Damn crypto, you’re scary! The FTX collapse happened literally overnight (depending on where you live and if it was a night when it happened to you!). As a $32 billion empire went out with a bang, this exaggerated drama has now turned into a comedy. Absurdity, one that Albert Camus portrays is nothing but the loss of meaning for the person persistently looking for it. How does Camus relate to the state of the crypto market? Well, it’s absurd. How Sam Bankman-Fried kept lying until literally moments before the FTX collapse, is absurd. Within absurdity however, lies both comedy and drama. As investors lose all their holdings earned from dreary nine to five jobs overnight, the tragedy deepens. But, when one listens to Caroline Ellison talking about crypto and knowing next to nothing about it, comedy emerges. Perhaps, the FTX collapse is the collateral of a crypto war, a fight over lobbying, politics or simply monopoly. Maybe, it was a big fish (Binance) eating the less big fish (FTX) moment, but then why are planktons cheering their fight?
Now, in this moment of absurdity that we share, questions arise from our skepticism. If SBF built an empire on lies, if Do Kwon built an empire on deception, who else is lying? What will be the next multi-billion-dollar giant to go down? Yes, Changpeng Zhao won this round and rightfully so, but should one man be able to take a dookie in your investments? The way it seems, one man (in this case CZ) can make us small investors bleed and dump the market overnight. And let me tell you, this is not decentralized or remotely what decentralized is! Maybe, some tech billionaire like Elon or a pseudo philosopher like Michael Saylor should start working on Crypto 2.0 already!
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FTX Collapse
Only days after Binance liquidating FTX Token, the exchange giant has admitted defeat. In a press release, FTX has filed for Chapter 11 bankruptcy which does include FTX US. Even worse, FTX US froze crypto withdrawals temporarily causing more panic.
“[FTX and its affiliated groups] have commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the District of Delaware in order to begin an orderly process to review and monetize assets for the benefits of all global stakeholders.”
In Addition to FTX and FTX US, Alameda Research is also going down with the ship. Furthermore, Sam Bankman-Fried resigned as the CEO while John J. Ray III will replace him.
The new CEO is all about assuring everyone that he will take care of them. Subsequently, a whole lot of promises were made in his first speech.
“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders.
The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness, and transparency.”
Sam Bankman-Fried
Once a crypto billionaire with a net worth as high as $26 billion, SBF is long way behind his ATH. Last week, his net worth fell down to $16 billion and today, well, today it is zero! This is according to Bloomberg which means that I have more money that SBF (pressing x for doubt).
A few days ago, Changpeng Zhao pointed out that SBF has been lobbying against competitors. CZ did not dive into details as to how FTX was cheating in the competition. However, soon after FTX collapse, whispers are turning to speech and the situation seems to be escalating.
The conspiracies are now running deep while revealing a connection between the FTX and the SEC.
Minnesota representative Tom Emmer is investigating a connection between SEC Chair Gary Gensler and FTX. Apparently, Emmer’s office received reports regarding a partnership between the SEC and Sam Bankman-Fried to acquire a regulatory monopoly in the US.
Mr. Emmer took on Twitter to address the FTX collapse and the state of the crypto industry.
“This is a very interconnected world in crypto with a few concentrated players in the middle and one of those concentrated players would have the toxic combinations of lack of disclosure, customer money, a lot of leverage, meaning borrowing, and then trying to invest with that. And then when markets turned on him, it appears that a lot of customers lost money.”
We can’t help but to completely agree with the US representative regarding the industry. The “concentrated players” as he mentions are indeed the exact issue we hoped crypto would not have. This time around, SBF took an L and he deserved it. However, who can prove that Binance is any different? With all the lies flying around, and of course billions of dollars raised and dumped in only a few days, it would be impossible to not lie to the investors.
