Cardano ($ADA) Founder: Looks Like FTX Was Basically ‘A Good Old Ponzi Scheme’
On 13 November 2022, IOG Co-Founder and CEO Charles Hoskinson talked about the collapse of SBF’s FTX empire. FTX issued the following press release on 11 November 2022: Press Release pic.twitter.com/rgxq3QSBqm — FTX (@FTX_Official) November 11, 2022 And here...
On 13 November 2022, IOG Co-Founder and CEO Charles Hoskinson talked about the collapse of SBF’s FTX empire.
FTX issued the following press release on 11 November 2022:
Press Release pic.twitter.com/rgxq3QSBqm— FTX (@FTX_Official) November 11, 2022
And here is how SBF announced the collapse of the FTX empire:
2) I'm really sorry, again, that we ended up here.
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.
Ultimately hopefully it can be better for customers.
Yesterday (13 November 2022), during a Twitter Space co-hosted by Mario Nawfal, who is the Founder and CEO of IBC Group, Hoskinson had this to say about FTX:
“There are tribes in the institutional side of the cryptocurrency space and so you have like the Galaxies and you have Barry’s Grayscale and then you have the really big guys, like BlackRock, JPMorgan Chase, and Goldman Sachs.
“FTX was definitely a clique and in those circles you have like Three Arrows Capital and Voyager and and obviously everything Alameda touched, so Solana, there was an investment in Polygon. I think even Messari got an investment. There’s over a hundred and thirty companies that the tentacles of FTX touched and probably about 50 billion dollars of value in that entire circle and it looked like it’s a good old-fashioned Ponzi scheme, where basically they cook the books, they appeared to be a lot richer than they actually were.
“They amplified that by a flurry of acquisitions in trying to be the the crypto strong man during a bear market, alongside a lot of paid sponsorships like the relationship with Tom Brady and Giselle, you know, putting their name on arenas and these types of things, but at the end of the day, they owed a lot more and were leveraged a lot more than liquidity that they had on hand.
“And I guess Sam was playing a game of ‘well, as long as nobody pushes us too hard, when the bull market comes back, all these illiquid assets will become liquid, they’ll get a 10x or 20x, I can sell them, I can make everything right, and then I’m gonna walk away with like 30 billion dollars’. I mean, that’s let’s literally what Bernie Madoff had at the back of his mind and the 2008 financial crisis, basically, pushed it to a point where he could no longer hide the shell game that he was doing and he was basically forced to fess up and admit it.“
If you missed what @IOHK_Charles has to say on this FTX debacle when he came up for @MarioNawfal’s space (still ongoing now) here’s the standard monologue. At least for the Cardano peeps cos we’re so used to him doing that🤣
GJ my man. pic.twitter.com/SjHqhGqtOv
On 12 November 2022, in a video update (“More on FTX and the Industry”), Hoskinson had this to say (according to a report by The Daily Hodl) about the FTX collapse:
“Crypto didn’t fail. People failed. People in positions of trust. At the end of the day, as much as we like to believe in the principles of cryptocurrency, this had everything to do with people putting their money in centralized exchanges and organizations entrusting centralized businesses to do something on their behalf...
“That’s the very industry we’re trying to get rid of with the cryptocurrency space. Unfortunately, it’s going to now be conflated and there’s a very high possibility that the fallout of this will be new legislation, hopefully decent legislation, but there’s a strong possibility that it won’t be...
“This is unfortunately the consequence when you have people who don’t know what they’re doing get into positions of power and trust and create cascading and catastrophic damage. This is just the tip of the iceberg. If you look at the financial relationships that FTX had, as we go down the list, it could create a cascade of insolvencies and unfortunately crypto doesn’t get a bailout, but our competitors do…
“We don’t get [bailouts]. We just get the privilege of cleaning up the mess and then being blamed for it and having to deal with the financial outcome ourselves. Now, I do believe this is not going to kill cryptocurrency. I do believe that our industry will be much stronger in the future, and I do believe that our best days are still ahead of us…
“[FTX] could end up being the straw that breaks the camel’s back, and changes, at least in the short to mid term, how cryptocurrencies work in America. In particular, it changes the appetite lawmakers have for giving the industry a pro-growth freedom mandate.
“We could look at a world where non-custodial wallets are no longer permitted in the United States. We could look at a world where every cryptocurrency except for Bitcoin is labeled as a security and forced to comply with onerous regulations which will rob them of liquidity.”
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