The Incredibly Stupid Catastrophe Caused by Sam Bankman-Fried and FTX

Slate ^ | Nov 10, 20221:43 PM | Alex Kirshner

[Zhang Fei]

During this year’s Super Bowl, cryptocurrency exchange FTX ran an ad for which it paid Larry David some unknowably huge amount of money. It was one of the best ads of the night, no question, the perfect combination of actor and script. FTX got America’s most famous curmudgeon to express skepticism toward various scenes of great innovation over the course of human history. The wheel? Larry David didn’t like it. The fork? Absolutely not. On it went: the toilet, coffee, the Declaration of Independence, the lightbulb, dishwashers, the moon landing, MP3 players, and … FTX, “a safe and easy way to get into crypto.” Based on prevailing rates, FTX probably paid tens of millions of dollars for the time alone, which it was able to do, no problem. “Don’t be like Larry,” the ad said. Try FTX!

Larry David, or at least “Larry David,” has been vindicated. FTX was not a safe way to get into crypto. The company is verging on bankruptcy after running out of money to cover withdrawals in its international business. CEO Sam Bankman-Fried, aka SBF, is 21 tweets deep into an apology thread that begins with “I fucked up” but only shines partial light on what’s gone wrong. In a sign that things are not going well, the thread (for the time being) wraps up with SBF saying it was “NOT ADVICE … IN ANY WAY” and that “I WAS NOT VERY CAREFUL WITH MY WORDS HERE, AND DO NOT MEAN ANY OF THEM IN A TECHNICAL OR LEGAL SENSE; I MAY WELL HAVE NOT DESCRIBED THINGS RIGHT.” It had looked until Wednesday like one of FTX’s rivals in the crypto exchange game, Binance, would buy out FTX and thus let it carry on without disaster.

[Zhang Fei]

An interesting sidelight of this implosion is the fact that SBF and his lieutenant, Ryan Salame, were (according to Bloomberg) the two biggest individual donors to the Democrats and GOP respectively in 2022.

[DAC21]

“The Incredibly Stupid Catastrophe Caused by Sam Bankman-Fried and FTX”

Translation, CRAP! tens of millions of future RAT campaign donations just went down the drain.

[ImJustAnotherOkie]

I wonder how much money Lewis Hamilton has wrapped up in FTX?

[SaxxonWoods]

Wait, these guys (and their followers) are supposed to be the smart ones, while the bankers are the totally dumb ones.

[Chode]

i hope all of it... 8^)

[Chode]

their logo is already scrapped from everything...

[EEGator]

You stole my post! :)

F Lewis Hamilton.

[Chode]

thank you...

[Chode]

hit it...

[SaxxonWoods]

Sam will be known from now on as ‘Bankman Gotfried’.

[NWFree]

And I was just sure this fake currency startup would make a go of it 😏

[EEGator]

I feel better now. :)

[ImJustAnotherOkie]

I hope FTX is current with them /s/

[Chode]

*

[proxy_user]

Guys like Jamie Dimon have been in banking for forty years - they have seen this all before.

[glorgau]

Be like Larry... get your cash upfront.

[Chode]

[Theoria]

[ChuckHam]

On Kudlow’s show today Charles Payne said he heard Tom Brady and his ex-wife had their fortune in FTX.

[EnderWiggin1970]

I retired (actually now help manage an NGO without pay) after the crypto boom in 2017. Some old co-workers who got into crypto after my bombshell early retirement still ask my opinion on investing in crypto. The answer here is simple and same as it's always been: Not your keys, not your crypto. Keeping money in someone else's hands is inherently risky (as crypto or anything else).

All an exchange needs to do is securely hold customers funds while making money off their trading fees. And yet so many exchanges get greedy and treat customer funds like Ferris Bueller treated his friends' dads sports car. When will people learn?