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HubSpot.com. Yeah, yeah, it's is bad. I mean, it's very, very visible. Very, very painful, very like, all day. I mean, just the the gall of people, I mean, for what it is, that's like a crazy crazy thing to do. I feel like I could rule the world? I know, I could be what I want to put my all in it. Like
Old less travel never looking back. Alright, we are live, Sean. This is all. I've been wanting to talk about. I purposely haven't texted you about this because this is all I want to talk about, but like maybe just give like a three to five minute background on what's going on. I think you're the guy that should be doing that and then I want to tell you some of the more interesting points that I think maybe haven't been covered, or are less covered that. I think are either hilarious or
interesting. Okay, great. And by the way, should we check
I have a 25 thousand dollar withdrawal that's that we will see it. Will see if F 2x has any money left I'm going to check right now and see if it's come through. What do you think? Yes or no. Do I get my 25 grand
out? I think he, I think he probably got
it. I did it on November 9th. It's now November 14th. It said it would happen by today and it is not in the bank account. Alright, there we go. Just another disappointment. Okay, so why don't I have my deposit actually, not even a deposit, they advertise with us. And so they paid me
Inside objects and I was just lazy. Never withdrew it. Okay, so basically what's happened, here's the what happened for those who aren't following it that closely ft x which is a big crypto exchange. It's a place you go to buy sell different cryptocurrencies. It was I think the number two or three largest Exchange in the world use mostly internationally because people all around the world want to buy think 90 plus percent of people buying crypto are international and so fgx was
huge basically.
The coin based, put bigger than
coinbase bigger than coinbase by Nan. Says number one, I think there's technically something number two. But really, it's like Finance number 1, f 2 x 2, and sort of like, coinbase of the others, you know, come after that. Okay. So F CX, which was this blue-chip thing and it was seen as this like, you know, Mega success story, you would see top investors in the world that we're investing in this so Sequoia, which is like, you know, preeminent VC, firm plus like, you know, 50 others, we're investing in this. He's on the cover of
Fortune Magazine. And it says, you know, the next JPMorgan because he's, you know, this this this young guy who becomes one of the wealthiest men in crypto. They say FTX at its peak was worth about thirty two billion dollars and this is companies only like four years old, right? So it was had to sound crazy explosive growth. And valuation, Sam was said, to be worth 16 billion dollars himself. He's this genius traitor. And now entrepreneur, he's this crazy eccentric.
Trick guy. The guy looks goofy as hell. He's a vegan who doesn't wear shoes and gives away all of his money. If they're effective, altruism, whatever, you know, he's got this sort of character that everybody wants to talk
about of which I bought into it very easy to buy into, you know, this like you crazy person who sleeps on the floor of his desk and doesn't even like the bean bag believe in normal stuff and he's at 29 or 30 worth north of 10 billion dollars and he previously made a billion plus by doing Arbitrage with, like Korean crypto. So just some crazy.
Shit. I bought into
it. So that's the background. We all go on this train of like, okay, I guess that's what it is. And then suddenly last week, There's a series of events we can go into however, much detail you want. But this is serious events that basically causes a bank run on ft x 0 users lose confidence that FTX is solvent, which means they say, I got to get my money off 50 x. Just as I did you go you hit the withdraw button. Just in case there's any weird stuff going on. We've seen many things crashed in 2022 and crypto Lou.
Anna was one, Voyager Celsius. There was a handful of these things that crashed. So people said better safe than sorry. Let's start withdrawing our money that creates the liquidity Crisis, 4 FDX, they don't have the money to give and everyone's like, where the hell's the money? Why don't you have the money? That's my deposit. That's my funds. You know, you go to the bank, you expect them to have your money. And so, F tax does not have their money. He comes out. He says, everything is fine. All the assets are fine, guys. This is just, you know, a hoax from a competitor. There's a competitor trying to F with
Us blah, blah, blah, finances, that competitor that he's talking about. And so he basically saying all the big, the big, the number one guys coming after us, but we're fine guys. Don't don't panic. People still panic. And in fact, he was lying turns out. There's basically this guy was a giant fraud. I, you know, if you believe all the things have been coming out, so allegedly will say the word allegedly. This guy was lying, deceiving, everybody misusing, customer funds, etc, etc. Ft x goes under it. Goes from a 20 to 30 billion dollar company to a company. That is now
Now declaring bankruptcy, billions of dollars, there's like a 10 billion that there's like, 10 billion dollars worth of customer funds that are gone, vaporize unaccounted for this guy's flee in the country and you know, all kinds of crazy stuff so that I'll just set that as the background. Now we can go into whatever part you want to go into.
All right, so there's been a lot of interesting things that have happened and I want to name a few, you know, there's this story's a week old now. So a lot of the the stuff has been covered on the facts. We can talk about the facts if we want but I want to talk about like some things that I think
We've been covered first, the things happening on Twitter are amazing. This is all unraveling in real time on Twitter, one of the more interesting and funny ones, there's a Twitter handle called autism Capital. The most based settle citizen journalism in crypto. We are currently following the FTS Saga, but please be patient. We have autism, that's their, that's their, that's
our source of Truth. By the way, that's the fat is Who We Are.
Are you doing on it times of trouble right now? But
listen, it's hilarious and I think it a lot of it's right. It's sort of like TMZ TMZ is like considered trash because they sit there fast paced and they say a lot of stuff that eventually everyone small, they have to recant and say, oh no, you know, we got this wrong but you know what they fucking nail it, they called Prince being dead or about to die. They call all this other stuff and that is exactly what's happening. There's so there's all these interesting things that autism capital is tweeting like SBF. That's this guy Sam.
Founder s. BF did a master class, you know, the company master class on trading and it was set to release in December and it's already been filmed. That's like an interesting thing. But tweeted another interesting thing, they tweeted is basically spfs. Right-hand woman was this woman named Caroline. Who rumors are that? They also were like, sleeping together, she ran the hedge fund, so that SPF owns all this weird collusion. She has a Tumblr that autism Capital found and it says she had a post called the world optimization where her Kink is men.
Who control? Most major, world governments.
Ya know what it is, exactly. It's like people say, always say, oh I want this but what I want is like a man who's, like, control societies, government's things like that. It's like, what the hell are you talking about? Yeah, dude. So I followed them. Like we, I mean, if you're in crypto, you follow these people. You know, these are Sam was considered one of the like you no more Blue Chip, of course, there's always some people that are like this guy's full of shit. Or I don't trust this guy or whatever, but they're like the, the smallest
Small
minority. The majority of people believed that FTX was this fast-growing company. And that Sam was this like, really interesting, really smart founder. And then you knew the the one part that was always Shady. So for example, when they advertise with us, they asked us to write a story on ft x. And we're like, okay, great. We'll write the story about how you guys grew so fast. What tactics you used? Why why aggressive? As I read the story and then I mean Ben we're talking. We were like, you know, stories all like, you know, perfectly
Rosie. And that makes sense. This is like a sponsor. Like, you know, deep dive. Basically. But like, yo, we should put in. What are some of the concerns even if nothing else just to, like, balance out the story? So that it's like, not literally just a Fluff piece. So, we were like, well what are some of the criticisms and one was like their. Well, before he started FDX, he started this company called Alameda research and I'll let me do research not a research company, it was a trading company that is called it research. So sad a little more serious,
but basically and the rumors are like an Autism.
I think also shared this, they're like, well, Sam said he wanted to call it Alameda research because that just had an official sounding name and he's also didn't want people to know that they were trading.
Yeah. In in the entrepreneur circles, it was like, AA, great little growth hack. Right? You know, it's like when we wanted to get advertisers for the hustle, I would first just write a fake ad for some other company that I'd go to their competitor. Be like a your you want this spot and like, you know, there's a fake it till you make it that's acceptable. And then there's a fake it till you're a fraud, which is where this guy like went totally wrong. So so he had this Trading Company.
Did the legend is basically that at the time Bitcoin was trading at let's say 10 grand in America. But in other countries, where was harder to access Bitcoin? There was a slight premium, people are willing to pay more for a Bitcoin because it was so hard to access because the government was, you know, maybe not allowing exchanges to run their properly or whatever. So, in Japan and Korea, everybody saw this Bitcoin would be 10,000. Here would be 11,000 or 12,000 there. And so, did the legend of the origin story for FTX is that Sam saw this? He was
One of the people that exploited this Arbitrage opportunity, you know, he basically hustled went to Korea and set up this like Logistics chain where they could buy a million dollars of Bitcoin here. Sell it first like premium there, why are the money back and do it again? The next day, just keep recycling the money and that they made tons of money and nobody really understood exactly how like there was some plot holes in this, but it was like, I don't know, I guess these guys are just smarter than us but like it's like what you made a billion dollars doing this. Now that sounds a little unreasonable. So you might have made.
Words of millions. But where did you get the seed? Capital for this, like you weren't Rich. So, like, how much initial money went into this. And there was never like some clarity there, so that was a little bit strange but nobody really
cut. What's the answer to
that they? Well, now it appears, they answer might have been that that just never even happened. That might have been a complete fabrication or they might have done it at a much smaller scale. Nobody, nobody still knows the answer because it's guys like, you know, on the run or, you know, hiding, you know right now. So so nobody knows the answer that. But the bigger part, the part that we wrote about
Well Alameda research when FTX launched as an exchange, every exchange needs liquidity. When buyers and sellers come to the site, they need to be able to quickly get their order filled. So you usually have a market maker or liquidity provider basically, who sits there and says I'll be the one who buys and sells things and I'll take a small fee for providing that liquidity to The Exchange so it runs better. So Alameda was the liquidity Fighters, the market maker for ft x and so everybody knew that and it's like okay cool. But it's like wait, what's a moans both? He owns The Exchange Andy.
He owns the market maker, isn't there? Some conflict of interest so you know like couldn't you know if this is a hedge fund. Basically that can go buy things but then FTX can list those coins. They'll know what they're going to list, right? So there's a little bit of a weird. There's it's a conflict of interest. It's a little bit of, you know, cousins kissing there. And so we had wrote about that, we go, you know, they have this cussing kissing cousins thing that people don't really like or nobody knows the true extent to this relationship between the two and they were like, hey, we need to take that out. And we were like, well, we don't really think we should take it out. We think we're
Keep it in and they were like, okay, cool, like, but just pause this whole story, The crypto market prices are going down. We don't want to be bragging about how well we're doing right now. So we were like, okay, you paid us, you don't want us to run, the story will never run the story so we've never ran it. But I remember at that time a little this small red flag of like I'm surprised that instead of clarifying the relationship. They're like, don't talk about that anyway those a little bit of a red flag but you know like most things when you have, when you're reading nine out of ten, things are just saying how this is the Wonder
Her kid and this is the best company and then you just have this one little red flag, you sort of brush it aside, at least that's what I did. This is a mistake, anyways, that was just like one small thing and so what ended up happening whether the sort of cause of this was essentially that FTX was, it was lying to customers and was illegally taking customer money, giving it to Alameda through either alone or just look straight up, funneling the money there, and then Alameda was going in trading using customer money, trying to turn a profit and was actually just like, kind of bad at trading. It was losing money.
And so then they didn't have the money to return when all the customers wanted their money out and when they, you know, quote unquote, lent them, the money, the collateral that they put up to take the loan, right? Like let's say users put in more like solid currency. Let's say like Bitcoin Alameda borrows that Bitcoin to go trade and they put up in return as collateral ftt token, which is FTX its own internal token that doesn't have like real, that much real value. So when they lost all the Bitcoin,
Like to make things simple here, when they lost all the Bitcoin, all FDX had was this shitty ftt token that wasn't what I was worthless. So now there's no, there's a huge hole they lent, basically 10 billion dollars out and then couldn't return it. And so they went, they went under, and basically, now every day there's more leaks about how crazy this situation. Was, how these guys were Liars, how they were doing this intentionally? How they were doing drugs, how they were, you know, 15 people sleeping together in this like Mega Mansion. While he pretended to be this like big philanthropist.
And maybe he's an actor for the Chinese State, who know there's like crazy, theories all around and nobody knows the truth. And this guys coming out and yesterday he tweets for the first time and everyone's like, oh my God, here it comes. He tweets out like a thread and you know, like you start a thread with one and then used to say the first point then you're gonna say to and then the second point he treats that one and all he says is what and then he sees it and he does nothing and he's reached out to and then the letter
H
What does that mean?
And then just now an hour ago he tweeted out a and then 11 minutes ago p--
and he's maybe spelling he's
like what happened. I don't know what he's trying to do. I don't know what's going
on. I don't know. Maybe he's having a break or something like I mean dude I knew a guy who like was having a breakdown and you know, he had to be institutionalized and he was tweeting crazy shit, you know. Like and this is how it started. Maybe the guys going through something like that. There's this, there's another interesting thing that happened with the chamath on the All In
God he's in this is another thing that I saw I think also autism Capital, they like clip this clip and on the all in pachamama who has a whole bunch of other questionable things happening, but he said something interesting where he was looking at investing in ft x and he was like, you know, it's kind of weird how you guys are kind of self-dealing, I think you need a board. And I think you need rules around what you can and cannot do with this. And he said, the person working at FTX call them back and literally said, hey, go fuck yourself. And I just hung up and that was the
End of the call our time. On today's episode is brought to you by imperfect action hosted by step Taylor. It's a podcast on HUB, spots podcast, Network the audio destination for business professionals. Imperfect action is a bite-sized online marketing podcast for business owner. So join Seth Taylor, she answers all your business marketing questions that deep dives into the nitty-gritty of online, marketing content marketing, social media, marketing, and marketing, for strategy. For business owners, a few recent episodes, include some of the biggest mistakes you can make with
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podcast. Yeah. By the way, I think there's 70% chance that entire story is bullshit. I think some authors generally full of shit and, you know, so I do not believe this story for what it's
worth. But dude, have you seen the videos? So, the woman named
I guess my point would be if you knew that something after I was going,
With this company, the most popular company and the world of that time and crypto and that you if you knew that this was messed up like that, there was fraud going on or deception of any of this stuff, you would have said something right. Like so maybe what he said is, I don't know. I don't feel comfortable with this, but I feel like he's trying to take some Victory lap of being like
no video in the clip. I believe. Jamaat said, he, I believe he put emphasis on this. He goes, he literally said go fuck yourself.
No, no, that part I believe, I believe that they would say that
It's Tomas part where he goes. I called them, they pitched me. I sent this doesn't make much sense. But okay, I'll have my guys look into it and my guys looked into it. We gave them a recommendation. You need governments, you need to do this, you do that, you know, and like they said, go fuck yourself. I don't know something about that picture being so white nighty. It original red flags to be as well
but a few other interesting things. Basically, another Twitter thing, these guys have been doing these like Marathon Twitter spaces. One of the guys name is Mario and he hosted this Twitter space where Ilan Pub popped in and
I was like, Hey, Ilan, what did you think? When you first met this guy SPF? He goes well, people were telling me when I was buying Twitter that he had lots of monies, a lots of money. But my bullshit meter was redlining and even all these major investment Banks were like. Yeah, this guy's walking on water. He's the best. He's got, he has money and I just didn't think that he had the money and I actually believe this story to be true and it just like it was interesting because from an outside, you think? Well, these billionaires all know each other. They know what's up and you know like they know if someone does or doesn't have
Anything else does they do? Or do not know if someone's legit and elon's? Like I had no idea if he was legit, but he didn't seem legit to me, but everyone else said he was, and I thought that was like, really interesting. I was like, Oh, I thought this was like, a club where you had to, like, show, financials to get in inside of, and turns out that's not true. And also the balls of SPF to be buying stadiums, to be hiring Tom. Brady, and all these other like, you know, Larry David, these huge celebrities. This guy took this guy took a scam to the next level you know so much hubris to be
Or dming Ilana being like, hey, I'm down to put up three billion for buying Twitter. It's
crazy. So, did you see the text messages? That leaked of
that? Yeah. And what a deal on say he goes, oh, just getting really hungry.
So basically the text wasn't leaked. It's on this awesome Twitter handle called internal Tech email so you can go check it out there. It's Michael Grime. So, I think is like the head of, it's like a bank. Right things. Yeah, yeah. I think he's like one of the top guys at Morgan Stanley. So he texts. Ilana goes, hey, do you five minutes for meeting that? I think you'll want to take.
And he loves like I'll call you in half an hour. Mike runs perfect, he goes Sam Bhangra. Freed is why I'm calling any links to a link of him Bakery, which is basically a link to a story that like sandbag Madrid is he was an effective altruists, meaning. His goal was to make as much money as possible, so that he could give it away, that was the best way that he could help. And cause, like, positive change for society was by maximizing, how much money you can make, and then giving it away, which is like, why there's all the memes of like you did it. You took all our money and you gave it away like it.
Wow. And so then Ilan, just response to question marks. Like what and he goes, I'm backlog with a mountain of critical work matters. Is this urgent? He goes, he wants one to five billion serious about partnering with you, same security. You own not urgent unless you wanted him to fly out tomorrow he goes, he could do five billion. If everything is Vision lock, he would do engineering for the social media Block Chain integration found it. He founded FTX, he believes in your mission major Democratic donor. He was the number two largest Democratic donors. 40 50,
Millions of like that he goes. So I thought it was worth an hour tomorrow. He said, he could shake hands on 55 billion if you like him and I think you will, can you talk with a tie whatever? But it, you know, it could get us five billion in equity in an hour. He's like, trying to sell it, like, take this meeting, Ilan replies blockchain, Twitter isn't possible as the bandwidth and latency requirements, Kappa blah, you know, basically a blockchain Twitter won't work. So this doesn't make any sense and then it may be says Ilan. Disliked could do five billion if vision loss.
What do you say, engineering, for social media Block Chain integration and then the Mexico's, got it. I'll forward the equity interest to this other guy instead, but even if there's not the blockchain piece, he's interested in investing and Twitter and your mission. But we can we can put on the sidelines for now he like goes as long as I don't have to have a laborious blockchain debate. This is honestly, one of the cooler things that you lied has done or said in this entire thing, which is like. All right, I'll meet the code crypto, bro. Just don't make me fucking. I don't want to get into an hour-long. Talk about blockchain.
And please. And that I thought was hilarious. So then, then he goes, the Sam. Actually have three billion liquid. And then the guy goes out. Yes. I think Sam hasn't. He actually set up to 10 at one point, but in writing, he said up to five, he's into you and he said the blockchain is only if you're interested in not get a push, it blah, blah blah. This other super rich guy Orlando referred him and then he's like we can push him to next week. But I believe you'll like him, Ultra genius, and doer Builder, like your formula bill.
F DX from scratch after MIT physics second to Bloomberg and donations to Biden campaign. And so that is you know, the the
Grimes. What's this guy's name my
crimes? Dude, he's on the ground. You're right now, your your fire, bro. You are fired. We're calling him our crimes, instead of Mike, whatever reason we did this in the milk road, we were like, you know, it's just, it's hard to report bad news every day, but it's like, hey, bad news. F 2x the biggest change in solvent. Bad news, wasn't even just a miscalculation.
In, you know, in good faith. It was actually fraud and deception. We think and that's what it looks like. Oh, bad news. The money that they would have otherwise had to pay out the remaining. Customer deposits. Oh, somebody just hacked it. Last night. Took sick, the last 600 million. There's actually a zero in the bank accounts now. So there is nothing left for anybody because a guy literally just did this. And oh, by the way, there's a plane going flying, his private jet is flying to Argentina tonight. We're tracking it here and it's like, dude, this is horrible. And we're like, what are we going to do? We're
No longer calling. This guy is BF nicknames are for winners. This guy is now Samuel. We're calling them as government name and my mr. Venkman, not even know not, he's Samuel from now on.
We, I want to ask you about milk roads engagement, But first you tweeted something and I agree with basically you're talking about like a it just like I lose trust in so many things, I'm losing. So SPF are not as p.f. TX owned, I think 10% of Robin Hood, which I have money in. Not a huge sum of
money. I think he personally,
I am in Alameda owned the new center something. I'm
gonna sell, I'm gonna, I'm getting all my money out of Robin Hood it. This is, I don't trust anything. I don't try any new startup. That is in banking. I by default don't believe you. Whereas, before I would be like, oh, this is kind of cool. I guess, like, you have MasterCards logo on there? I guess you're, okay, yeah, no, fuck that. I'm going to eat raids. I'm getting my money off of Robin Hood. I tell all the people who I said, oh, you don't, you know, you just don't get the
There's I'm sorry you are right. I was wrong. I'm sorry Daddy you are you are absolutely right. I do not I think I trust coinbase for some reason because the guy Brian seems a little bit legitimate and they are publicly traded to they do report quarterly I
guess gotta trust somebody right. Like you gotta trust something. So for example I was like dude I'm getting all my crypto off Robin Hood At the minimum because I had way back I bought crypto on Robin Hood and this is like, wait, I can't just send it to another wallet. It's like no because Robin Hood actually wasn't buying crypto. You're buying a crypto derivative? I was like, what the fuck?
Fuck. Why do they say buy Bitcoin? Like this is not Bitcoin. This is a Bitcoin tracking derivative is not even you don't own the coins. Then it was like, okay. Now you could after years there's like you could transfer it off. So I was like, okay, I'll get to that when I get to it and I bought a bunch of teeth on there and I was like, I was like you too. I'm getting it all out of there. I go hit, send it to eith wallet. It's like, oh you've exceeded your five thousand dollar maximums, a five thousand dollar Max, every day, you can only do five thousand first of all, why? Second of all that's bullshit.
It will take forever to get all my money off this thing. It's just like yet another you know yet another strike against, you know Innovation I'm the old guy on the lawn now shaking my fist saying you know all you Rascals you know stop playing with my money. It's like and it's not like it's that crypto isn't like Bitcoin did anything. It's like the people building the companies around this that are literally like committing fraud or taking so much Reckless risk that there is that there are whole exchange goes insolvent overnight or gets hacked. That's insane.
So I was like, you know what, I'm gonna self custody or I mean, take this portion, move it over here, do this over here, you know, I have this kind of strategy was like I'm gonna move more into self custody and our buddy. Greg was like, I was like what do you think man? Should I should I do this? And he's like, well, I always like when I said, what would feel worse if I just lose my crypto or if these guys lose my crypto and he's like, well let me ask you a different question, how many are pods do you own any like how many your pods if you lost? He's like if you can't keep your air pods you really think for 10 years your
Look at that, loser Krypton. I was like, Fair Point. It sounds like, you know, okay, for cycling through options of how to hold this stuff so that way I don't lose it. But be, you know, I'm not trusting anybody. Luckily, I wasn't really that affected by FTX, but, like, you know, a lot of people were and that's extremely, you know, sad a disappointing and like those people are, you know, they're traumatized, right. That's like they got daddy issues. Now, they got trust issues. They're, they're not coming back to the game and just being like, yeah, I understand even if you intellectually understand that,
okay, this guy was literally a criminal, right? Our like, you know, somebody who was, you know, doing something that was at, that was wrong misappropriating, user funds. Even if you acknowledge that, that was one bad actor. So, I do, there's a lot of Bad actors in crypto. And how the hell am I supposed to know? It's not like, you get to go sit and audit the books of these companies. It's not like you get they say, they say one thing. They do another like 24 hours before I went in solvent. The CEO comes out and says all assets are fine. We do not lend out customer deposits. 24 hours, later gone. And
Now this guy was lying.
Well dude, an interesting thing about San Francisco, and Silicon Valley, where we both kind of started. Our careers is, it's all based on trust. So, there's like a lot of times where you give people money, you just wire them money without contracts. You you pump people up and make intros even though you don't entirely
know to slide deck and you say, okay, this is what they're saying. The numbers are you don't say okay, I need your, you know, I need to go into your database and I need to go check to see this. Oh, I need to check like I need to check that this database numbers also not fudged by
You know, Bots or your fake downloads or whatever. Oh, I also need to check that your pixels. Not firing and twice or you're not like hiding costs over here with your shell companies. You don't know, all that stuff and it's all mental this time to do that.
This whole thing, Our Little World is based on this type of trust and you and I have both kind of got started, right? When a great economy was was taken off and I basically didn't ever think people were lying and that was incredibly naive. And now
I feel even though I haven't really been burnt by this but I do feel, I'm like, oh I don't I don't really trust anyone anymore and I think that everyone might be lying just a little bit and it has changed my perspective on that 100%. And so I used to see Robin Hood as like, oh, you're the underdog. Like, you know, you're on my side. It's like, oh no, your you definitely can lose my money. I don't, I don't, I don't believe you. What about milk wrote? So for the new listeners milk, Sean started. This thing called milk Road. It's a daily email for crypto with hundreds of thousands of people is your engagement.
A judgment skyrocketing or people just telling you to fuck off because they hate the whole
industry. No, it's grabbing this engagements, very high because during a crisis, a lot of people want to read. I think what we will see though is over the coming months, that's not going to bode well for us right now, even if engagements high right now during you know the play-by-play craziness of what's going on, right? We're getting a record open rates and shit like that. You know, what happens three months from now as
People just sort of disillusioned the news is over the crisis is over. It's like, you know, dude, nobody's talked about Ukraine right now the in my world like day-to-day people are talking about Ukraine, every day. I remember when that ship broke out is like, my mom, my sister, everybody. I knew was like glued to their phone watching these videos, fucking getting zielinski tattoos. And being like, Oh my God, I can't believe this, my heart goes out, thoughts and prayers of Allah. And then you're in day 98 and you're like, your thoughts and prayers, go back to like it. I wish this whatever, you know,
Whatever your daily life was really sort of revert, he stopped caring as much in the same way. Like I think what's going to happen for us with the milk road is that engagement spikes during this time, but actually it's not good for anybody in the industry, when somebody breaks like customer and customer trust gets shaken, this badly, that's it back like potentially
years. Oh yeah. I mean, it's not a question is, is it set back by years? It's just going to ruin it. I mean, like that. That's how big this is in my mind.
Yeah. And I
I think that one's probably not, if it was good if crypto is going to fail, if I don't think it's going to fail because of this like we've seen actually before the number one exchange go down before it's just like as the industry grows disasters cost a lot more money and they affect a lot more people. But like we've actually seen literally This Disaster before with Mount gox and that there's a that Netflix documentary for. I've talked about on the Pod about a Canadian exchange, that was literally doing this. You would go in. It was like same thing. Guys, is a boy Genius. Everybody loves a media loves him. Starts this Exchange.
Becomes the biggest one in Canada, turns out there was literally never anything at the deposits. Like, you would Click by Big one, you'd send them, the money would never buy Bitcoin, he would just show the number in your, on your computer screen. You? Yeah, you got 10 and he was just take the money, go do whatever you wanted with it. And there was literally just like a criminal, he was lying and
like anything to his own
death. Then he mysteriously died or Faked his own death. And you know, Sam Baker, freeze tweeting out one letter at a time. Here is, you know, who knows what's going on with this guy, too? So, like we've literally seen this exact disaster before, but it's higher profile.
It's louder. It affects more people. And now, instead of losing Millions tens of millions, hundreds of millions. Now it's billions that were playing with that, that got lost here. So I think it's definitely bad but I don't think this is like the death blow to crypto. I think, if it's like same thing with startups, like startups don't usually die due to competition that you don't you don't die because you got hunted, you died, because you starved. And I think if it happens for crypto dies is going to be for the same reason. It's going to die. Not because FTX blew up and the people just all gave up. And you notice I don't trust this thing.
Ever again, forever and ever and ever. And everybody decided that it's that really the use case of the utility wasn't strong enough to draw people in continually over time and like maybe, you know, the use case just wasn't big enough area. Wasn't strong enough, there wasn't product Market fit so I think startups. And in this case crypto, it'll die. If it dies of starvation, not of competition.
You know who's one of the big winners here is Martin shkreli. So basically Martin shkreli farmer, Bro, went to jail for a couple of years for scamming his farm, Pharmacy,
Something like that pharmaceutical company or something like that, you know, Finance guy, but very smart. I think a very smart guy and he has a sub stack. Now that is incredibly interesting and he's been doing Twitter spaces where he's been like commenting on this and he's like well you know jails not that bad like you know like you saying all this funny stuff and he wrote in his sub stack this morning that he predicts that Sam brankwyn freed is going to get life in prison and I thought that that was an incredibly interesting prediction you know Bernie Madoff.
Got, you know, hundreds of years. There's this other Ponzi scheme guy that was reading about based out of Texas who also got like 150 years and so it's not crazy that that could happen. You know, people who commit these hundreds of millions and billions of dollars Ponzi schemes, they get life in prison, which is kind of crazy that you can get life in prison for a nonviolent crime. But the, his prediction is that he's gonna go to prison forever.
So the Enron guy Enron got 24 years as his sentence. Let's see Bernie
Madoff. Well, he burn,
Died in prison, you know, he got sentence when he was in his 70s, but I think he got hundreds of
150 years was like the yeah, the, the headline number.
And then, I think that one of the, another big Ponzi scheme guy. I think, I believe his last name is Sanford. Mark Sanford. I believe he at age 60, something got 150 years. So it's, you know, regardless of when you get that, 150 years, it's a life sentence. And so, like, it
doesn't believe, it doesn't appear that this is literally a Ponzi scheme. A Punchy Team Works in a specific way. Like Madoff basically would like you like had all the money and like
One checking, cabbage know this. He had like a million dollars in a Chase account was just like whenever somebody requested who came out of that and and you know showed these great returns whatever. But in this case
basically the effects, the same here, you know like someone he defrauded people different tune of billions and billions of dollars and not only that but the interest you know Bernie Madoff. I don't know if you notice know this but you know that he was the head of the SEC for a minute of the security exchange. Yeah he was that or it was either that or NASDAQ I think.
I think he was the head of the SEC and he had and so he's like a big deal, you know. So that was like you know bulb on his part but SPF did this in an even Bolder way because he was mainstream you know he owned or they had the naming rights to the Miami Heat and they had commercials with Tom Brady. And so to me it's if I'm a judge I'm like dude you're even you're rubbing it in all of our faces, this is more egregious than Bernie Madoff, who was a little bit more quiet about it. So you're just like, taunting me while you're stealing so of
Of course, I'm going to like, get you as hard as I possibly
can. Right? Yeah, yeah. It's is bad. I mean, it's very, very visible. Very, very painful, very like, all day. I mean, just the gall of people, I mean, this guy is a real motherfucker for what he did. That's like a crazy crazy thing to do and you know, there's like I could see one version of it which is basically the there's one version of it which is he believed that this would like he wasn't trying to steal people's money.
He was like, you know what, like Alameda like based on what people think is that Alameda, when Luna blew up Alameda lost a bunch of money. And in order to save Alameda from having to, like liquidate everywhere, he's like, okay let me just loan you this money, you will make it back because you're good and then I'll like make it all good in the end. Nobody, no harm, no foul. I know that I shouldn't do this. He didn't tell anybody about this. That's like one version of reality. That could exist there is some evidence against that. But like, it's hard to know.
You know, we're talking about like autism Capital as a source Rings. There's a part of this evidence is like anybody just like to make it a screenshot whatever you know. Like that's it. It's hard to know at this point so you know so basically there's one version of reality that's that I which is he got stuck in a spot where he was going to lose a bunch of money and the his thing was going to go under it was going to be very public and bad and he tried to cover it up and he kind of panicked and made a terrible decision and he did something that was wrong and illegal. And against terms of service, at least, 44 ft x. But he
Tended to like make it, all right. And then there's another version
which was as of now that does not seem like a very likely
scenario and what part makes is, what evidence makes you say
that, you know, that people are saying that, like he was, he's allegedly, none of this has been proven that he's been wiring himself for five hundred million dollars and that coincidentally the FTX has been hacked things like that. Like I don't I don't feel as though that that is going to be the
outcome. Yeah so I'll say whatever. There's some probability that that that
That's what happened. And there's another probability, the more egregious possibility is like, basically, he's like screw everybody. We're going to take the money, we're to funnel it over here. I'm gonna grease thing, you know, he lives in the Bahamas. He's like, I'm gonna grease all the politicians here, I'm gonna Grease, the politicians, the United States be the second biggest donor to buy it in and I'm gonna, you know, go to their site. This crazy stuff for like, his girl who was running Alameda. Her dad was like, work with Gary Gensler and who's like the SEC chair and like, that's why SPF and Ken's look at meeting.
We're about to pass this bill. That was gonna be very bad for defy, but very good for ft x and it was like all this I can do game to basically like lock in this like money machine that he was going to, you know, continue to use for his own benefit and Alameda was like abusing the information that they had front-running. The trades like the like everything was evil and then there's like the slippery slope type thing. Like if you watch the Thera knows documentary. For example, I shouldn't say documentaries like, you know, the third. Oh yeah, the fucking movie. Yeah. Whatever. This the show,
Show. They make it look in that, like, what actually happens is, she's wants to do something great. She sort of delusional about her own abilities thinks that I'm an entrepreneur. I could prove everybody. Wrong thinks that the technology will work thinks that she's buying time to fake it till you make it to get it to work. And then at some point gets so trapped in the lie that she's just goes all in on the like because at that point like her entire image you go company. Fortune is based on this working and she's like you know eventually starts just
You know, actually lying in committing crimes and so like that that became like but that wasn't the intention day. One is like I'm gonna do this scam. I'm gonna scam everybody and so I think that's the only question here but if regardless the result is the same scam happened, whether he intended to do this came from day one or half way through got into in a spot panic and the started to lie and started to commit these you know sort of I don't know if I should call them crimes but they know do what he did
to add to the story. Do you know who this kid's parents?
Tsar. Yeah, they're like, ethics teachers at Stanford, dude. They teach their perfect. They're perfect. They're both professors
of law at Stanford law school. I think they also taught at Yale. I mean, so they're supposed to be like, nothing and I sold
literally teach ethics.
Yeah, in relation to law from a legal perspective, I believe and they the dad I think Joseph is his name. He is involved in FTX where he like, help them raise, raise some money, so
If this guy is full on lying criminal crazy, man, screw the, I mean screwing people out of money is bad. Also screwing your family and your parents is the worst. So like this whole entire story, you know, it hurts a lot of people but in terms of just like story arc and soap opera, it is just the best. It is the
best. Are you not entertained? Yes. Nothing else.
Is
entertaining. Did I really like crypto? You know, I've been like the crypto. It what is your pretty much?
Damn, let's put it on the record here. What is your prediction for crypto? Not not F DX Dy. It's pretty clear. What? Kind of we don't know the details. Exactly what happened. We know the result, do you think this all just goes to zero? Do you think this sort of Peters out for a long time? Do you think this rises again? What is your prediction?
I think. Keep in mind my perspective here is only emotional. So and and basically I learned from crypto just from talking about you. So, everything that I've learned about crypto, it's been live on this podcast.
I would say I'm not incredibly educated. I think that it's going to Peter out for the next 5 to 10 years. I think that and of teas are going to go to zero. I think that all the altcoins basically etherium and Bitcoin are the only ones that are going to ever have the chance of being interesting. Virtually, all of them go out of business. I think coinbase stays in business and actually might grow, because people are like, okay fine, you're the only place that I can trust. I think Luna and all this other stuff that was already dead, but like all these other like other one.
Hundred percent, go to 0 and never work. And I think that this guy gets sentenced to 25 to 50 years in
prison. All right, there's the prediction. What do you think? I predict Bad News Bears for the next couple of years is my guess. I don't know the time scale there but I'm just going to guess a couple of years crypto, winter. I mean, I think that's probably true for the entire economy right now, but I think particularly worse for crypto but I do think that in the end crypto is real and is going to work. And you know, I know that's kind of
Maybe now unpopular. Maybe it was always unpopular. I'm not sure. I don't really pay too much attention to that but yeah. Do you think Bitcoin the theorem and then Replacements to some of the other use cases, that that were built are going to rise? And I think some of the things that are told the truth. I think this guy goes down, I think going based as well. I think that most of the current coins that are completely overvalued, go to 0, but I do think that Bitcoin etherium are here to stay. And I think that they won't be the only two forever. I think there will be new ones that come and do well in the future. But I think it's II
I also think another down
cycle, anyone who raised the money and they had the word web 3 and their deck. I think virtually 100 percent of them are gonna fail and not work, not necessarily because they are bad entrepreneurs, or because their products are stupid. Although I do think that is the case in the vast majority of them. I think that they're just going to be laughed out of like existence and just like, dude, we're never working with you. Like, this is like complaint
consumers because they're ugly, which they are not because they're dumb certainly so
Because you're going to get laughed out the room. But is that? Because they're ugly. It's not because they're dumb. It's just because they're pathetic.
I think that's going to happen. Not all but closed to
all. Yeah, well that's true. Epic for most startups. All right, I gotta go visit my door. Keep knocking. All right, that's odd. I feel like I can rule the world. I know I could be what I want to be like a day's travel never looking back.
