Trying to make crypto sound interesting is like drawing milk from a stone — it’s impossible, and if it weren’t, you’d be weird for wanting to do it. However here I am, a bimbo through and through, ready to explain the tea, gossip and scandal going on in the crypto world. Come, take my manicured hand in yours and let me tell you a story about how multi-billionaire Sam Bankman-Fried and his alleged crypto polycule went from hero to zero.
In the words of Forbes senior writer David Jeans: “Trying to understand exactly how the second-largest Crypto exchange in the world has become insolvent and filed for bankruptcy in the space of a week has been a great challenge.” This is a smart man with a big brain using big words. Before today I thought insolvent meant something couldn’t dissolve in water, but alas.
Stories like these use a lot of terms that are only relevant to crypto bros. It’s the bonafide gatekeeping of knowledge. Exchanging money for non-existent online tokens and vice versa is something that involves finance, being terminally online and a strong dedication to the art of never getting laid. It’s one hell of a topic to wrap your noggin around and even the experts get confused.
As someone who fucks, as I’m sure you do too, I want to provide this knowledge to you in a way that also fucks. We are leaving this place satisfied, goddammit.
What the fuck is happening?
So there’s this guy, right, and his name is Sam Bankman-Fried. He’s the co-founder of this cryptocurrency exchange platform called FTX.
He’s also a nerd renowned for wearing a t-shirt and shirts.
Just last week he was noted as being worth AUS$24 billion. That’s like the net worth of 24 Rihannas. Insane. FTX doesn’t even sell beauty blenders.
On November 11 this multi-billionaire filed his company FTX for bankruptcy and he resigned from his top-dog position.
Bloomberg’s Billionaires Index (which doubles as my submission to the Death Note) has now put FTX’s value at US$1. This is the most impressive depletion of wealth in the history of humanity.
Maybe if they converted that number to Australian dollars they’d get 50 more cents out of it? Just a thought from a girly who dropped maths in Year 10.
“It’s such an unfortunate, stunning and shocking moment for the industry,” analyst at Oppenheimer & Co. Owen Lau told Yahoo! Finance.
“There will be a lot of angry investors, angry customers and angry regulators around the world.”
What’s FTX???? Fuck the xenophobes?
Almost. Not quite. Actually, that’s totally incorrect, but it should be a thing.
FTX stands for Future Exchange, and it was started in 2019. I know what you’re thinking, it absolutely should be called FE. I’ll even accept FEX.
Mr. Bankrupt-Fried owns 70 per cent of the Bahamas-based company. Now that he’s gone he will be replaced by John J. Ray III. I know that none of these names sound real, but they sure are memorable.
FTX basically lets you exchange cryptocurrencies for others, like a big online bank. According to Investopedia, the company is popular because it specialises “in derivatives and leveraged products”. To understand what that means, I would need to be paid enough to end up on Bloomberg’s Billionaires Index, so let’s move on to things we understand.
The company paid big money to advertise at the 2022 Super Bowl. Oh, how the mighty fall swiftly.
The Super Bowl charges approximately US$7 million for a 30-second ad and this ad here is two minutes and 30 seconds long. You do the maths, I’m too scared to.
So how did the company go from paying US$7 million x five for an ad to total bankruptcy?
Binance!
Binance is another cryptocurrency exchange site. It’s like finance, but bisexual.
Think of it as FTX’s main rival. Both sites do pretty much the same thing. It’s like Commonwealth Bank entering into a cage match with Westpac.
CEO Changpeng Zhao tweeted that his company would be selling FTT en masse. FTT is FTX’s own cryptocurrency. It’s like if CommBank made its own currency that you could exchange Aussie dollars for. Get it?
So now we have a rival bank completely removing a currency. What’s spicier is that Zhao cited “recent revelations” coming to light.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
He never specified what this spicy tea was, but he did tweet that Binance’s move to sell FTT wasn’t in the spirit of competition.
“Regarding any speculation as to whether this is a move against a competitor, it is not,” he tweeted.
Shortly after the tweet went out, many others began selling their FTT at break-neck speeds. You can see where this is going.
The “recent revelations” that came to light
The crypto journos over at CoinDesk shared some damning information about our good friend Sam Bankman-Fried which many believe explains what inspired Zhao and others to sell their FTT.
Introducing Alameda Research, Bankman-Fried’s other Bahamas-based company with suspicious ties to FTX.
Suspicious as in, FTX is alleged to have been moving US$10 billion in customer funds to Alameda Research. The research in question being risky crypto trades using FTT.
“A sister company making money moves with my FTT using my money? Time to pull out,” is what I would say if I was a nerd who invested in this stuff.
CoinDesk claims to have found out that most of it is built upon a dragon’s vault of FTT through a leaked balance sheet.
Alameda CEO Caroline Ellison attempted to save face by saying there was heaps of money not reflected on the leaked sheet.
If you don’t like FTX or Sam.. then leave the platform (and good luck) but don’t attack Caroline for sharing more information than they even needed to.
— BitTradr (@BitTradr) November 6, 2022
Caroline Ellison however is part of some wild allegations herself.
Sex, Drugs and Crypto
CoinDesk love a bit of a tea spill and revealed that a “cabal of roommates in the Bahamas” ran Bankman-Fried’s crypto empire. These roommates, together with SBF, formed a ten-person “sexual” polycule.
Each member lived in Bankman-Fried’s US$39 million Bahamas penthouse and all reportedly worked for FTX or Alameda Research.
Caroline Ellison is alleged to be a “regular” user of amphetamines after she tweeted as much herself.
nothing like regular amphetamine use to make you appreciate how dumb a lot of normal, non-medicated human experience is
— Caroline (@carolinecapital) April 5, 2021
She is also a noted Harry Potter fanatic, which explains more than I want to get into.
Who’s buying SBF’s penthouse in The Bahamas? 🇧🇸
Just listed. $39,500,000 & it’s yours. pic.twitter.com/IH2X34pvFi
— Altcoin Daily (@AltcoinDailyio) November 13, 2022
So yeah, a polycule almost destroyed the whole crypto market. Fun!
I’m off to have sex or something. This shit was too much.
