The FTX meltdown is still a total dumpster fire. Here are the worst of the worst things about it.
Just a few weeks ago, FTX was one of the world’s biggest cryptocurrency exchanges on the planet. Now it is close to being worth nothing at all after it collapsed in shame due to mismanagement and fraud. The back story is here.
And worse, the spin-off stories from this collapse have not stopped. With each day that passes, it just gets wilder as new fires spark up everywhere.
SBF — A walking sh*tshow is still free to roam
The biggest tyre fire here is that Sam Bankman-Fried (SBF) is yet to be arrested. SBF is the star of this horror show — his mismanagement of FTX was wild. In fact, it is being considered by many as wilder than any other story in the history of financial businesses ever created. Ever.
SBF stole billions from investors in FTX, with more still missing. So where did the money go? This little poodle-haired founder bought luxurious mansions to have group sex in and, gave an exorbitant amount of the money to his favourite political parties. This, it is presumed, was to curry favour when it came to regulation time. Which strangely, he was close to achieving.
Bizarrely, he is still running around the Bahamas like an awkward toddler headed for the 7-11 to get an ice-cream.
For some perspective, when Bernie Madoff’s pyramid scheme was discovered, he was arrested within a day. And yet — SBF is still running around with his polycule sex club intact. Now that is cooked.
SBF chucked by lawyers
It seems that SBF is in so much legal trouble that even lawyers won’t help him. His chosen legal representatives, a team from Paul Weiss, will no longer represent him. This is thanks to what they say is his incessant and disruptive tweeting.
SBF’s ex-lawyer, Martin Flumenbaum of Paul, Weiss, Rifkind, Wharton & Garrison law firm has fired him from being a client.
“We informed Mr. Bankman-Fried several days ago, after the filing of the FTX bankruptcy that conflicts have arisen that precluded us from representing him,” the firm’s counsel said in a statement.
$1300 an hour
Away from SBF’s legal problems, someone is still needed to go through the mess that is the frozen FTX exchange. And that guy is John Ray. The new CEO of the platform is an expert in this type of clean-up. He did it for Enron after their own spectacular collapse, among other big names and their subsequent dramas.
At FTX, Ray is getting the big bucks to find out where the money went. In fact, he’s getting paid $1300 per hour for his toxic exposure to SBF’s bookkeeping. Which consisted of no bookkeeping. Like, none.
According to the court documents which can be snooped on here, even though FTX is bankrupt, key people are still on the payroll. These people are needed to aid Ray in cleaning the epic sh*tshow up.
The chief administrative officer, Kathryn Schultea, alongside Raj Perubhatla the chief information officer, are being paid $975 per hour to assist. This seems like big money considering that there is currently a freeze on company funds and everyday investors have lost everything they put into the exchange.
In Ray’s first-day declaration, he said, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”.
He also added that all he saw was “compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals”. He said the situation was unprecedented.
Tom Brady Ruined
While the FTX collapse has affected everyday people the most, rich people are seemingly becoming closer to being broke people. The Tom Brady case here could be absolutely wild. Brady really seems to be horrifyingly in over his head.
The guy is having a terrible year. Not only has he split with his wife, Gisele Bündchen, he has lost big on his FTX involvement. Both Gisele and Tom bought an equity stake in the company in 2021. Brady became a brand ambassador and Bundchen acted for environmental and social initiatives for FTX.
While the power couple is said to be worth US$650 million, it is unconfirmed how much of their fortune was sitting on FTX. Was it all of it? What if it was all of it? If he’s broke, there’s still hope. Tom Brady will always be welcomed as the local school football coach.
Not only does Brady have money trouble and ex-wife troubles, he is also being sued over his involvement in FTX, along with other celebs who got on the bandwagon without doing their homework.
As news of the FTX collapse gathered speed, the hackers used the chink in the armour to make a move. They managed to drain US$200 million in Ether into their own wallets. This all took place on the same day that FTX filed for bankruptcy protection.
And yet. Somehow, FTX’s native coin, FTT did not seem like a popular choice for hackers. That might be because it was a sh*tcoin not worth pressing the keyboard for. Many within the industry say that the hacker was an insider, and the Kraken Exchange say they know who it was.
Will these funds be retrieved and given back to the retail investors? It is doubtful. The hack is yet another scud missile, fired out of this explosion.
You were raised wrong, assh*le
After cries of, “Who raised you?” SBF’s parents have come under the microscope since this whole debacle. And of course, in SBF we can see where he gets his moral compass.
Both of SBF’s parents were professors at Stanford, specialising in ethics. Or the lack thereof. Even more weird is that SBF’s oldies were good mates with Gary Gensler, chair of the US Securities and Exchange Commission. It sounds like the Boomer version of the polycule. Must everyone in this saga be suspected of being in a polycule?
Bill Maher, on his show called Real Time, said that SBF’s mother wrote an essay in 2013 called Beyond Blame. In the essay, she says, “The philosophy of personal responsibility has ruined criminal justice and economic policy. It’s time to move past blame.”
Bill Maher asks, “It is really time? To move past blame? That’s a thing of the past? No wonder this guy’s a f*cking crook. You were raised wrong, assh*le.”
FTX Venture capitalists WTF
It seems that venture capitalists didn’t do their homework in the race to dish out their huge funds into the hottest crypto projects. Was there more money than actual crypto projects looking for investment? Platforms like FTX seem to have had money thrown at them without any questions asked.
Had they seen clips like this, they would have had a lot of questions. A lot.
Now, the FTX meltdown means that the VC landscape has changed. Money has not been so freely flowing lately, according to new research by blockchain company Galaxy. But this isn’t the end of the story. Still, the venture capital still keeps flowing… just not as much. Maybe SBF has a new company planned? Maybe his dad will write something about it this time.
The FTX Sex Tape
SBF and his on-again off-again girlfriend/employee/polycule beanbag sharer both seemed to enjoy a lifestyle of sexual relations within a group of people whom all ran FTX. Or pretended to run it.
Once the FTX pyramid scheme/collapse came to light, angry people started making claims to have a sex tape of Ms Ellison and SBF. On November 16, Twitter lit up with rumours of a sex tape.
Of course, this idea caught fire, but as yet, no sex tape has been found. That might be because no one wanted to find it. No one needs that three seconds in their life.
As the mess gets sifted through, we will keep you updated with this ongoing saga. May the crypto odds forever be in your favour.