: it all.

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Speaker 9: One minute, it looks like the market's going to rip.

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Speaker 21: The next minute, it looks like the market's going to dip.

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Speaker 16: And I don't know what in the world's going on.

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Speaker 20: So I'm out, no moss in totally.

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Speaker 2: It seems crazy to say, but I'm then around thirty

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Speaker 2: five thousand dollars.

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Speaker 4: I actually lost over half my portfolio.

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Speaker 3: I lost one point six million on Luna and then

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Speaker 3: I put it in another too.

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Speaker 10: D can at those trading platform Coinbase now warning that

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Speaker 10: if they go belly up, customers could lose all their

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Speaker 10: crypto investments, which aren't technically subject to bankruptcy protections.

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Speaker 16: And if you're a retail investor, get you're not protected,

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Speaker 16: right or does it depend on jurisdiction, You're.

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Speaker 19: Not protected pretty much anyway, there's no protections at all.

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Speaker 19: Just like with the rest of crypts, any money you

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Speaker 19: put in is entirely at your risk.

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Speaker 21: Probably with bitcoin, there's something I underpinning. There's no government,

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Speaker 21: there's no company, there is no rent, there's something to

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Speaker 21: actually kind of prop up the value of cryptocurrency. Stories

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Speaker 21: out of New York of people losing half million dollar fortunes, cars, homes,

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Speaker 21: literally the whole lot because they punt it on this stuff.

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Speaker 21: I said, when everyone's everyone's happy. As soon as that

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Speaker 21: turns around, it can really hurt.

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Speaker 5: You may think it sound like a Ponzi scape.

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Speaker 6: What we have seen is nothing short of carnage.

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Speaker 16: It's quite horrible to watch.

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Speaker 12: This event is probably the most destructive wealth event in

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Speaker 12: the history of crypto.

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Speaker 1: By the summer of twenty twenty two, company after company

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Speaker 1: that either created their own cryptocurrency or had most of

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Speaker 1: their holdings in some new crypto tooken came crashing down.

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Speaker 1: How could this have happened? How could an industry that

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Speaker 1: had been heralded by financial media been celebrated as the

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Speaker 1: next big thing come crashing down in a matter of days. Well,

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Speaker 1: a lot of it had to do with those new

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Speaker 1: types of cryptocurrency tokens entering the market. Remember when Sam's father,

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Speaker 1: Joe Bankman, learned about initial coin offerings or icos.

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Speaker 18: Now, in my own personal opinion, the large majority of

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Speaker 18: these icos are frauds or they're going to fail.

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Speaker 13: I'll totally agree with that.

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Speaker 1: By the way, Well, it turns out that by twenty

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Speaker 1: twenty two, the industry had become littered with these fraud

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Speaker 1: coins as the crypto winter was slowly building. Sam went

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Speaker 1: on a Bloomberg podcast and used an analogy to explain

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Speaker 1: how many of these cryptotokens come into existence.

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Speaker 4: Where'd you start?

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Speaker 5: You start with a company that builds the blocks, and

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Speaker 5: in practice this box, they probably dressed it up to

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Speaker 5: look like a life changing, world altering protocol that's going

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Speaker 5: to replace all the big banks in thirty eight days

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Speaker 5: or whatever. Maybe for now, actually pretend it does literally

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Speaker 5: nothing is just a box.

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Speaker 1: Sam went on with this box analogy. He suggested that

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Speaker 1: the primary function of this imaginary box was for users

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Speaker 1: to put their currency in it, for which they'd receive

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Speaker 1: an IOU, and then later they could use that IOU

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Speaker 1: to pull their cryptocurrency out of the box. As Sam

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Speaker 1: told it, the controllers of this box then produce a cryptotoken.

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Speaker 5: We'll call it what for X token, and they're going

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Speaker 5: to give them a way for free to everyone uses

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Speaker 5: the box. So anyone who goes takes some money puts

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Speaker 5: in the box. Each day they're going to air drop

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Speaker 5: one percent of the X tokens program amongst everyone who's

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Speaker 5: put money in the box. That's for now, what X

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Speaker 5: token does. It gets given away to the box people.

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Speaker 5: And now what happens, Well, X token has some market cap,

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Speaker 5: let's say it's twenty million dollars market cap in the

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Speaker 5: world that we're in. If you do this, everyone's going

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Speaker 5: to be like, ooh, box token. Maybe it's cool. If

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Speaker 5: you buy a box token, you know that's going to

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Speaker 5: appear on Twitter and I'll have a twenty million dollar market.

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Speaker 4: Cap it shouldn't have any market cap in Siri, but

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Speaker 4: practice sale always do.

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Speaker 5: Okay, that's right, So X tokens being given out each day,

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Speaker 5: all these like cisticated firms are like, oh, that's interesting.

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Speaker 5: Like if the total amount of money in the box

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Speaker 5: is one hundred million dollars, then it's gonna yield sixteen

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Speaker 5: million dollars this year in X tokens being given out

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Speaker 5: for it. That's a sixteen percent return. That's pretty good.

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Speaker 5: We'll put a little bit more in and maybe that

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Speaker 5: happens until there are two hundred million dollars in the box.

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Speaker 5: So you know, sophisticated traders and or people on crypto

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Speaker 5: Twitter go and put two hundred million dollars in the

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Speaker 5: box collectively, and they start getting these X tokens for it, right,

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00:18:13,480 --> 00:18:15,600
Speaker 5: and now all of a sudden, it's like wow, people

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Speaker 5: just decide to put two hundred million dollars in the box.

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Speaker 4: This is a pretty.

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Speaker 5: Cool box, right, Like this is a valuable box, as

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Speaker 5: demonstrated by all the money that people have apparently decided

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Speaker 5: should be in the box. And where we to say

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Speaker 5: that they're wrong about that? Like boxes can be great. Look,

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Speaker 5: I love box as much as the next guy, and

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00:18:34,960 --> 00:18:37,320
Speaker 5: so then you know, X token price goes way up

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00:18:37,320 --> 00:18:39,640
Speaker 5: and now it's at one hundred and thirty million dollars

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00:18:39,680 --> 00:18:42,480
Speaker 5: market cap token because of you know, the bullishness of

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Speaker 5: people's usage of the box, and now all of a sudden,

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00:18:46,480 --> 00:18:48,159
Speaker 5: of course, the smart money. It's like, go, wow, like

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Speaker 5: this thing's now yielding like sixty percent a year an

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Speaker 5: X tokens, right, so they pour another three hundred million

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Speaker 5: dollars in the box and you get a site, and

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Speaker 5: then it goes to infinity and then everyone makes money.

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Speaker 1: The two journalists were a bit stunned by his explanation.

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Speaker 13: I think of myself as like a fairly cynical person,

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00:19:10,119 --> 00:19:14,480
Speaker 13: and yep, that was so much more cynical. Yes, I

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Speaker 13: would have described farming like you're just like, well, I'm

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Speaker 13: in the ponzi business and it's pretty good.

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Speaker 4: And did any of this require any sort of like

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Speaker 4: economic cases. Just like other people put money in the box,

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Speaker 4: and so I'm going to too, and then it's more valuables.

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Speaker 4: They're going to put more money in. And at no

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Speaker 4: point in the cycle did it seem to like describe

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Speaker 4: any sort of like economic purpose.

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Speaker 13: Can you comment on like the sustainability of that, yeah,

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Speaker 13: because like you know, on the one hand, you're like, well,

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Speaker 13: a trillion dollars in social money is going to come

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Speaker 13: into a bitground. On the other hand, you're like, basically,

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Speaker 13: there are a lot of ponzis that have done really well.

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Speaker 5: Okay, cool, I'll say, on the cynical route, think about,

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Speaker 5: like cynically, what could happen here? Well, okay, so you've

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Speaker 5: got things. Box is kind of dumb, but like, what's

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Speaker 5: the endgame?

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Speaker 12: Right?

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Speaker 5: His boxes were zero?

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Speaker 1: Obviously, Sam Bankman Freed inadvertently described the nature of much

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00:20:05,480 --> 00:20:11,919
Speaker 1: of these cryptotokens. They're built out of nothing. Many of

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Speaker 1: the boxes or companies were worth zero.

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Speaker 6: Again, Dumberg I firmly believe these are all totally unrestared,

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00:20:19,000 --> 00:20:23,200
Speaker 6: wildcat banking ponzi schemes with nothing but thin air backing them.

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Speaker 1: By Midsummer twenty twenty two, Sam Bankman Freed was bailing

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Speaker 1: out cryptocurrency firms left and right. The media dubbed him

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Speaker 1: the crypto world's lender of last resort, but his actions

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00:20:34,960 --> 00:20:38,400
Speaker 1: were not benevolent. Many believed he was bailing out companies

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00:20:38,440 --> 00:20:42,280
Speaker 1: because of fear the insolvency contagion could spread to his firm.

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Speaker 1: Sam even began hinting that there were more collapses to come.

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Speaker 1: In an interview with Forbes, Sam stated, quote, there are

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Speaker 1: some third tier exchanges that are already secretly insolvent end quote.

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00:20:55,240 --> 00:20:58,040
Speaker 1: Little did anyone know that it was Sam that was

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00:20:58,080 --> 00:21:06,560
Speaker 1: the one that was in trouble. Life can be pretty

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Speaker 2: dot com and click join in the topmenu. Join today

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00:22:23,040 --> 00:22:25,600
Speaker 2: and help us save America, one story at a time.

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00:22:27,800 --> 00:22:30,640
Speaker 2: Welcome back to Red Pilled America. So just as Sam

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00:22:30,680 --> 00:22:34,240
Speaker 2: Bankman Freed looked like the bailout savior during the crypto winter,

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00:22:34,640 --> 00:22:38,160
Speaker 2: what no one yet knew was Sam's companies were teetering

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00:22:38,240 --> 00:22:41,880
Speaker 2: on the edge as well. His crypto trading firm, Alameda Research,

444
00:22:42,080 --> 00:22:45,720
Speaker 2: was nearing insolvency. He was no longer friends with cz

445
00:22:46,000 --> 00:22:50,080
Speaker 2: of rival Crypto Exchange Finance. Sam had nowhere to turn

446
00:22:50,160 --> 00:22:54,320
Speaker 2: but the mirror. But then something happened. In late September

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00:22:54,359 --> 00:22:57,639
Speaker 2: twenty twenty two, one hundred and seventy three million FTT

448
00:22:57,800 --> 00:23:03,520
Speaker 2: cryptotokens materialized, and then they were miraculously given to Alameda Research.

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00:23:03,960 --> 00:23:07,240
Speaker 2: At the time, the trading price for FTT tokens was

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00:23:07,320 --> 00:23:11,240
Speaker 2: roughly twenty four dollars each. This fresh minting of FTT

451
00:23:11,280 --> 00:23:15,879
Speaker 2: tokens put four billion dollars on Alameda Research's balance sheet.

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00:23:16,280 --> 00:23:19,480
Speaker 2: In one fell swoop, the supply of FTT tokens in

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00:23:19,520 --> 00:23:23,320
Speaker 2: existence increased by a reported one hundred and twenty four percent.

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00:23:24,040 --> 00:23:27,040
Speaker 2: Just like the Federal Reserves dollar printing press, these FTT

455
00:23:27,200 --> 00:23:35,000
Speaker 2: tokens were just created out of thin air. As anyone

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00:23:35,040 --> 00:23:38,440
Speaker 2: with an elementary understanding of economics would know, the act

457
00:23:38,480 --> 00:23:41,760
Speaker 2: of just printing a currency from nothing could not immediately

458
00:23:41,800 --> 00:23:44,880
Speaker 2: add value to a company. The only institution that can

459
00:23:44,880 --> 00:23:47,800
Speaker 2: get away with that is the Federal Reserve. Where did

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00:23:47,840 --> 00:23:50,680
Speaker 2: this value come from? How was it that these FTT

461
00:23:50,840 --> 00:23:53,120
Speaker 2: tokens were valued at twenty four dollars each?

462
00:23:53,680 --> 00:23:57,440
Speaker 20: Again, Ben Armstrong, FTT was one of the ways that

463
00:23:57,640 --> 00:24:02,680
Speaker 20: SBF would pump up the net value of Alameda and FTX.

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00:24:03,040 --> 00:24:06,080
Speaker 9: They basically wash trade FTT back and forth between the

465
00:24:06,119 --> 00:24:06,879
Speaker 9: two companies.

466
00:24:07,080 --> 00:24:11,159
Speaker 2: In other words, they gained the system on Wall Street

467
00:24:11,640 --> 00:24:14,480
Speaker 2: wash trading is an illegal way for traders to manipulate

468
00:24:14,560 --> 00:24:18,040
Speaker 2: the market. A buyer and seller, for sometimes one investor

469
00:24:18,080 --> 00:24:21,080
Speaker 2: acting as both the buyer and seller, illegally collude to

470
00:24:21,080 --> 00:24:24,160
Speaker 2: sell a particular stock between each other to mislead other

471
00:24:24,240 --> 00:24:27,359
Speaker 2: traders into believing that the trading volumes for the stock

472
00:24:27,520 --> 00:24:30,719
Speaker 2: are higher than they actually are. Their goal through this

473
00:24:30,920 --> 00:24:33,720
Speaker 2: wash trading is to trick others into trading the same

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00:24:33,800 --> 00:24:37,840
Speaker 2: stock and in the process illegitimately increasing its price. To

475
00:24:38,119 --> 00:24:40,920
Speaker 2: wash trade in the crypto world, you just swap out

476
00:24:40,960 --> 00:24:45,840
Speaker 2: stocks for cryptotokens like FTT. The process that Sam allegedly

477
00:24:45,920 --> 00:24:48,199
Speaker 2: used to prop up the value of his companies was

478
00:24:48,280 --> 00:24:51,720
Speaker 2: not a new process. In finance. The scheme looks something

479
00:24:51,840 --> 00:24:57,040
Speaker 2: like this. First, you create a stock, in this case,

480
00:24:57,119 --> 00:25:00,480
Speaker 2: a cryptotoken, and you retain the majority of those tokens

481
00:25:00,520 --> 00:25:03,480
Speaker 2: in your possession. Then you pump up the price of

482
00:25:03,480 --> 00:25:07,280
Speaker 2: those tokens through wash trading, or buying them with customer assets,

483
00:25:07,560 --> 00:25:11,080
Speaker 2: or through creating propaganda campaigns, whatever you need to do

484
00:25:11,200 --> 00:25:13,399
Speaker 2: to drive up the price of the token, and in

485
00:25:13,440 --> 00:25:17,800
Speaker 2: a largely unregulated industry like crypto, it wouldn't be that hard. Now,

486
00:25:17,800 --> 00:25:20,919
Speaker 2: since you've retained the majority of the tokens. Someone with

487
00:25:20,960 --> 00:25:23,600
Speaker 2: a huge batch of said tokens can't lower the price

488
00:25:23,640 --> 00:25:25,280
Speaker 2: of them by selling them on the market at a

489
00:25:25,359 --> 00:25:31,200
Speaker 2: rock bottom price. Now, with this artificially high value token

490
00:25:31,280 --> 00:25:34,320
Speaker 2: on your balance sheet, your company looks like it's worth

491
00:25:34,320 --> 00:25:36,760
Speaker 2: a ton of money. So you can go to the

492
00:25:36,800 --> 00:25:39,959
Speaker 2: banks asking for loans with the tokens as collateral, or

493
00:25:40,000 --> 00:25:43,040
Speaker 2: you can go to investors asking for investments, because hey,

494
00:25:43,359 --> 00:25:46,280
Speaker 2: look at my balance sheet, I've got millions upon millions

495
00:25:46,320 --> 00:25:49,520
Speaker 2: of dollars. The banks and investors want in because they

496
00:25:49,520 --> 00:25:51,040
Speaker 2: don't want to miss out on the chance to make

497
00:25:51,080 --> 00:25:55,640
Speaker 2: easy money. They give you real dollars, not cryptotokens, and

498
00:25:55,680 --> 00:25:57,480
Speaker 2: now you can use that money to go on a

499
00:25:57,520 --> 00:26:00,879
Speaker 2: wild spending spree, like buying the naming rights to stadiums

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00:26:01,040 --> 00:26:03,919
Speaker 2: or locking arms with the biggest supermarket in the world.

501
00:26:04,560 --> 00:26:06,440
Speaker 2: The only thing you have to do is keep your

502
00:26:06,480 --> 00:26:09,320
Speaker 2: token price high, so the banks keep lending you money

503
00:26:09,400 --> 00:26:12,840
Speaker 2: and investors keep buying into your business. But the problem

504
00:26:12,920 --> 00:26:15,439
Speaker 2: now is the people that hold your token in the

505
00:26:15,480 --> 00:26:18,639
Speaker 2: public want to take advantage of the high prices, and

506
00:26:18,720 --> 00:26:22,119
Speaker 2: they sell your token in the market. If enough people

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00:26:22,200 --> 00:26:24,800
Speaker 2: do that, flooding the market would supply. When there was

508
00:26:24,840 --> 00:26:28,000
Speaker 2: no real increase in demand, then the token price drops,

509
00:26:28,160 --> 00:26:30,919
Speaker 2: as does the value of your company, making it harder

510
00:26:30,920 --> 00:26:34,000
Speaker 2: for you to get loans or attract investors. So now

511
00:26:34,040 --> 00:26:37,240
Speaker 2: you have to continue the process all over again, pump

512
00:26:37,320 --> 00:26:39,399
Speaker 2: up the price of the token through wastch trading, or

513
00:26:39,480 --> 00:26:42,119
Speaker 2: using customer assets to buy the tokens at a higher price,

514
00:26:42,520 --> 00:26:45,520
Speaker 2: or any other scheme, whatever it takes to raise the

515
00:26:45,520 --> 00:26:49,640
Speaker 2: token price. Eventually you run out of money. That's when

516
00:26:49,640 --> 00:26:52,720
Speaker 2: you come up with an idea. If you control the token,

517
00:26:53,000 --> 00:26:55,200
Speaker 2: you can just print up more of them and place

518
00:26:55,240 --> 00:26:57,480
Speaker 2: them in your account to make your company look more

519
00:26:57,560 --> 00:27:03,439
Speaker 2: valuable on paper. You basically create cryptotokens out of thin airers.

520
00:27:03,600 --> 00:27:06,000
Speaker 2: That that is what Sam bankmin Freed did in this

521
00:27:06,160 --> 00:27:10,920
Speaker 2: moment of crisis at the end of September twenty twenty two.

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00:27:22,240 --> 00:27:25,600
Speaker 20: Again Ben Armstrong, so you just have a long history

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00:27:26,080 --> 00:27:29,600
Speaker 20: of Sam creating money out of nothing, and even there's

524
00:27:29,600 --> 00:27:31,320
Speaker 20: a video where he explains how he does it.

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00:27:31,560 --> 00:27:33,680
Speaker 9: And when they needed more money, they would just print

526
00:27:33,720 --> 00:27:36,560
Speaker 9: more FTT and then they would be able to immediately

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00:27:36,600 --> 00:27:38,280
Speaker 9: add value to their balance sheets.

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00:27:40,359 --> 00:27:43,600
Speaker 2: By late October twenty twenty two, Sam must have felt

529
00:27:43,640 --> 00:27:46,960
Speaker 2: like he'd stabilize the businesses because he became a little

530
00:27:47,000 --> 00:27:51,679
Speaker 2: bit cocky. At the time, Finance ftx's primary competitor was

531
00:27:51,720 --> 00:27:56,800
Speaker 2: apparently in some legal trouble, so Sam decided to sucker

532
00:27:56,840 --> 00:28:01,439
Speaker 2: punch Finance's owner CZ. He jumped online and tagged his

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00:28:01,480 --> 00:28:04,320
Speaker 2: old front of me in a tweet suggesting that CZ

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00:28:04,640 --> 00:28:07,280
Speaker 2: wasn't even allowed to go to Washington, d C. Because

535
00:28:07,280 --> 00:28:10,800
Speaker 2: of his legal issues. The public potshop must have burned

536
00:28:10,800 --> 00:28:14,800
Speaker 2: CZ up. The stage was set for an epic chess move.

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00:28:15,520 --> 00:28:18,920
Speaker 2: In a stunning coincidence, just a few days after Sam

538
00:28:19,000 --> 00:28:23,280
Speaker 2: sucker punch CZ, Alameda Research's balance sheet leaked to the press.

539
00:28:23,720 --> 00:28:26,800
Speaker 2: Crypton New's outfit Coindesk was the first to publish a

540
00:28:26,840 --> 00:28:30,880
Speaker 2: report on it, claiming that Alameda Research had fourteen point

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00:28:31,000 --> 00:28:34,560
Speaker 2: six billion dollars in assets. But here's the kicker. That

542
00:28:34,640 --> 00:28:38,840
Speaker 2: value was almost entirely derived from FTT tokens. In other words,

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00:28:38,960 --> 00:28:42,160
Speaker 2: it was Sam Bankman's breed's own token that was propping

544
00:28:42,240 --> 00:28:46,160
Speaker 2: up his company, not real US dollars, gold or some

545
00:28:46,240 --> 00:28:51,080
Speaker 2: other universally recognized asset, not even bitcoin. The coin desk

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00:28:51,200 --> 00:28:54,080
Speaker 2: report got the ball rolling, but it was someone else

547
00:28:54,160 --> 00:28:57,680
Speaker 2: that Dug Deeper, an investigative journalist that goes by the

548
00:28:57,720 --> 00:29:01,960
Speaker 2: moniker Dirty Bubble Media, also received the leaked Alameda balance

549
00:29:01,960 --> 00:29:05,600
Speaker 2: sheet and he expanded on the coindesk original report.

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00:29:05,720 --> 00:29:07,760
Speaker 12: Two days later, I published an article.

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00:29:07,640 --> 00:29:10,000
Speaker 2: That's Dirty Bubble Media.

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00:29:09,120 --> 00:29:12,400
Speaker 12: That basically took that information, plus the information I saw

553
00:29:12,440 --> 00:29:14,360
Speaker 12: in their balance sheet, the actual copy of it, and

554
00:29:14,880 --> 00:29:16,600
Speaker 12: basically broke it down in a way that people can

555
00:29:16,680 --> 00:29:19,440
Speaker 12: understand it to explain why it was as bad as

556
00:29:19,560 --> 00:29:23,280
Speaker 12: it was. Essentially, they were using worthless assets as collateral

557
00:29:23,320 --> 00:29:27,080
Speaker 12: for loans and that they were insolvent in very real terms.

558
00:29:30,440 --> 00:29:33,040
Speaker 2: The news of his article spread quickly within the crypto

559
00:29:33,080 --> 00:29:34,840
Speaker 2: communities on Twitter and YouTube.

560
00:29:35,040 --> 00:29:38,680
Speaker 7: Newses came out that FTS is actually insolvent, and Dirty

561
00:29:38,680 --> 00:29:41,320
Speaker 7: Bubble Media actually went ahead and did a lot of

562
00:29:41,360 --> 00:29:42,080
Speaker 7: digging up.

563
00:29:42,000 --> 00:29:46,080
Speaker 2: All The reporting sparked an idea in CZ's mind. Again,

564
00:29:46,240 --> 00:29:47,400
Speaker 2: Ben Armstrong.

565
00:29:47,160 --> 00:29:50,240
Speaker 9: So bini Itz and FTX obviously had beef with one

566
00:29:50,280 --> 00:29:52,320
Speaker 9: another at that point, but it goes back much further.

567
00:29:52,760 --> 00:29:55,360
Speaker 9: When you really look at CZ verse Sam. For about

568
00:29:55,400 --> 00:29:59,480
Speaker 9: six months, there was a deterioration of that relationship. Is

569
00:29:59,520 --> 00:30:01,560
Speaker 9: I believe CZ found out more and more about what

570
00:30:01,680 --> 00:30:02,680
Speaker 9: Sam was doing.

571
00:30:03,280 --> 00:30:06,040
Speaker 2: Caught wind that Sam was trying to monopolize the crypto

572
00:30:06,080 --> 00:30:10,520
Speaker 2: industry by influencing federal regulations. This didn't sit well with CZ.

573
00:30:11,120 --> 00:30:13,440
Speaker 2: He no doubt felt that it was a direct attack

574
00:30:13,480 --> 00:30:14,640
Speaker 2: on his company finance.

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Speaker 9: And then at some point he found something out that

576
00:30:16,880 --> 00:30:19,480
Speaker 9: was like, Okay, now I can't look back, I can't

577
00:30:19,480 --> 00:30:21,840
Speaker 9: turn away. At this point, I got to slam down

578
00:30:21,880 --> 00:30:24,640
Speaker 9: on this and do something. That's what he did. He

579
00:30:24,760 --> 00:30:26,840
Speaker 9: announced he was doing it, and he did.

580
00:30:26,640 --> 00:30:31,400
Speaker 2: It, and CZ had just the right thing to take

581
00:30:31,440 --> 00:30:35,160
Speaker 2: out Sam. Remember those FTT tokens that Sam gave CZ

582
00:30:35,360 --> 00:30:38,600
Speaker 2: when he bought out Caz's share in FTX. Well, CZ

583
00:30:38,880 --> 00:30:42,040
Speaker 2: held onto those FTT tokens and a little over a

584
00:30:42,120 --> 00:30:46,520
Speaker 2: year later those tokens transformed into digital scud missiles on

585
00:30:46,560 --> 00:30:54,680
Speaker 2: Sam's business. If CAZ decided to flood the market with them,

586
00:30:54,880 --> 00:30:58,640
Speaker 2: the price of FTT tokens would plummet, bringing Sam Bankman

587
00:30:58,720 --> 00:31:02,960
Speaker 2: Freed's entire scheme to an end. You see, Sam's company

588
00:31:03,320 --> 00:31:07,320
Speaker 2: were holding the majority of FTT tokens. The company's enormous

589
00:31:07,400 --> 00:31:11,280
Speaker 2: value was derived from them, so Sam needed the FTT

590
00:31:11,440 --> 00:31:14,120
Speaker 2: token price to stay high so that he could continue

591
00:31:14,120 --> 00:31:16,760
Speaker 2: to raise money based on their high value. If the

592
00:31:16,800 --> 00:31:21,040
Speaker 2: price fell, so would Sam's house of cards. CC must

593
00:31:21,120 --> 00:31:24,360
Speaker 2: have seen the opening and he decided to take the

594
00:31:24,400 --> 00:31:27,120
Speaker 2: shot again. Dirty Bubble Media.

595
00:31:27,120 --> 00:31:29,720
Speaker 12: The head of the Finance Exchange, which is the largest

596
00:31:29,720 --> 00:31:32,760
Speaker 12: exchange in the world and previously an investor in FTX,

597
00:31:33,120 --> 00:31:35,560
Speaker 12: announced that they were going to be selling some six

598
00:31:35,680 --> 00:31:39,080
Speaker 12: hundred million dollars worth of this token that FTX had

599
00:31:39,080 --> 00:31:41,680
Speaker 12: created out of thin air and was using a collateral.

600
00:31:42,000 --> 00:31:44,160
Speaker 12: Basically put them between a rock and a hard place.

601
00:31:44,240 --> 00:31:48,520
Speaker 12: So that, combined with the resulting panic sparked by my

602
00:31:48,640 --> 00:31:52,800
Speaker 12: reporting other reporting kind of led to withdrawal cascade.

603
00:31:52,960 --> 00:31:55,520
Speaker 2: In other words, there was a run on Sam's bank.

604
00:31:56,160 --> 00:31:59,920
Speaker 2: Fearing the FTX and Alameda Research were both insolvent, people

605
00:31:59,960 --> 00:32:02,000
Speaker 2: began withdrawing their funds from FTX.

606
00:32:02,320 --> 00:32:06,000
Speaker 7: Unfortunately, I have some bad news to report currently, a

607
00:32:06,080 --> 00:32:12,080
Speaker 7: bank run is happening on FTX. Its reserves, specifically, Etherium

608
00:32:12,560 --> 00:32:16,440
Speaker 7: is being drained off by the hundreds of millions right now.

609
00:32:16,800 --> 00:32:19,360
Speaker 2: Sam took to Twitter to try and calm the market.

610
00:32:19,560 --> 00:32:23,160
Speaker 15: Over the weekend, speculation rose about the solvency of FTX.

611
00:32:23,200 --> 00:32:26,720
Speaker 15: This came after a coined Ask report revealed Alimedd Research's

612
00:32:26,800 --> 00:32:31,680
Speaker 15: balance sheet is full of ftx's native token FTT so

613
00:32:31,800 --> 00:32:34,479
Speaker 15: FTX CEO Sam bankman Free took to Twitter this morning

614
00:32:34,720 --> 00:32:37,120
Speaker 15: to clear something up. He said that a competitor is

615
00:32:37,160 --> 00:32:40,840
Speaker 15: trying to attack the company with rumors. He then says

616
00:32:40,840 --> 00:32:45,040
Speaker 15: in the same tweet, ftx's fine assets are fine.

617
00:32:45,240 --> 00:32:48,880
Speaker 2: Alimeter Research to CEO Caroline Ellison tried to calm the

618
00:32:48,920 --> 00:32:52,360
Speaker 2: storm as well, tweeting the Alameda had assets not included

619
00:32:52,360 --> 00:32:55,360
Speaker 2: in the leaked balance sheet. To keep the FTT token

620
00:32:55,400 --> 00:32:58,960
Speaker 2: price from falling, she publicly offered to buy CZ's tokens

621
00:32:59,040 --> 00:33:01,640
Speaker 2: at the then market rate of twenty two dollars each

622
00:33:01,920 --> 00:33:03,680
Speaker 2: to keep him from putting in up for sale on

623
00:33:03,720 --> 00:33:07,680
Speaker 2: the open market. Cz turned her down. He must have

624
00:33:07,800 --> 00:33:19,000
Speaker 2: smelled blood. Cz then proceeded to flood the market with

625
00:33:19,080 --> 00:33:22,560
Speaker 2: the FTT tokens he possessed, and the price of ftx's

626
00:33:22,600 --> 00:33:27,240
Speaker 2: crypto coin plummeted. In just two days, FTT went from

627
00:33:27,280 --> 00:33:30,440
Speaker 2: twenty two dollars a token to just five dollars and

628
00:33:30,480 --> 00:33:33,800
Speaker 2: fifty cents a token. A day later, it dropped another

629
00:33:33,920 --> 00:33:37,959
Speaker 2: sixty percent. Sam desperately tried to raise over a billion

630
00:33:38,000 --> 00:33:42,120
Speaker 2: dollars from Silicon Valley, but no one bit, so Sam

631
00:33:42,160 --> 00:33:43,280
Speaker 2: took drastic action.

632
00:33:43,560 --> 00:33:47,600
Speaker 7: Breaking news. It appears that FTX has stocked with draws

633
00:33:47,760 --> 00:33:51,880
Speaker 7: for to pass basically four hours the jig was up.

634
00:33:51,840 --> 00:33:54,400
Speaker 14: And some people saying that if they log into FTX,

635
00:33:54,760 --> 00:33:56,600
Speaker 14: they have a bounce of zero.

636
00:33:56,760 --> 00:34:01,320
Speaker 12: Now FTX, the Big exchange, has filed for Chapter eleven bankruptcy.

637
00:34:01,680 --> 00:34:05,200
Speaker 12: I'm trying to understand exactly how a company, the second

638
00:34:05,320 --> 00:34:08,920
Speaker 12: largest crypto exchange in the world, has become.

639
00:34:08,720 --> 00:34:11,359
Speaker 4: Insolvent and followed for bankruptcy in the space of a week.

640
00:34:11,480 --> 00:34:15,279
Speaker 21: The company's controversial chief executive, Sam Bankman Freed, resigning a

641
00:34:15,400 --> 00:34:19,239
Speaker 21: CEO and will remain to assist in an orderly transition.

642
00:34:19,800 --> 00:34:23,000
Speaker 2: Sam Bankman Freed was eventually arrested. In addition to the

643
00:34:23,000 --> 00:34:26,000
Speaker 2: federal indictments of wirefraud and a list of other charges.

644
00:34:26,360 --> 00:34:29,239
Speaker 2: News began to surface it Sam was not necessarily the

645
00:34:29,280 --> 00:34:31,080
Speaker 2: effective altruis that he claimed to be.

646
00:34:31,320 --> 00:34:35,520
Speaker 1: The company FTX. Sam Bankmint Freed, himself and his.

647
00:34:35,680 --> 00:34:39,759
Speaker 4: Parents all owned around three hundred million dollars worth of

648
00:34:39,840 --> 00:34:42,000
Speaker 4: luxury or real estate out in the Bahamas.

649
00:34:42,040 --> 00:34:42,759
Speaker 20: Well, here's the thing.

650
00:34:43,040 --> 00:34:47,919
Speaker 18: If you're running any kind of currency operation and you're

651
00:34:47,960 --> 00:34:51,200
Speaker 18: involved in a polyamorous relationship with seven other people.

652
00:34:51,440 --> 00:34:54,480
Speaker 1: I gotta thank you whack ten ten other people totally.

653
00:34:54,320 --> 00:34:54,799
Speaker 2: What do they do?

654
00:34:54,840 --> 00:34:56,840
Speaker 20: They just were polyamorous living in a house together.

655
00:34:56,880 --> 00:34:59,239
Speaker 1: I'll live together in the same place in the Bahamas.

656
00:34:58,760 --> 00:35:03,280
Speaker 2: And then I'll just bang each other SBF, just thirty

657
00:35:03,280 --> 00:35:06,360
Speaker 2: two years old, was sentenced to twenty five years in

658
00:35:06,440 --> 00:35:10,560
Speaker 2: prison and ordered to pay eleven billion for its fraudulent schemes.

659
00:35:11,160 --> 00:35:14,160
Speaker 2: Sam Bankman freed with the darling of the crypto industry,

660
00:35:14,640 --> 00:35:17,839
Speaker 2: considered the man with the master plan for crypto, yet

661
00:35:17,880 --> 00:35:20,839
Speaker 2: his company joined the graveyard of crypto companies that fell

662
00:35:20,920 --> 00:35:24,160
Speaker 2: during the crypto winter. The turn of events started to

663
00:35:24,200 --> 00:35:26,960
Speaker 2: make people wonder where does crypto go from here.

664
00:35:28,719 --> 00:35:32,000
Speaker 1: The dilemma for the cryptocurrency industry is that after more

665
00:35:32,040 --> 00:35:35,279
Speaker 1: than a decade, no one has derived a commercial use

666
00:35:35,320 --> 00:35:38,640
Speaker 1: for crypto. It hasn't become a form of digital cash

667
00:35:38,680 --> 00:35:41,279
Speaker 1: to make purchases, and it's too volatile to be a

668
00:35:41,320 --> 00:35:46,239
Speaker 1: digital asset like gold and silver. Crypto technology, especially bitcoin

669
00:35:46,320 --> 00:35:49,319
Speaker 1: in the blockchain, was touted as being the technology that

670
00:35:49,320 --> 00:35:52,319
Speaker 1: would allow people to bypass the central bank. It was

671
00:35:52,360 --> 00:35:56,640
Speaker 1: initially promoted as internet cash used to buy and sell products,

672
00:35:59,320 --> 00:36:01,839
Speaker 1: but when experts in the field are asked when will

673
00:36:01,880 --> 00:36:04,840
Speaker 1: that happen? Has stubbornly remained the same.

674
00:36:05,320 --> 00:36:09,560
Speaker 11: Are we going to actually see more payment services carried out,

675
00:36:09,680 --> 00:36:15,279
Speaker 11: more customers, consumers using things like for example, Bitcoin re event, dogecoin,

676
00:36:15,320 --> 00:36:18,000
Speaker 11: if you're Tesla to actually make purchases. Is this the

677
00:36:18,080 --> 00:36:19,520
Speaker 11: year and where that actually happens?

678
00:36:19,840 --> 00:36:22,520
Speaker 9: Well, I think that We're going to have to just

679
00:36:22,560 --> 00:36:26,640
Speaker 9: see about And the reason I'd say that is I

680
00:36:26,719 --> 00:36:27,680
Speaker 9: think people want dollars.

681
00:36:28,000 --> 00:36:29,680
Speaker 4: I think they want to make payments and dollars.

682
00:36:30,080 --> 00:36:32,600
Speaker 9: Well, bitcoin's been around ten years, twelve.

683
00:36:32,440 --> 00:36:36,719
Speaker 1: Years, that's Peter Schiff, famed CEO and chief Global strategist

684
00:36:36,920 --> 00:36:41,320
Speaker 1: of Europacific Capital Incorporated. Peter is perhaps the world's leading

685
00:36:41,360 --> 00:36:44,800
Speaker 1: critic of bitcoin and thinks the cryptocurrency industry is the

686
00:36:44,800 --> 00:36:48,320
Speaker 1: biggest Ponzi scheme of his life. He argues that bitcoin

687
00:36:48,560 --> 00:36:51,760
Speaker 1: is no longer in its infancy and yet still hasn't

688
00:36:51,800 --> 00:36:53,080
Speaker 1: found a use case.

689
00:36:53,520 --> 00:36:56,799
Speaker 9: It's never evolved beyond a speculative token in the first

690
00:36:56,840 --> 00:36:59,320
Speaker 9: twelve years, so why shouldn't the next be any different?

691
00:36:59,600 --> 00:37:01,760
Speaker 1: Dirty Bubble media is skeptical as well.

692
00:37:02,000 --> 00:37:03,920
Speaker 12: Is there any use case for I don't know, I

693
00:37:03,960 --> 00:37:07,000
Speaker 12: haven't yet come across a project that seems to actually

694
00:37:07,000 --> 00:37:11,360
Speaker 12: be generating positive cash flow and generating something of economic value.

695
00:37:11,400 --> 00:37:14,600
Speaker 12: I haven't encountered that yet. So and the thing is,

696
00:37:14,600 --> 00:37:17,719
Speaker 12: if this technology was so useful, why isn't Google using

697
00:37:17,760 --> 00:37:21,080
Speaker 12: it right? Why isn't Amazon using it? Why isn't Facebook

698
00:37:21,160 --> 00:37:21,520
Speaker 12: using it?

699
00:37:21,640 --> 00:37:25,880
Speaker 1: There's a real split amongst cryptocurrency enthusiasts. Many believe the

700
00:37:25,960 --> 00:37:29,880
Speaker 1: other new tokens are just fraudulent, get rich quick schemes,

701
00:37:30,120 --> 00:37:33,560
Speaker 1: while Bitcoin is the real deal, the one digital currency

702
00:37:33,560 --> 00:37:36,480
Speaker 1: that can free citizens of the world from the disastrous

703
00:37:36,520 --> 00:37:39,600
Speaker 1: policies of central banks. And there is an argument that

704
00:37:39,600 --> 00:37:42,840
Speaker 1: Bitcoin is different than these other tokens. It does appear

705
00:37:42,880 --> 00:37:46,800
Speaker 1: that it launched organically, the public couldn't game that system.

706
00:37:46,920 --> 00:37:51,080
Speaker 1: It's also decentralized, no one controls it, and bitcoin is

707
00:37:51,080 --> 00:37:54,560
Speaker 1: by far the most adopted cryptocurrency of them all. Does

708
00:37:54,600 --> 00:37:56,879
Speaker 1: the fact that so many people believe in it give

709
00:37:56,920 --> 00:37:59,600
Speaker 1: it some kind of network effect? Or people use it

710
00:37:59,680 --> 00:38:02,680
Speaker 1: because so many people use it? I asked Stumberg if

711
00:38:02,680 --> 00:38:05,440
Speaker 1: there was any legitimate quality to bitcoin or was it

712
00:38:05,640 --> 00:38:07,360
Speaker 1: just a massive Ponzi scheme?

713
00:38:07,880 --> 00:38:08,760
Speaker 3: I would say both.

714
00:38:09,160 --> 00:38:12,520
Speaker 6: So to the first part of your comment, there is

715
00:38:12,680 --> 00:38:17,080
Speaker 6: undoubtedly a network effect for the creation of value, and

716
00:38:17,160 --> 00:38:19,759
Speaker 6: a quintessential example of that is gold. I mean, gold

717
00:38:19,920 --> 00:38:24,560
Speaker 6: is a inert metal that has some interesting chemical properties,

718
00:38:25,000 --> 00:38:29,160
Speaker 6: but collectively, over five thousand years, people have decided that

719
00:38:29,200 --> 00:38:32,359
Speaker 6: gold is a valuable asset worth owning. And since enough

720
00:38:32,400 --> 00:38:36,000
Speaker 6: people have decided that, and enough examples in history of

721
00:38:36,120 --> 00:38:40,239
Speaker 6: hyperinflating fiat currencies have proven that those who at the

722
00:38:40,360 --> 00:38:44,960
Speaker 6: early stages of a hyperinflationary environment were shrewd enough to

723
00:38:45,239 --> 00:38:46,759
Speaker 6: get their hands on as much gold as they could

724
00:38:46,800 --> 00:38:47,480
Speaker 6: did very well.

725
00:38:57,560 --> 00:39:00,400
Speaker 1: But in Dumberg's assessment, the jury was still out on

726
00:39:00,440 --> 00:39:03,440
Speaker 1: bitcoin reaching the status of a digital pressures medal.

727
00:39:03,600 --> 00:39:06,400
Speaker 6: The Bitcoin network the people who believe in it is

728
00:39:06,440 --> 00:39:08,880
Speaker 6: not nearly as big as gold, and it has not

729
00:39:09,280 --> 00:39:12,640
Speaker 6: had as enough validation events as a sort of store

730
00:39:12,640 --> 00:39:15,759
Speaker 6: of value as an emergent phenomenon as gold has had.

731
00:39:15,760 --> 00:39:17,920
Speaker 6: But it's possible. I could say, like, if you ask

732
00:39:18,040 --> 00:39:19,719
Speaker 6: me which of the cryptos I had to put a

733
00:39:19,719 --> 00:39:22,360
Speaker 6: certain amount of money in, I would select the Climb.

734
00:39:22,560 --> 00:39:25,719
Speaker 6: And again, mostly because of the regulatory clarity with which

735
00:39:26,000 --> 00:39:28,680
Speaker 6: a US citizen who wishes to remain within the bounds

736
00:39:28,680 --> 00:39:32,279
Speaker 6: of the laws can own transact and participate in the

737
00:39:32,280 --> 00:39:35,000
Speaker 6: bitcoin world. There is no central party that controls it

738
00:39:35,440 --> 00:39:37,880
Speaker 6: that that would be the one exception to sort of

739
00:39:37,920 --> 00:39:38,920
Speaker 6: the whole crypto universe.

740
00:39:39,080 --> 00:39:43,080
Speaker 1: Dooomberg believes that if any cryptocurrency survives the crypto crash

741
00:39:43,120 --> 00:39:46,399
Speaker 1: of twenty twenty two, it will likely be Bitcoin and

742
00:39:46,480 --> 00:39:48,360
Speaker 1: the technology built around it.

743
00:39:48,480 --> 00:39:50,560
Speaker 6: Much like when we had the dot com boom, where

744
00:39:50,680 --> 00:39:53,920
Speaker 6: basically all manner of startups rush to put dot com

745
00:39:53,920 --> 00:39:56,640
Speaker 6: and their name, and most of them are vs. And

746
00:39:56,680 --> 00:39:58,879
Speaker 6: then when the dot com bubble first, I mean, people

747
00:39:58,920 --> 00:40:01,000
Speaker 6: forget how violent that was and how many people lost

748
00:40:01,040 --> 00:40:03,839
Speaker 6: all of their life savings and their investments. And yet

749
00:40:03,960 --> 00:40:09,040
Speaker 6: from that rubble came Microsoft and Amazon, Apple and the

750
00:40:09,080 --> 00:40:13,360
Speaker 6: survivors of the catastrophe of the dot com bubble bursting.

751
00:40:14,719 --> 00:40:16,799
Speaker 6: It's seductive to imagine that we're about to see the

752
00:40:16,800 --> 00:40:18,719
Speaker 6: same thing, Like there's very interesting things going on in

753
00:40:18,760 --> 00:40:21,840
Speaker 6: the crypt universe. Not everybody tried to create a ponzi

754
00:40:21,880 --> 00:40:24,320
Speaker 6: token out of it. There will be technologies that survived

755
00:40:24,360 --> 00:40:27,120
Speaker 6: this crash. There will be entities that survived this crush,

756
00:40:27,160 --> 00:40:30,360
Speaker 6: Bitcoin among them. I mean a bigcointwor's going to keep running.

757
00:40:30,360 --> 00:40:34,680
Speaker 6: Whether a bitcoin costs you quote seventeen thousand US dollars

758
00:40:34,680 --> 00:40:37,160
Speaker 6: today or four hundred dollars a year from now. The

759
00:40:37,200 --> 00:40:39,040
Speaker 6: bitcoin network is going to keep running.

760
00:40:39,160 --> 00:40:42,000
Speaker 1: But Doomberg has a rather dark view of what will

761
00:40:42,000 --> 00:40:45,440
Speaker 1: happen with the blockchain technologies that survived this crash.

762
00:40:45,760 --> 00:40:51,600
Speaker 6: The technologies that survived this flush and are ultimately taken

763
00:40:51,600 --> 00:40:54,400
Speaker 6: over by the government to impose central bank digital currencies

764
00:40:54,400 --> 00:40:55,840
Speaker 6: on the world, which we think is a great plagu

765
00:40:55,920 --> 00:41:00,360
Speaker 6: on personal freedom. The owners of that technology will be

766
00:41:00,360 --> 00:41:01,400
Speaker 6: handsomely compensated.

767
00:41:01,640 --> 00:41:05,640
Speaker 1: Central bank digital currency are basically the government's version of bitcoin.

768
00:41:06,000 --> 00:41:08,879
Speaker 1: Think of it as a federal digital coin issued by

769
00:41:08,920 --> 00:41:10,200
Speaker 1: the Federal Reserve.

770
00:41:10,440 --> 00:41:13,160
Speaker 6: Central banking digital currencies. For those that aren't familiar, it's

771
00:41:13,280 --> 00:41:17,120
Speaker 6: essentially the elimination of physical cash and the elimination of

772
00:41:17,160 --> 00:41:20,759
Speaker 6: the Fourth Amendment. And the government can basically see and

773
00:41:20,880 --> 00:41:23,600
Speaker 6: control how you spend your money, and so they could

774
00:41:23,680 --> 00:41:27,480
Speaker 6: just decide that the only legally accepted currency the United

775
00:41:27,480 --> 00:41:30,399
Speaker 6: States is you know, FED coined, and you're not allowed

776
00:41:30,440 --> 00:41:32,480
Speaker 6: to buy guns with a FED coin, for example. Are

777
00:41:32,719 --> 00:41:34,960
Speaker 6: you're only allowed to buy so many gawns of gasoline

778
00:41:34,960 --> 00:41:37,000
Speaker 6: in a week because your carbon footprint has been exceeded,

779
00:41:37,320 --> 00:41:39,040
Speaker 6: or you can only buy so many baggs of chips

780
00:41:39,080 --> 00:41:42,799
Speaker 6: and sodas with sugar in them, because you know, buy

781
00:41:42,840 --> 00:41:45,400
Speaker 6: and large. Healthcare has become nationalized, and you're being an

782
00:41:45,440 --> 00:41:48,279
Speaker 6: undue burden to society by living in the way that

783
00:41:48,320 --> 00:41:50,440
Speaker 6: you could do. And so it's a very very small

784
00:41:50,440 --> 00:41:52,799
Speaker 6: step from a central panking digital currency to what we

785
00:41:52,840 --> 00:41:54,520
Speaker 6: have called in a piece we wrote last year called

786
00:41:54,560 --> 00:41:57,920
Speaker 6: Dystopia coin, where you cannot hide from the you know,

787
00:41:57,960 --> 00:42:01,200
Speaker 6: the eye of Soren, and the government shall see everything

788
00:42:01,200 --> 00:42:03,879
Speaker 6: that you do. There's no tipping with cash, know, giving

789
00:42:03,880 --> 00:42:05,640
Speaker 6: a few hundred dollars to a friend that you don't

790
00:42:05,719 --> 00:42:08,880
Speaker 6: report to the irs. All the way in which most

791
00:42:08,880 --> 00:42:13,800
Speaker 6: Americans express their freedom will be removed in such regard

792
00:42:13,880 --> 00:42:16,880
Speaker 6: and our fear in our base case and ultimately, you know,

793
00:42:16,920 --> 00:42:20,400
Speaker 6: our objectives to trying to analyze the situation unemotionally is

794
00:42:20,440 --> 00:42:22,880
Speaker 6: that the technologies that prove to be useful in the

795
00:42:22,880 --> 00:42:26,600
Speaker 6: crypto cycle that we've just gone through will be hijacked

796
00:42:26,640 --> 00:42:28,799
Speaker 6: and leveraged by central bankers around the world and they're

797
00:42:28,800 --> 00:42:31,200
Speaker 6: never rinning thirst for more control over the populace. And

798
00:42:31,520 --> 00:42:35,840
Speaker 6: that's coming. But the technology is developed in the cycle

799
00:42:35,840 --> 00:42:39,000
Speaker 6: agreed that we've gone through will undoubtedly be sifted through

800
00:42:39,000 --> 00:42:41,760
Speaker 6: and hijacked by the world central bankers and their desire

801
00:42:41,760 --> 00:42:44,840
Speaker 6: to eliminate cash and by extension, to eliminate privacy and

802
00:42:44,880 --> 00:42:48,280
Speaker 6: by extension, to eliminate private property ownership, which is, by extension,

803
00:42:48,320 --> 00:42:51,920
Speaker 6: the elimination of freedom, and of that we are significantly concerned.

804
00:42:52,160 --> 00:42:56,440
Speaker 1: Ben Armstrong agrees that central banking digital currencies or CBDCs

805
00:42:56,719 --> 00:42:57,200
Speaker 1: are coming.

806
00:42:57,320 --> 00:42:59,759
Speaker 9: Yeah, it's inevitable. There's no doubt about it's inevitable. It

807
00:42:59,760 --> 00:43:06,480
Speaker 9: can be stopped. Digital dollars already out, guys. It's called USDC.

808
00:43:07,080 --> 00:43:09,440
Speaker 9: Circle is behind it, Coinbase is behind it.

809
00:43:09,760 --> 00:43:12,200
Speaker 1: Jerome Palak, the chairman of the Federal Reserve.

810
00:43:11,960 --> 00:43:14,480
Speaker 9: Back in twenty twenty, said, we're open to the private

811
00:43:14,520 --> 00:43:18,280
Speaker 9: sector helping us to create the digital dollar. It's already

812
00:43:18,280 --> 00:43:20,880
Speaker 9: been created. They're already working as well with the European

813
00:43:20,960 --> 00:43:23,200
Speaker 9: Union on creating the digital euro. I believe we're three

814
00:43:23,200 --> 00:43:25,880
Speaker 9: to four years away from digital dollar coming out, and

815
00:43:26,320 --> 00:43:28,359
Speaker 9: I think there's no there's no way to find it,

816
00:43:28,719 --> 00:43:30,520
Speaker 9: to be honest with you, one thing we want to

817
00:43:30,520 --> 00:43:32,880
Speaker 9: turn our attention to very soon is we want to

818
00:43:32,960 --> 00:43:37,200
Speaker 9: outlaw the use of a social credit score in combination

819
00:43:37,600 --> 00:43:40,880
Speaker 9: with your money, in combination with a digital dollar. So

820
00:43:41,080 --> 00:43:43,200
Speaker 9: what we really need to do is figure out ways

821
00:43:43,640 --> 00:43:46,719
Speaker 9: to make that digital dollar safer and to protect ourselves

822
00:43:46,760 --> 00:43:50,280
Speaker 9: in the future from great reset from the elites, from

823
00:43:50,400 --> 00:43:52,440
Speaker 9: you know, whatever you want to call them, the overlords,

824
00:43:52,480 --> 00:43:54,120
Speaker 9: whatever you want to call them. You know, we want

825
00:43:54,160 --> 00:43:57,040
Speaker 9: to do our best to protect those through legislation and

826
00:43:57,160 --> 00:43:58,680
Speaker 9: just accept the fact that it's coming.

827
00:43:59,000 --> 00:44:02,600
Speaker 1: Doomberg agrees that the American public needs to protect itself

828
00:44:02,640 --> 00:44:05,240
Speaker 1: from the inevitable adoption of a digital dollar.

829
00:44:05,480 --> 00:44:08,560
Speaker 6: We in the West, who grew up with in cherishire

830
00:44:08,600 --> 00:44:12,640
Speaker 6: privacy in our freedom, desperately need a modernized version of

831
00:44:12,640 --> 00:44:14,560
Speaker 6: the Bill of Rights, and I would say a digital

832
00:44:14,600 --> 00:44:18,399
Speaker 6: Bill of rights. I think that there still exists within

833
00:44:18,440 --> 00:44:22,959
Speaker 6: the Western world a thread of freedom loving citizens who

834
00:44:23,320 --> 00:44:26,879
Speaker 6: have an appropriate lack of trust in centralized authority, and

835
00:44:27,120 --> 00:44:30,920
Speaker 6: pushed hard enough, will demand a new digital Bill of rights.

836
00:44:31,239 --> 00:44:34,160
Speaker 6: Donald Trump can't freeze my bank accounts without some due process,

837
00:44:34,560 --> 00:44:37,240
Speaker 6: or Joe Biden can't freeze my bank accounts without due process.

838
00:44:37,280 --> 00:44:39,960
Speaker 6: And for a politician to be able to inspect my

839
00:44:40,040 --> 00:44:45,279
Speaker 6: transactions without any suspicion of wrongdoing should be illegal, and

840
00:44:45,320 --> 00:44:49,520
Speaker 6: we should codify this. And perhaps the fear of totally

841
00:44:49,560 --> 00:44:52,960
Speaker 6: losing your rights and freedoms might provoke an appropriate political

842
00:44:53,000 --> 00:44:55,640
Speaker 6: response that leads us to a place where we can

843
00:44:55,760 --> 00:44:58,640
Speaker 6: incorporate the benefits of these technologies.

844
00:45:05,200 --> 00:45:12,560
Speaker 1: Which leads us back to the question where is crypto going?

845
00:45:13,280 --> 00:45:16,799
Speaker 1: It appears that the crypto world is developing technologies that

846
00:45:16,880 --> 00:45:19,400
Speaker 1: could one day lead to the end of the paper

847
00:45:19,440 --> 00:45:23,280
Speaker 1: dollar and the establishment of a central banking digital currency,

848
00:45:23,760 --> 00:45:27,360
Speaker 1: and this could be an extraordinary challenge to American freedom.

849
00:45:28,000 --> 00:45:30,600
Speaker 1: When we started our inquiry into the world of crypto

850
00:45:30,640 --> 00:45:34,360
Speaker 1: in twenty nineteen, we asked the question is bitcoin dangerous

851
00:45:34,400 --> 00:45:37,640
Speaker 1: to America? What sparked our interest in that subject was

852
00:45:37,680 --> 00:45:40,800
Speaker 1: a statement earlier that year by then President.

853
00:45:40,360 --> 00:45:43,360
Speaker 17: Trump, a crypto is being talked about. The President actually

854
00:45:43,400 --> 00:45:46,200
Speaker 17: weighed in and tweeted about cryptocurrencies last night. He wrote,

855
00:45:46,200 --> 00:45:48,680
Speaker 17: in part this, I'm not a fan of bitcoin and

856
00:45:48,760 --> 00:45:51,759
Speaker 17: other cryptocurrencies, which are not money and whose value is

857
00:45:51,840 --> 00:45:55,880
Speaker 17: highly volatile based on thin air. He writes, unregulated crypto

858
00:45:55,920 --> 00:45:59,680
Speaker 17: assets can facilitate unlawful behavior, including drug trade and other

859
00:45:59,719 --> 00:46:00,680
Speaker 17: illegal activity.

860
00:46:00,719 --> 00:46:04,200
Speaker 1: Rights the president to make this argument, Trump administration and

861
00:46:04,280 --> 00:46:08,880
Speaker 1: other politicians claimed that cryptocurrencies were completely anonymous and therefore

862
00:46:09,000 --> 00:46:13,040
Speaker 1: would facilitate massive illegal activity. But when we dug into

863
00:46:13,080 --> 00:46:16,480
Speaker 1: this claim, we found the argument was flawed. It was

864
00:46:16,600 --> 00:46:21,480
Speaker 1: actually the technology underpinning bitcoin, the blockchain, that allowed criminals

865
00:46:21,520 --> 00:46:25,080
Speaker 1: to be tracked down. So we concluded that bitcoin was

866
00:46:25,120 --> 00:46:29,000
Speaker 1: not necessarily something Americans should fear. But did we get

867
00:46:29,040 --> 00:46:31,560
Speaker 1: it wrong? Well, I think it's fair to say that

868
00:46:31,640 --> 00:46:33,239
Speaker 1: Donald Trump thinks he got it wrong.

869
00:46:33,440 --> 00:46:37,120
Speaker 12: The crypto collapse does not appeared to be worrying one

870
00:46:37,239 --> 00:46:38,680
Speaker 12: major celebrity.

871
00:46:38,200 --> 00:46:41,160
Speaker 14: Former US President Donald Trump, has officially entered the cryptosphere.

872
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Speaker 1: Trump used a cryptocurrency to launch a digital trading card. Ultimately,

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Speaker 1: technology like bitcoin is just a tool, like Twitter, or

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Speaker 1: Facebook or a gun. What makes any tool dangerous is

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Speaker 1: the user operating it. Paper cash is used by lemonade

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Speaker 1: stand operators and the Mexican cartel. If the experts are right,

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Speaker 1: an a central bank digital currency is inevitable that Americans

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Speaker 1: need to demand a digital bill of rights, one that

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Speaker 1: prohibits a tyrannical government from using a cryptocurrency to dictate

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Speaker 1: our behavior. And for those of you that think a

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Speaker 1: federal crypto dollar is a thing in the far off future.

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Speaker 1: Perhaps you should reconsider your timeline.

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Speaker 18: So you might have missed what happened Wednesday afternoon at

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Speaker 18: the FED. They started their central bank digital currency, so

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Speaker 18: they rolled it out and it's in its beta test now.

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Speaker 2: Red Pilled America is an iHeartRadio original podcast. It's owned

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Speaker 2: and produced by Patrick Carrelci and me Adriana Cortez of

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