Every story that’s worth telling has a protagonist and an antagonist. When it comes to the FTX debacle, it’s hard to say who the protagonist is. At the very least, however, we have a clear-cut bad guy and his name is Sam Bankman-Fried.
Just to provide an oversimplified recap, Bankman-Fried, the founder of cryptocurrency platform FTX, allegedly mismanaged his company’s funds. Consequently, the company was apparently unable to fulfill FTX customers’ withdrawal requests in a timely manner.
FTX ended up filing for bankruptcy and, as collateral damage, the Bitcoin price crashed to $16,000. Even now, cryptocurrency exchanges are facing a credibility problem and politicians are considering harsh crackdowns.
GameStop and other companies immediately cut all ties to FTX. Bankman-Fried pathetically said he’s “really sorry” and expressed hope that there would be “some amount of transparency, trust, and governance” in the aftermath.
There will likely be “governance” in the form of strict regulatory measures against cryptocurrency platforms, even if they had no ties with FTX. That may provide some “transparency,” but there will be little “trust” in the wake of Bankman-Fried’s malfeasance.
The best outcome we can hope for, at this point, is a flight to safety in the crypto space. Poorly managed, opaque platforms will get weeded out of the crypto gene pool, while a handful of bigger and better regulated platforms will survive and thrive.
Meanwhile, to many people’s chagrin, Bankman-Fried is a free man. Not only that, but he’ll be a featured speaker at a prestigious summit this Wednesday.
Other speakers at this event will include U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen, Facebook/Meta Platforms founder Mark Zuckerberg, TikTok CEO Shou Chew, and BlackRock CEO Larry Fink. Why none of them have dropped out to protest Bankman-Fried’s inclusion is anyone’s guess.
It’s also anyone’s guess as to why, so far, Bankman-Fried has gotten away scot-free. Perhaps we can attribute it to the duality of America’s justice system, which has separate sets of consequences (or lack thereof) for the wealthiest 1% and the other 99%.
We can also wonder how Bankman-Fried, who is only 29 years of age, managed to con so many people, including some high-net-worth investors. If there’s any silver lining in all of this, it’s that just maybe, people will learn a valuable lesson: All that glitters isn’t digital gold.
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This isn’t to suggest that scams couldn’t exist in the physical commodities space. Yet, it’s nice to know that if you have physical bullion in your hand, there’s no con or scam; it’s an enduring store of value that has no counterparty risk.
By the way, don’t expect to have an opportunity to confront Bankman-Fried face-to-face. Regarding Wednesday’s literary summit, he will reportedly be “participating in the interview from the Bahamas.”
While Bankman-Fried is enjoying the warm, breezy weather, social media denizens are furiously fuming and fulminating. If Bankman-Fried is the type of guy who likes attention, he’s getting more than his fair share – not for founding FTX, but for being a version of a celebrity we might call a “crime-lebrity.”
It’s a shame that someone could become a celebrity simply through wrongdoing, but here we are. At the same time, it’s certainly gratifying to see a “crime-lebrity” get relentlessly roasted on social media.
We can feel @Alexand56464660’s pain as he alleges, “Scam man. I lost everything because of you.” We get to join the chorus of indignation along with @CryptoCred’s lament, “RIP rule of law in the United States.”
Most of all, we can collectively ask the query that @JedDefi has so succinctly articulated: “How are u not in jail?” There will, I suspect, be no satisfactory answer anytime soon, however. As the Treasury Secretary and powerful corporate CEOs refuse to distance themselves from Bankman-Fried, it’s not hard to connect the dots and see where their loyalty resides.
Again, the 1% will have each other’s backs and the 99% will inevitably get the short end of the stick, it seems. Career politicians and corporate fat cats will pontificate about crypto market oversight, but it’s awfully hard to provide oversight if they’re blind to criminal activity.
Still, if we won’t have justice, we’ll have social media outlets with which to express our outrage. As long as the First Amendment prevails, Bankman-Fried will get his due roasting and something resembling a free society can continue to exist in America.
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