Sam Bankman-Fried’s FTX empire crumbled in 2022 after a $6B bank run exposed its Ponzi scheme—Alameda Research’s fake balance sheet, 100-to-1 bets on pre-IPO stocks, and $530M FTT dump by Binance. SBF’s "effective altruism" ties to Silicon Valley elites (like David Shore’s opaque super PACs) and his $30M political donations masked fraud, while his parents’ tax-law expertise and progressive activism raised suspicions of systemic complicity. Bankruptcy filings revealed $9B in liabilities against $900M in assets, with missing records and a "negative $8B" fiat entry, yet SBF dismissed regulators as clueless. The collapse exposed crypto’s fatal flaw: underwriting loans on volatile assets, not creditworthiness—echoing 2008’s mortgage crisis. A cautionary tale of unchecked leverage, media hype, and the illusion of decentralized safety. [Automatically generated summary]
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Sam, how you doing?
This is Brace Belden from the podcast TrueAnon.
I was wondering if you had a moment to chat later today.
Obviously, I already shot you a text message.
You know, I've been in trouble myself several times throughout my life.
You know, I have gotten out of it.
I was wondering if you would be interested in having a conversation around things of that nature.
Give me a call back.
Obviously, you can see the number you missed a call from here.
But yeah.
All right.
Have a good day.
You're getting pretty good at leaving these voicemails.
All right.
Well, we'll see if he hits me back.
Hello.
Hi.
How you doing?
That was so short.
What is that?
Hello, Brace.
Hey, baby doll.
How you doing?
So nice to be here.
Truanon Chronicles00:04:12
It is nice to be here in this, you know, we have a young Chomsky right between us.
We're cozy here.
We got cozy style on the couch.
Almost as if we were in some kind of Bahamian polycubal.
But we're not.
We're not, to be clear.
No, this is Truanon.
Hello, everyone.
I'm Liz.
My name, of course, is, you know me, you love me, Sam Braceman Belden.
And of course, we are joined by my, you know, well, technically, it's different companies, but we do work closely together.
This is, of course, Young Chomsky.
And like I said, it's Truanon.
Like she said, it's Truanon.
Fuck, we haven't done this in a minute.
We're out of practice.
One of the longest minutes of all, Liz.
About a week.
Yeah.
We're out of practice, but you know what?
We're actually ready to rock today.
Oh, man.
We've been, I don't know, champing at the bit to do this episode.
Champing or chomping?
That's an age-old debate.
Okay.
Well, she's been champing.
I've been chomping.
There's proponents on both sides.
I'm going to be honest with you.
I've been doing the thing that most people do when they think of when it's an aggressive mouth action, which is chomping.
But you can be doing champing.
All right.
Well, I'm the champ.
So here I am.
And I got to say, not a great week for crypto.
Well, that depends on how you look at it, right?
Which side of the ledger are you?
Which side of the ledger?
Oh, wait, no, both sides are bad.
Yeah.
Well, I think for some people, they've been doing all right.
For other people, they've been doing significantly less all right than others.
But yeah, Liz, there's been a big shake-up in the crypto world.
And I don't know why I said it like that, but things are looking pretty grim if you have put all of your real money into imaginary money.
Yeah.
Also, if you work for any publication that has covered this, you might have egg on your face.
I got to be real with you.
There's going to be, you know what?
A lot of people own a lot of mea culpas all around.
Yeah.
Not us.
Zero Maya Culpas here.
Yeah.
Due to Liz's latent anti-Semitism and my fear of people who live on islands.
Wow.
Don't take that the wrong way.
We have actually never been a pro-Sam Bankman Freed podcast.
No.
We are going to get to who that is exactly and what has happened in a second.
But I got to say, before we do and get into the details of the story, just as an overview, this whole thing's got it all.
Everything.
I can't believe it.
Ponzi schemes, curly hair, islands, polycules.
Parents.
Parents, Democratic donors.
Hyphenated names.
Joe Biden, sort of loosely related.
Ukraine, loosely related.
No, we got Ukraine in the mix there.
We have a mousy woman who has a troubled relationship with sex.
Bad gaming.
Tumblr.
It's got it all.
No, there's more than that.
Krunig makes an appearance.
Menchus Moldbug makes an appearance.
I mean.
What?
Podcasting.
Podcasting.
CZ Binance.
He's in there.
He's in there.
Yeah.
Enemies.
What?
Enemies make an appearance?
Enemies make an appearance in most of our episodes.
No, no, our enemies.
I mean, like the, you know, enemies back and forth.
Oh, conceptuality.
The idea of enemies.
Yeah, Shakespearean.
Oh, again, that is probably every episode we do.
But no, you're right.
No, this is a Shakespearean enemies type arrangement that they have going on.
Yes.
Michael Lewis.
Uh-huh.
Larry David.
Oh, my God.
Tom Brady.
Tom Brady.
And by the way, spoiler alert, Sans laser eyes.
Yeah, take away the laser eyes.
But basically, every single concept, person, place, thing that you have ever found annoying in your entire life has all congealed this week on one tiny little island out there in the Caribbean or however you pronounce it.
That is your own personal choice.
Okay, so let's talk about it.
What we're talking about is, hopefully you've heard about it a little bit, but not too much.
So you keep listening to the episode.
Too Good to Be True?00:15:25
FTX.
Foot and toe exchange.
The swap insight.
You don't like that?
Is the episode about no, this is about we're doing about the crypto thing?
Yeah.
Okay, cool.
Then my 45 pages of photographs, I guess you just ignore those in the notes.
Well, what did it mean to exchange foot?
Oh, I see.
It's you exchange both feet and toes, not foot for toes.
Foot for toes, yeah.
It's unequal.
Okay, FTX, not foot for toes exchange.
FTX is actually a crypto exchange, a crypto exchange founded and run by a man named Sam Bankman Freed, aka SBF.
I'm going to call him SBF, which I agree is annoying, but so is saying Sam Bankman Freed over and over again.
I know, I feel like he should, every time I've thought of the word or the name SBF, it's automatically, I want to, it's like SPF.
You want to put a number next to it.
And I got to tell you this: sunscreen, totally fake.
No, I don't think that's it.
A lot of new research has come out that say that it actually gives you a ton of wrinkles.
Oh my God.
Okay, SBF.
He's been, I mean, he's been everywhere as the kind of like legit face of crypto, which we're going to talk about.
He was on the cover of Fortune not that long ago, actually.
They basically had this huge headline.
It said, is this the next Warren Buffett under this man's face?
The answer to that would be no.
Most question mark headlines.
Yes.
I'm going to say it's a no.
Fetterman's Law of or Veteridge.
Veterans Headless.
Veterans.
John Fetterman's Law of Headlines.
Oh, God.
But no, I mean, he is supposed to, he was slated to speak, I think, next week at some New York Times conference alongside friend of the show, Zelensky.
Yeah.
Janet Yellen, which is, of course, named for the thing that she does when I am viciously fingering her.
And all these other kinds of people I don't have in front of me right now, but you know, those kind of people.
Zelensky's Yellens of the world.
Yeah.
SPF, you know, at one point was estimated to be personally worth around $10 billion.
That is closer to zero now.
This is, before we get started, really in here, I have a bone to pick with this.
Love it.
Let's start with this.
We're doing this estimate.
Okay, we're going to just, can we put a little chime here?
This is bone to pick number one.
Bone to pick number one.
There'll be a lot of bones to pick.
Who is doing these estimations?
Because I'm sorry.
If your personal fortune can go from $10 billion to zero dollars on paper that we know, obviously he has money stashed away.
But the also, I think he's very illiquid.
Yes, yes.
Hence, the ability to go from 10 to 20.
Dry as a bone.
Yellen style.
But she is, I mean, he is like, you know, he's gone from basically having being one of those persons known as, you know, rising star young billionaires to having, again, by the metrics that fortune and companies would trace this by, to having zero dollars.
Yes, zero dollars.
Which makes one wonder if that money is exactly whatever as liquid is being.
Yeah, it turns out it's basically all fake.
Again, spoiler alert.
So he ran FTX.
He also ran a, what's like, you know, basically a quant firm that features prominently in the story called Alameda Research.
That he founded in 2017.
Alameda is basically like a market maker and a trading desk in the crypto space.
It's like the story goes that they got pretty big with the kind of splashy Bitcoin arbitrage trade.
And everyone was like, huh, it's a little funny that the guy running one of the largest exchanges is also running this huge trade firm that are allegedly separate, but because that would be, you know, basically a total conflict of interest, right?
Yeah.
And everyone was kind of like, well, it's crypto, you know, you know, everything here is kind of scammy.
So I'm sure it's totally fine.
Let's not really look into it.
Well, so the thing is with Alameda, so he started Alameda first.
Yes.
He started that after he was doing some trading at, what was it called?
Jane Street.
Jane Street, yes.
He was only there for a couple of years, by the way.
Oh, I know.
The man has not had many jobs.
But well, he's got a lot of work to do, but very few jobs, if that makes any sense.
But, you know, his whole thing is, this is kind of his origin story, right?
Is that he found out that a Bitcoin in America or in Japan was worth like he could he could buy a Bitcoin in one country and sell it in another country for more money.
Yes.
Seems like a pretty basic thing that you'd be able to do.
And he says, oh my God, this is, I can make so much money doing this.
This is all this money being left on the table.
But then he found there was so much red tape that nobody did it.
But he found a way to break through that red tape and on the back of that built Alameda Research.
Now that goes the origin story.
Yes.
So goes the story.
I will say that in the aftermath of the blowup of FTX and Alameda, many people have come out of the woodwork to basically poke holes in that story, which maybe we can get into.
Bone to pick number two.
Where were the holes prior to this?
Yeah, people covering those holes.
Exactly.
Maybe a little bit of whack-a-mole.
Because I've seen these facts repeated many times, and I'm wondering, did you do your due diligence, Mr. Journalist?
I'm going to say nobody's doing any due diligence.
And now everyone, egg on the face, mea culpa.
Yeah.
Well, we're not actually falling into all the holes.
I'm going to be real.
We've actually received very few mea culpas.
Oh, yes, which we're going to get to, believe me.
So, FTX, like you said, FTX gets founded about a couple years after Alameda.
It was founded in Hong Kong, very quickly relocates to the Bahamas.
This is the location where much of our story will be taking place.
FTX, as a crypto exchange, was one of the largest.
It offered basically futures products, which are really crazy derivatives products in the crypto space, right?
They offered customers anywhere from 20 to 1, some people say even sometimes 100 to 1 leverage on things like pre-IPO futures, where you could basically bet on what the Airbnb stock price would be in the future when it ultimately IPOs.
So, all right, I'm just a, I'm just a, I'm a simple gold country gold bug, Liz.
Absolutely.
I keep all my shit in precious metals.
As you should.
Let me ask.
So, what you're saying here is that using FTX, I, a trader, yes, could bet my money.
I have one Bitcoin, I could leverage that for 20 times that amount and bet how much a IPO would be of a company that has not IPO'd yet.
Yeah, that's just one of many examples of the kind of like bets.
I just call them bets because that's a bit of a normal thing.
I mean, that's literally a bet.
Yeah, I'm a gambler.
That's a bet.
That is a, let's say, a financial product, a derivative product or security that is not offered on what you would call the TradFi stock exchange.
The Mennonite Stock Exchange, yeah.
Illegal.
Okay, that's illegal in the normal world.
Yes, gotcha.
In the normal world.
So, we're in the underworld, baby.
We are in the Bahamas right now.
So, this guy was letting me.
What if I lose that bet?
Well, that's a good question.
If you lose that bet, there were safeguards in place, right?
That would basically auto-liquidate your position.
And this will come up later in our story.
So, that if you were, you know, you made some crazy bet that goes south, rather than kind of letting you, you know, accrue those losses or whatever, it would automatically liquidate your holdings so that it could be made right.
That makes sense.
Gotcha.
None of this makes sense to me.
Okay.
FTX also offered people, this is great.
They offered them 8% interest.
Yes.
If you were to say, keep your assets, anything from dollars, Bitcoins, any kind of crypto product, or just literally like fiat in their, you know, within their exchange on their platform.
So there are stories of people who'd be like, oh, I would use it like Venmo or Zelly.
I don't know if it's Zelle or Zell.
It's definitely for sure Zell.
But we'll call it.
You could pronounce things that way.
Can, but I just want to like ask you, like, if you were naming a product, would you call it Zelly or Zell?
I wouldn't call it either.
Okay, fair enough.
Then, you know what?
But people would use it like that, you know, and they'd be like, well, I could get 8%.
That's better than anything I get on checking count.
Here's, okay, bone to pick here.
If you see that, you should ask, hey, where are they getting that interest from?
How come I can't get that at normal places like a bank?
Yes.
Well, this is, this has been, so I'm a guy who understands very little about money outside of the fact that it is backed by something that you mine from a cave somewhere in the gold country or pan.
My thing is, so I'm like, this seems too good to be true.
I'm putting my money into FTX.
I'm keeping it there.
And I'm getting 8%.
Like, I'm making 8% of that money once a year.
Yes.
This seems to be something that occurs a lot with crypto exchanges, particularly ones that go bust, is that they gave you these incredibly extraordinary high amounts that you can earn in interest or something like this.
Too good to be true, one might say.
You put your money in there, and then eventually the bottom falls out.
Yeah.
Because they've used your money to either steal or, well, almost always steal, I guess.
Yeah, high reward, zero risk.
Yes.
You know, buy in.
Well, that's something I encounter a lot with FTX is, you see, all these like these, these articles about them, or like even their own sort of statements?
And there's, I saw several statements from them talking about these products they offered with zero risk?
Yes, and that doesn't seem to me to be.
You know again, gold bug doesn't seem to me to be something that is existing in the world.
No, and in fact, should be like immediate, like number one sign of a of a scam, if it's the classic phrase, if it's too good to be true.
It probably is yes, and you know it's funny.
I was just reading, before we started recording, one of the many people that are coming out of the woodwork.
I saw this some VC, you know, with like threat emoji all over the place, with something about how he had initially invested or his company had initially invested in FTX back in like I don't know 20, I don't know 2019 or something like early on, and said that at one point, SBF went to like a crypto conference, like one of those fucking, like you know,
Las Vegas convention center people set up booth kind of situations and literally was advertising like zero risk, high interest, like investment opportunity, and the guy was like that.
That's what guys shilling pyramid schemes and Ponzi schemes do.
Like what are you doing?
Yeah um, funny enough, he hasn't said anything for you know yeah, in so many years.
But anyway, Alameda for its, you know, you know.
For on its side uh, you know, remember the, the quant wing of of Sbf's enterprise, it just offered one single product, which was 15 annualized loans, which they claimed.
Again, no downside.
We guarantee full payment on the principal and interest.
They said that their total annualized performance was 110.6 percent.
So again, no downside Yeah, like, oh, this is like totally perfect.
And look at how much we've achieved.
Oh, we get returns of 110.6%.
Like, are you out of your fucking mind?
That's insane.
It makes no sense.
Double your money.
Too good to be true.
Yeah.
So all of this is to say that it's, it has the classic marks and markers of like basically a crypto joke, right?
Of a Ponzi scheme.
Yeah.
In hindsight, 2020, this seems to be such an obvious grift, right?
But this had like massive institutional support.
Tiger Global, SoftBank, Sequoia Capital, the Ontario Teachers Pension Fund.
It's their biggest investment.
75 million.
So this is from Sequoia Capital.
Like, I mean, this is how much people are like blowing smoke up this fucking dude's ass.
Nothing is a sure bet in crypto, but just the possibility that FTX could join or even eclipse the big four of American banking means that it's already valued at $32 billion.
So people saw FTX really as like, look, everyone basically was like, we know crypto is scammy.
Of course, crypto is scammy.
It's a scammer's paradise.
But FTX is the real deal.
Like this is going to be the one that really like legitimizes the industry.
Yeah, yeah, yeah.
And he was, I mean, SBF was sort of being feeted as like the guy fetid.
You know what?
You can say it any way you want.
He was being, well, I mean, you know, sort of a pun on the name of this exchange.
He was being feeded all over, like, you know, he's on television, shaking like a leaf, by the way, you know, being brought in front of Congress as kind of like the good old boy of crypto, right?
Like a sort of approachable face and like somebody who's like, actually, you know, really believes in the mission.
He's not like some scumbag.
Like, you know, his parents are, well, we'll get to his parents, but, you know, his parents are like respectable Democratic Party members and big donors.
And it's like, you know, he's like a real, a real guy that we can kind of like, he was like, he was a respectable face of crypto.
Totally.
And he had like a lot of people like wrapped around his finger.
I mean, shockingly, the press was just completely and totally all over him.
I mean, You know, you go back and you, I mean, that one, you know, that very famous interview that he gave on odd lots to Tracy Alloway and Joe Wiesenthal and Matt Levine at Bloomberg, where he literally describes a Ponzi scheme as the basis for like almost all crypto yield farming, right?
That even in that like encounter, that exchange with them, they're they're all pretty much like, wow, well, maybe there's a better way to look at this.
Like, it's pretty shocking the way that everyone just like treated one of the most like obvious and blatant confessions to basically running a Ponzi scheme as like just totally normal.
And here's bone to pick number four, I think it's at this point.
Seuss counting.
Yeah.
Listen, my thing is, is this.
If you just come from the mindset that every single similar business to Sam Bankman Freed's is a Ponzi scheme of some kind or a criminal enterprise of some kind, you are almost certain that is a safe bet.
I like that.
That is a safe bet.
Bone To Pick Number Four00:09:24
There you go.
And it's not just like that they were getting like puffed up by the press, right?
I mean, they really were FTX, I mean, and SBF.
They really were like throwing their weight around in the crypto space.
Like, remember back in the spring, we talked about the big explosion.
Implosion?
Explosion?
A plosion.
Neither of those are good to happen to your company.
So all good.
We'll call it a plosion of Luna and Terra.
Yes.
Right.
And the kind of chain reaction that that sent throughout the crypto space.
You know, you had BlockFi going down, Celsius froze.
There was all that kind of chaos.
SBF and specifically FTX, I mean, and Alameda, they all basically jumped in to plug up all these holes and bailed out a bunch of those companies.
Basically sort of like, you know, giving the impression that they were almost like a lender of last resort in the space, right?
Like Anthony Scaramucci.
Do you remember that guy?
The Mooch?
Yes.
You know what?
Met his son.
Did you really?
I did.
What was he like?
Met him at a rap video shoot.
What?
That's all I'm going to say about that.
All right.
Well, Scaramucci, Mucci, he compared him to JP Morgan.
He's like, you know, SBF is just like JP Morgan, you know, because JP Morgan at the turn of the century during a banking crisis like jumped in and like saved all these banks from falling and crashing the economy.
And so basically, this is a long-winded way of saying, and not even saying enough, I think.
Just really trying to drive this point home.
That people across the board, like institutional investors, like mainstream media, even the non-press.
Yeah, yeah, yeah, yeah.
The crypto people.
Like, just like normal, like everyone saw this guy.
Democratic donors, politicians, like bigwigs, everyone, like academics, like everyone saw this guy as like the legitimizing normalizing force in crypto.
If you were somebody who belongs to a group that annoys me and you had a fucking pair of lips and a mouth anytime in the past three years, you were sucking this guy's dick.
Absolutely.
100%.
So let's talk a little bit more before we get into the events of how this kind of all went down in the past couple weeks.
Week or two?
Who is Sam and where does he come from?
Thought you would never ask, my little lollipop.
I don't know where I was going with that.
Listen, baby, Sam is from one of the darkest, dankest pits of California.
A place so hideous and insane that I almost dare not speak its name until I scroll down further in the notes to where I wrote it down.
No, he is from the South Bay.
Now, I want to be clear about something here.
I don't know where that is.
I did not expect you to be the one that say that.
I've told you how I don't know where San Francisco is.
You're from San Francisco, right?
Yeah.
You're from San Francisco.
Yes.
So, you know.
Well, I know it's south of the bay.
I can't see.
For sure.
For sure.
Definitely that.
Yeah.
Do you know where San Jose is?
I have a hard time geolocating it.
We're in the mission, right?
We're standing on 16th and Mission.
We just bought a little fent.
We're trying to get back down to San Jose to sell it at a higher price.
Do some arbitrage.
Do you know which direction it is?
Yeah, you would go south.
But yeah, I want to tell, I want you.
All right.
16th and Mission.
You would take Mission all the way down past 30th and keep going.
Keep going through Daly City.
Through Daly City.
You'd probably get on the freeway at some point.
Yeah, yeah, yeah.
And you just high tail it on down.
That's where it gets mucky.
That's where it gets mucky.
So you get, you go past SFO.
Oh, for sure.
Yeah, definitely.
You go past San Francisco.
And then it's kind of windy, right?
You're thinking of Santa Cruz.
You're definitely thinking.
No, no, no, because I've never been to Santa Cruz.
What?
Yeah.
Yeah.
You've never.
Dude, we need to move on.
This is blowing my mind.
You've never been to Santa Cruz?
No.
You've never been to the Santa Cruz Beachboard walk in the warm California sun?
I don't think so.
Unless it was like as a baby.
Have you been to San Jose?
Yes.
You don't know if you have, do you?
No, I stopped there once when I was moving, like for a sandwich.
And then I think I went there once before that.
Wow.
Well, that's where Sam Bankman Freed's from.
No, he's actually not from San Jose at all.
Wow, we just did that whole confessional for nothing.
No, but he's from the South Bay.
He's from Hillsborough.
Oh, yeah.
And, you know, both of his parents.
All right, so he's got, you might have noticed, Sam Bankman, which, by the way, we know the name is ironic.
I got it.
Bankman, hyphen Freed.
So his father is Joseph Bankman.
His mother.
Joseph Bankman, also.
Joseph Bank Bankman.
Is he a suit seller?
Mother Barbara Freed.
Also, my parents' first names.
Really?
Yeah.
Not last names.
But they're both law professors at a little university that is actually where Liz and I met.
So I'm not sure how she doesn't remember, called Stanford.
So he grows up in the South Bay.
You know, he grows up under the tutelage of his parents, which is where he says he learned about rationalism, which we will get to in a moment, but that comes from his parents.
But of course, the motherfucker goes to MIT, Stanford East, as I call it, and after a stint at Jane Capital, moves back to the Bay and works for a single month at the Center for Effective Altruism.
I want to put a pin in that.
Oh, yes.
And we are doing, and I know that people, we actually don't do this that much anymore.
We are coming back to this in a moment.
Yes.
It would just disrupt the flow even more than the San Jose digression.
Yeah.
So going to San Jose is a digression.
Absolutely.
An aggression on the way to Fresno.
So according to Joseph Bankman's profile, and I'm sure other people have dug more into his parents than I have.
They've obviously got all kinds of connections, but we're not going to spend too much time on them.
We're going to spend a little bit of time, though.
Joseph Bankman's profile on the Stanford site says he's a leading scholar in the field of tax law.
He's the author of two widely used case books on the subject.
His writings on tax policy cover such topics as progressivity, consumption tax, and the role of tax in the structure of Silicon Valley startups.
He has gained wide attention for his work on how government might control the use of tax shelters and has testified before Congress and other legislative bodies on tax compliance problems posed by the cash economy.
I mean, come on.
A little on the nose there.
It's like more on the nose than your last name being Bankman.
Okay, well, now I feel like you're doing dog whistles, but so I'm just going to, let's all be, let's all, I want listeners out there, we're being charitable, okay?
We're not, we're not Sam.
We're being charitable here.
Um, Joseph Bankman, his nose has been buried deep in a barf bag on the plains on the way to the Bahamas because he has actually been helping out and working at FTX himself in an undisclosed capacity, which, as we've seen from FTX's books, is probably not very difficult to do.
Sorry, I'm drinking from a box of water.
Okay, bone to pick number five.
Okay.
Don't put water in a box.
I get it that it's more better for the environment.
This is absolutely the way to adjust transition or whatever.
Hey, but just transition.
I don't.
Yeah, I don't think it's the best slogan.
However, I gotta say, it makes me feel weird.
I don't love the box.
I don't love the box.
And I feel like it's like a weird milk carton.
It is.
And it's crazy because I grew up, obviously, you guys know, it was nymphs that mostly gave it to me off of large leaves.
Sure, if it was dew that they poured down my gullet.
And now it's like a box in a hotel room.
It's like, okay, cool.
How the money have fallen.
But so you can't have a Sam without a bankman.
And you can't have a bankman without a freed.
I'm always saying that.
Which is where Barbara comes in.
Babs.
So Barbara Freed is also a law professor at Stanford.
Imagine the sex those two had.
And according to her biography, her scholarly interests lie at the intersection.
You know my favorite word.
It's my favorite way to describe something.
Her scholarly interests lie at the intersection of law, economics, and philosophy.
She has written extensively on the questions of distributive justice in the areas of tax policy, property theory, and political theory.
Boring.
Gabe Abe And The Mind Gap00:07:32
But we'll get, she's a little less boring about her in a second.
But her sister, Linda Freed, is a doctor who serves as an advisor to the World Economic Forum.
Fantastic.
But you know what?
Barbara is more than just an egghead and a dork and a loser.
She is actually following the election of fascist Donald Trump.
She decided that America needs to be more democratic with the Big D.
So she enlisted the help of some of Silicon Valley's richest pieces of shit and started a dark money pack called Mind the Gap.
Okay.
Bone to pick number seven here.
British phrase.
Yeah, you can't go Brit on that.
British phrase.
Oh, I don't want to fall in the tube.
But it's like people are like, oh, it's so clever because everyone knows Mind the Gap, it's the tube.
But in this sense, it's actually the name of a superpower.
It's not that clever.
You know what?
Mind the pay gap.
Mind the pay gap.
So, Mind the Gap is a so-called, quote, stealth big money project that fundraised from people like Dustin Moskowitz.
Who is, by the way, now, and I believe if we have any little warriors out there, I believe this should be amended on his Wikipedia page to say, true non-reply guy.
True.
Anon reply guy.
Also, Googles Eric Schmidt, or as I call him, eating shit.
And my own personal arch nemesis.
Well, no, he's not my arch nemesis, but he's one of my nemesis.
London Breeds money man Ron Conway, the pig himself.
They funded various Democratic Party projects.
They bragged about winning.
So their whole thing with Mind the Gap was they were data-driven, which I'm going to be real.
Okay, that's another red flag.
It's all, oh, we hate the data drivers.
We hate the data drivers.
As a non-driver, get me the fuck away from your data.
I would like to drive over you.
I would like, call me, yeah, okay, not going to make the reference I was going to make, but it was a reference to European terrorist attacks.
I will believe me.
Anyways, so their whole thing is they're data-driven, which I'm going to be real.
They're all what do you think political campaigns do, dude?
Yes.
They're all data-driven.
No, everyone else is just like, well, in my mind, it seems like this is how you do stuff.
They won 10 out of 20 of their races.
Well, that's not some great data.
If you want to do the math, you're going to have to get some faulty data on that motherfucker.
Not so great.
Due to their quote, Moneyball-style political outlook and roster of stats, guys.
Yeah, okay.
All these people who like Moneyball, they didn't win.
I never saw it.
All right.
No, it's real life.
I didn't see the games either.
They call me Moneyball too, because I fucking got just pure pennies in there.
All right.
Well, jingling and jangling when I strut my stuff.
But Dustin Moskowitz, well, by the way, he confirmed to me that he is a donor to Mind the Gap because he is not actually listed as far as I could find.
I didn't look very hard, but he wasn't listed on their open secrets.
Dustin Moskowitz also funded the Future Forward, which is a $150 million super PAC alongside Sam Bankman Freed and other Silicon Valley types.
Future Forward often combined their efforts with Mind the Gap.
As far as I can know, Sam Bankman Freed did not donate to his own beautiful mother's super PAC, but instead to this one.
And so Future Forward seems to also fund a very opaque group called Open Labs.
I hate these names so much.
Well, Open Labs employs Sam Bankman Freed's brother, Gabe Bankman-Fried.
Gabe Abey?
Gabe Abey?
Hi, Gabe Abe.
Actually, I'll be so interrupting myself here.
Saw the thing that gave me the idea for Gabe Abe yesterday.
What was it?
The store in Echo Park.
That's like Gabe Baby or something.
And every time I see it, I'd think Gabe Baby.
But anyways, so Open Labs employs Sam Bankman Freed's brother, Gabe Bank and Freed.
Gabe also works for the Protect Our Future Pact, a, quote, pandemic prevention pack, which got a puff piece written about it today.
And one of those.
Did you see the Washington Post piece?
Was it the Washington Post, maybe?
I didn't read it, but I was like, I get it.
That gave the new Gen Z Congress member, Maxwell Frost, I think almost the, I think they were the largest individual dumber donor.
Amber Frost's brother.
Amber Frost's brother.
Yes, Maxwell Frost.
So Open Labs also seems to employ Democratic strategist and quote another data guy, David Shore.
You love him.
David Shore.
I tell you what, wish that guy's body would wash up on a shore one day.
No, but for real, though, his, it's very difficult to find out who actually pays David Shore any money.
Yes.
Because he's a progressive and who the fuck would give any of those losers any money?
But no, David Shore appears to work for Blue Rose Strategies, I think it's called.
Basically, he works for Blue Rose.
Blue Rose.
Is that a David Lynch reference?
It's likely some, I don't know, probably, I assume it's got something to do with like progressive Bernie stuff.
The Blue Rose case is, yeah.
My man knows.
He knows.
Well, anyways, he also seems to work for Open Labs, which is, of course, funded almost entirely by these Silicon Valley type people.
So that's your progressive, ladies and gentlemen.
A lot of people might know David Shore from a very specific New York Times party piece.
I hesitate to call it a party piece because that did not sound like a party to me.
That sounded like, Liz, you're mistaken.
Parties don't have to be fun or good.
No, David Shore, there is an excruciating read.
It is an excruciating read about a party that David Shore had.
And I remember reading it.
And, you know, I'm going to be honest with you, I'm a fucking Maoist.
You know, I'm not following these goofballs hither and thither, right?
These guys, eventually, there's a graveyard for everybody, you know?
Totally.
And it sounded corny.
It's like what they were like describing.
It's like, it's an aloft and it's got a neon sign that has the handwriting that sound, you know, has like a like power of the.
No, they had like a candy dungeon.
It's just, it just seems like one of those things.
My thing is, if you just started getting laid when you're like 28, that fucks your brain up big time.
Here's my thing.
If you're an adult, don't act like a baby.
Don't act like a baby.
And also, don't be inviting the journalist to the party.
Yeah.
Never.
True and all.
No, we're going to get into it.
Do not invite the journalists to the party.
In fact, don't talk to any journalist.
Don't talk to journalists.
Ever.
Ever.
Unless you're Sam Bankman Fried and you consider me, who is, of course, merely a comedian, a journalist, in which case you should.
But so the excruciating fucking New York Times profile on David Shore's party, David Shore, who of course is working for basically Sam Bankman Fried and his close good friend Dustin Moscovitz, who of course funds Sam Bankman Fried's mother's super PAC.
This guy, Party Piece, and I was reading it and it was talking about all these people that were there that belong to something called the effective altruism.
Okay.
Pause.
Not in that way.
Effective Altruism's Dark Side00:09:56
Okay.
Because that, I mean, I will say if you read the article, that does actually kind of work for that.
Prison, can you say a little bit about effective altruism?
Absolutely.
I want listeners here to imagine possibly the most annoying guy they've ever met in their life.
He's in your head, right?
Well, let's say, no, let me actually, let me rephrase that a little bit.
So you know how, sometimes you see like tech CEOs or like, you know, programmers and stuff, and they seem to view the world in a way that is just totally incomprehensible to somebody with like a heart that feels and like a soul that like yearns to be free and love and you know, and blood that bleeds.
Exactly I well basically, what i'm talking about here is people that might be neurodiatypical in in a certain way.
Right uh, there is a, there is a sort of a a, a philosophy, philosophy that many of these people follow that comes from by it's, comes from technically comes from Peter Singer, but via basically, a guy named William Mccaskill who is one of, I guess, Singer's acolytes.
And while they gussy all this stuff up in a lot of nonsense um, it essentially means that if you're willing to put your money somewhere where the data says it will be used most effectively to save the most and this is where it gets kind of unquantifiable, although they do try to quantify it to save the most of something right, whether it's like uh, fish in the ocean or like children in Bangladesh, something if you're,
if you have calculated like the best way to do that, to make the, to do the most good to make the most impact on the world is to make as much money as possible, then that is basically uh, the route that you should go right.
So it it's.
It sort of presents Itself as, like this, really rational sort of altruism, right?
And in fact, it did come out of, and we're going to do an episode on this, the rationalist movement, which is basically sort of the Nazi movement for the 21st century, I would say.
It is, it is, there's some, there's some heavy echoes there, but it is basically it's like an updated kind of, it's, it's, it's the new, it's the newest sort of iteration of the California ideology, sort of this like Silicon Valley supremacy of all of these like programmers and tech workers who view the world through this quote really rationalist lens.
It's very utilitarian.
I mean, yeah, I was going to say it's like a very, I mean, vulgar utilitarianism, which is already itself very vulgar.
Listen, I'm talking one of the least utilitarian men in the world.
But it like it leads you to holding positions where basically like it makes like it's against the like it's a net negative on society then to be an individual who simply eats chicken, whereas it's a net positive as a CFO at Goldman Sachs or Raytheon, so long as you are, you know, basically accruing funds to then put forward towards whatever,
whatever your net positive event or charity or program, you've calculated that you've offset all of these other things.
I mean, it's just literally bullshit.
I'm sorry.
It's total bullshit.
Like everything else.
It's fucking bullshit.
Everything else.
Just like everything else in this story, it's made up monopoly math.
It's not only made up monopoly math, it's also done by people who, when you actually read their words or hear them speak, are fucking sociopaths.
And this is not some like fringe ideology out there.
I mean, you got everybody from Peter Thiel to fucking Elon Musk, all these people speaking at their conferences.
I guess those are just two people who work together at PayPal.
But like, this is a pretty widespread thing.
They're not friends.
Well, yeah.
But they could, they could make up for it.
They're friends.
Thiel wanted him to buy Twitter, actually.
I would say, yeah, maybe to tank Twitter.
So then, well, there's a long.
Yeah.
Anyways, this podcast is now on Rumble.
But we, no, but for, like, it's, it's, effective altruism is just like this, like, it's, it's really in vogue among a lot of people, or possibly was until this week, among a lot of people with money, because one of the central tenets of it is if it gives you this sort of this like moral back door to be selfish, right?
And so, like, you know, if you read articles from it, it's like, okay, about it.
All those kind of defenses of it is like, okay, well, I became a hedge fund manager so that I could earn as much money so that I could give as much as possible so I could give as much money as I can to the causes that I have determined using data will do the most good.
So it's actually the most moral position for me to take to become a hedge fund manager, to work in an oil company, to run one of the largest Ponzi schemes in human history.
Totally.
There's these concepts that EAers they call themselves use.
And this is, to be clear, like the rationalist movement that gave birth to effective altruism is the same movement that gave birth to fascist like fucking Menchus Moldbuck, right?
Yeah, I mean, also, like, you know, entire industries, like the banking industry or tech industries, or, you know, even you mentioned the oil industries, like these big firms have carved out new positions for these kinds of people so that they have these like entire verticals that are basically like,
look, I think that ESG, you know, has been perverted, was perverted from its like intentions a long, like for a long fucking time.
Yeah.
But this has like put that those kind of like the perverting power of ESG on like overdrive, right?
And so it's carved out positions in companies for like, you know, calculating, I don't know, like donation, not just donations and philanthropic stuff, but like actual business decisions, which has then kind of itself like like put the EA movement like has like sped up the movement, right?
Because now these people have positions that they can find in companies, right?
And it's this sort of like, I don't know, self-fulfilling prophecy, if that makes sense.
Yeah, well, a big thing in these is earn to give.
Yeah.
And so you want to basically like you're working so that you can give money away.
And like several people who work at FTX, or at least one person worked at FTX, had worked at Facebook previously and was like giving away 50% of his income.
Another big, and that also is, of course, an excuse to like get take these higher and higher profile jobs and more well-paying jobs, usually in some pretty scummy industries, right?
So that, I mean, because, you know, Facebook, all these places are just stealing your soul and your data.
But like, well, you're kind of just like laundering profits into other kind of shell entities.
I mean, everyone knows.
And another thing is long-termism, right?
Where they make these very coldly calculated rational decisions.
We're like, and this is where you got almost, not to use LaRoucheite term, but like you sort of get this Malthusian or this like eugenicist mindset between behind a lot of these people where like they're actually the only people who are truly looking out for the long-term survivability of the human race and of the planet.
And so that's a book that about long-termism that's like fucking huge right now.
Have you seen that?
That's like a future to win or something like that.
No, I'll be honest with you.
I'm reading beautiful novels.
No, I know, but you would just see it.
I mean, it's like a very, it's like a huge Brace Belden's Guide to Having Sex for More Than Seven Minutes.
No.
Definitely not long-termism.
That's super long, but okay.
But yeah, and so, I mean, all of it boils down to all these fancy words, all these websites they have, all of it boils down to both it's okay for me to do whatever I want as long as I have calculated it in whatever twisted fucking evil devil math that I've done to make sure that it's actually okay because I'm helping the world.
And it's all super individualistic because these people, like, it is a fucking cult is what it is.
Well, and it just like, I mean, you want to talk about things that intersect at, you love that term.
It reminds me so much of all, we talk about this all the time, like main character syndrome, right?
Yeah.
Or this like, you know, growing kind of insane nihilistic narcissism and the way that it's sort of like explained away with these obtuse theories.
And it's the same exact shit.
You know what I'm saying?
Well, SBF here, and we'll get to this sort of as we move down the story in a more linear fashion.
But SBF is, has sort of, in the past week, really laid bare what these people actually, like, they've sort of been exposed by this, right?
And he's actually laid bare, like, that they really do believe it's okay for them to do anything to anyone as long as it fulfills like their weird self-justifying, self-rationalizing ideology.
Yeah.
I have a question.
This is going to be an unpopular question.
But you know what?
I don't care because last week we talked on, we said the weed was too crazy.
So I'm going to just fucking go for it.
Uh-huh.
It is.
Do you think that does, okay, so you grew up playing video games?
Kind of.
I got 30 minutes of screen time a day.
We did have you going with this.
No.
Okay.
My man, you know where I'm going with this.
I think that some of the kind of cold calculating logic is not too dissimilar from the kind of like logic pathways of a kid playing video games who thinks that there are no consequences.
Yeah.
Kids and Bin Maxing Logic00:03:36
You know?
Bin maxing.
What's it called?
I call it bin maxing.
It's like when you're trying to your character attributes in like a fallout type role-playing game and you're trying to like get all the numbers in your favor and like minimize the negative ones and maximize all the positive ones and you go on the forums and you're comparing notes with everybody and you're trying to figure out like how you can optimize your game and your character.
Yeah, I mean, I called these people like sort of tongue-in-cheek earlier, like neuro-atypical people.
But like what it really is, and I do mean, I'm not even really actually saying that as like a shorthand for autistic or anything.
Like I think what like these people are, and like many of these rationalist Silicon Valley type people are, is that they do have this sort of outlook where they view things in the way that like computers view them, right?
But I think that that's like, these are all people who grew up gaming.
Like I really don't think like, I don't know.
Yeah, yeah, yeah.
I mean, I think that if you're a man of a certain age who grew up like with all this stuff and this is how you've kind of learned to make choices.
Yeah.
And especially in these worlds where like the like actual consequences have been completely and totally dumbed down, right?
Because that's the whole thing.
What's it called?
Is it called nerfing?
Nerfing is when, well, that's when they make an item worse, I think.
Right.
But it's like, it's like, um.
You know, these, the, the games are all marketed towards kids, right?
And so they're not going to make them, I mean, but like, you know, right first, let's say we're talking about like 40 year olds, right?
Yeah.
Okay.
They're all marketed towards kids at that time where like they're not going to make games like where that are going to make kids like have complete and total meltdowns if they lose, right?
Where they're suddenly they've lost something that is like so consequential and they're learning actual like real life consequences to actions, right?
You know what I'm saying?
And so what happens in these games and the consequences from doing stuff is like completely and totally minimized for those reasons, right?
Yeah.
And so kids are learning because you do learn through these games, like, you know, especially as they're interactive, it's completely different that choices don't have consequences and not don't have consequences, but don't have the same consequences that maybe they do in the real world.
Right.
I think what you're saying here, though, can be like, can be actually fully like ballooned out to really looking at how people use screens on the internet in general.
Yeah.
And that like, you know, if I, if I'm, if I'm on fucking Twitter, right?
And there's some like lady who's like, look at my baby and the baby, you know, maybe the baby's a little ugly.
And I'm like, your baby looks like your baby looks like Gay Frodo.
I don't know what to tell you, lady.
And it should die.
Like that to me, like, I mean, a lot of these kids, this is another thing.
I mean, and this has been, you know, this has been said a million times, but like a lot of people grew up like using 4chan or like those forums and stuff like that.
Where like your whole thing on the internet was kind of saying these horrible, awful things to people.
And then just kind of clicking enter and like, you know, maybe you get a little dopamine rush when you see that they got pissed off or something.
But like there's nothing, you don't actually see any consequences for your actions.
Right.
And that's why like when you're growing up, it's like the really the thing that people would do is like, you know, the classic like, um, hey, like Evan can't log in anymore.
This is his mother.
Evan, Evan died to like try to make people feel bad.
Like that was how you would try to make people feel bad on the internet.
I never did that, obviously, but you'd see that happen.
And it's like, there's no way to impart the fact that there's real world consequences.
Line Leak Casino00:15:57
And so that's why you see like, you know, like the swatting and stuff like that.
People do these things that have like really like harmful, awful effects on people in the real world, but there's nothing to actually like show you that that's happening.
And there's nothing to give you any actual emotional touch from them.
It is, it is, it's the computer logic.
It's more computer logic.
Yeah.
And I guess what I would add too is like, I'm not suggesting that video games have taught a bunch of people, like have like changed their brains and like they've learned different.
But when you've got a bunch of people who've grown up and kind of like understanding the logic of games as having that like internal kind of logic, you know, world logic or whatever, right?
That when you have kind of an internet and also now a kind of like stock market and this new crypto stuff, right?
That has been purely gamified to like all ends of the earth, right?
That, and that these people are looking in the crypto space and betting around like this as if it was a video game, that I really question whether or not someone like SBF actually understands that they're fucking around with other people's money and that that has real life consequences that exist outside of the world of the video game that he's playing.
Yeah.
Well, I think that's a fantastic segue to him fucking around with other people's money.
So before we get into what happened starting just a mere week and a half ago, I want to say that one of the big things about SPF is that, like we mentioned.
he was a big fixture kind of in DC through his parents.
Obviously, he had a lot of connections, but also like we said, because all these people viewed him as this kind of like legitimate real crypto guy, right?
Over the summer, a bunch of crypto people basically accused him of helping shape legislation that would be insanely favorable to FTX.
Yeah.
And this is like an important thing to keep in mind as we move through this story.
So there, you know, there's been all this talk since Blue Pill Biden got into office of like, well, you need to regulate crypto and blah, Yeah.
And, you know, basically people are accusing SPF of kind of being involved in some of those high-level discussions with people like Gary Gensler, with people in Congress, of like how they could shape, you know, certain regulations that would be forthcoming that would basically centralize crypto in a way that a lot of, you know, DeFi people, as they like to be called, wouldn't like.
That's decentralized finance.
Yes.
You know, the thing about FTX is that it's like he wanted everything, he wanted FTX to be like an everything exchange.
Yeah.
You could, he's like, he has this like dumbass quote where he's like, you could buy a banana on FTX.
It's like, why would you do that?
Oh my God.
I could buy a banana?
What could it be worth?
0.000003 Bitcoin?
I mean, but let me just tell you, that would help me in yelling out.
No, but he really wanted it to be like the exchange.
Like the idea really was that FTX would be like the Amazon of crypto, right?
Love the idea.
Yeah.
Well, so basically all of these people were like, okay, he's trying to basically make a regulatory monopoly.
And anyone who's been paying attention to the success of Amazon or the chaos at Uber knows what that looks like and why companies go after that.
Well, especially if they're bleeding money.
Well, yes, 100%.
But like that, this is also why like a lot of his donations have gotten a lot of attention, right?
Yes.
Like, you know, backtracking a little bit, he was the second biggest individual donor to the Biden campaign, $5 million.
Yes.
I think he pledged a billion to help Democrats in future elections.
Let's just say.
Whoops, let's walk it back.
He did say like, I shouldn't have said that, which is really funny.
And he just gave, I think, 40 million that we know of.
But then like multiple other people in his company gave, you know, tens of millions of dollars to Democrats.
And then, of course, $25 million to the Republicans as well.
But a lot of this focused on, except for his, you know, long-termism, protect whatever, the fucking pandemic shit.
A lot of that does is going towards basically lobbying people for crypto stuff.
Totally.
SPF responded to a bunch of this DeFi criticism with a blog post called, quote, possible digital asset industry standards.
And this just pissed everyone off.
Yeah.
You know, I think people probably know this, but the crypto community is like full of basically a shit ton of libertarians who still have this idea that like they're going to change the world or whatever and don't want crypto to become just like the banking industry, but for computers, like, which is what someone like Sam Bigman Freed does want it to be because that's how you make money, right?
Decentralization is, it's, you know, for all the, you know, look, I'm not going to get into my own personal feelings about it, but I'll say it's very difficult to extract profits at scale in a decentralized economy.
And there are really two types of crypto guys, right?
There are people who are in it basically solely for the money, like SBF, and I would say probably the majority of crypto users.
And then there are the people who are like, and of course, a lot of those are libertarians, but then there are the people who are sort of like the, let's say, less mainstream libertarian types who like actually are in it like ideologically.
And like all those people are, of course, they're all scammers, right?
But like they're the people who like believe in it as a project, as like a liberatory project.
God, that must feel really good because it's probably, you know, it feels good to be like a dumb guy.
But like, it's, that's depressing.
Absolutely.
So it's good to remember that basically, walking into this whole boondoggle, that I would say more than half I would say 75 of the crypto community was really pissed at SBF yeah, okay.
So this is how this all went down, on november 2nd, a leaked balance sheet.
Don't want that to happen.
Here's a new, here's a true.
And on tip, don't leak your balance sheet, Don't let anyone leak your balance sheet.
Don't leak.
Do not leak my balance sheet.
A leaked balance sheet from Alameda Research made its way to Coindesk.
Yes!
It did come across my desk.
I saw it, my.
My.
That's me with my claws on my desk because it came across.
And yeah, yeah, I saw it, Liz.
So Coindesk put out an exclusive.
Saying.
Are we exclusive now?
Basically saying, let's say there were some irregularities on the balance sheet.
That's what you want to call it.
I call it pansexual.
So everyone knows.
I want to say that even though this was never said out loud in the mainstream press, for whatever fucking reason, because, well, ding, ding, ding, because all journalists are fucking scumbag, loser, liar, baby bitches.
We hate you.
Everyone knew, wink, wink, nudge, nudge, that the line between Alameda and FTX was blurred.
There was no line.
I know, but for some reason, in the like respectable media press and even in the non-respectable media press, everyone was like, these are two different companies.
Here's my thing.
Sequoia Capital, when you sent your little cocksucking fucking mutant out there to do that fucking week-long profile on fucking Sam Bankman Freed and you go to his Bahamas mansion, do you not realize that in his 10-person polycule mansion, like half of those motherfuckers are working for Alameda Research?
I mean, you're in the same office, Bill.
What are you looking at here, brother?
He had to have been wasted.
Yeah, yeah.
I probably drunk off my ties.
Yeah, he was probably polying it up too.
They've enticed him with those Alameda wenches.
Okay.
So don't do it again.
But I'm going to say Coindesk puts out this balance sheet.
The balance sheet basically says that Alameda and FTX were 100% not separate entities.
Yes.
Many gasps are heard across the crypto space when this comes out.
Yeah, it appears too that like, um, because Alameda was founded before FTX, that like literally a lot of like if you were sending money to FTX sometimes, if you actually looked at where it went, it was going to Alameda.
Yes.
So before we get to that, we got to talk about tokens.
And I'm so sorry.
I'm going to try and do this as quick as I can because I find this shit so fucking annoying and stupid.
So you're standing in front of Time Crisis 2 and you have four quarters.
No.
You're trying to put them in.
It's like, no, Chuck E. Cheese money only.
Okay.
FTT.
This is so annoying.
I hate this so much.
I'm sorry.
FTT is a token issued by FTX.
Stands for the Fabulous Toes of Twinks.
Yes.
It offers customers discounts on trading fees or whatever when they use it on FTX.
Yes.
So FTX has their own money.
Well, it's not money in it's a token.
It's a token.
Yeah.
FTX has its own token.
Called FTT.
I want to say I hate crypto for a lot of reasons, but mostly it's because the names are so fucking annoying.
And FTX and FTT just like annoy me so much.
You don't like Solana?
Oh my God.
Solana?
So FTX issues FTT, right?
But here's the thing: they actually occasionally buy back FTT using their own profits.
So do you remember back to the good old days of 2020 when people like Bernard Sanders would be like, we're going to stop.
Wait, I can't do Bernie Sanders voice.
No, no, try it though.
Oh, I can't do it.
We've got to stop doing it.
I don't know what you want me to say.
But, you know, no, you know, everyone was like getting so mad at like Apple.
They're like, Apple is just taking its profits and buying its stocks back.
We've got to stop stocks.
Yeah, stock buybacks.
Right, right, right.
And basically, when they do that, they juice the price of their own stock.
Right.
So, like, when there's the more Apple profits there are, the higher the Apple price goes, not because of the profits, but because, like, not because people in the market are technically responding and buying more stock, but because the company itself is buying back stock, which is juicing the price.
Yeah.
Okay.
FTX does that, but with FTT.
Okay.
But none of, I just want to be, this is so annoying, but it's important to understand.
For sure.
FTT is not a stock.
It's a token.
It's a token.
A token is not a stock.
But that token, the price of that token in fiat money terms goes up and down, right?
Like a stock would.
Yes, but it's fake.
A token is fake money.
Yes.
It is monopoly money.
This we agree.
Yes.
So FTX creates FTT.
And it's technically, again, technically, unaffiliated trading desk Alameda buys those FTTs at a super low price.
Okay.
FTX, the exchange, then uses its own profits to buy back, pumping the price of FTT.
Then Alameda, again, technically completely unaffiliated, posts back FTT to FTX as collateral, taking real customer deposits from FTX in exchange as assets.
I'll be real with you.
I did sort of tune out halfway through that.
But no, so what they're doing is they're moving their own funky monkey, money, funky money around.
Yes.
That is not worth anything, but it's basically they're treating it as it's worth money.
Yes.
And so they're basically what you're saying here is they're printing their own money.
Yes.
So, and I want to just like remind you, can you do that?
That FTX is in the derivatives game, right?
And so they're offering leverage, 20 to 1, sometimes 101 to 1, allegedly.
And customers can post FTT, the token, to buy Bitcoin leveraged up or whatever other crypto product they want.
So wait, this is like, okay, I'm trying to make this analogy make sense.
I'm a casino, right?
Morongo.
And people are coming into the casino and I'm letting them basically like use the house money to gamble, but I don't actually have any money behind the little jail money on.
I don't actually, there's not like a lot of money back there.
No.
Because I myself, I'm also an inveterate gambler.
You might just have more token chips back there.
Yeah, but I don't have, I just have more chips.
Yeah.
Because I'm exchanging chips for chips.
Because all the money that people are giving me, I'm giving to the business that's directly next door to me that I also work at and own, that all my friends also work at and own, that is itself not a casino, but just one guy that goes and gambles.
Yes.
I'm going to actually, Matt Levine has a good quote here, although I do have something negative to say about him if we get to it.
But that was very diplomatic.
This is maybe a better analogy.
He says, if you think of a token as more or less a stock, okay.
Okay.
And you think of the crypto exchange as a securities broker dealer, right?
This is completely insane.
If you go to an investment bank and say, lend me $1 billion and I will post $2 billion of your own stock as collateral, you are messing with very dark magic and they will say no.
Yeah.
Because that would be insane.
No one would agree to that.
Yeah.
And yet, here we are.
Because this is what happened.
Right.
And so the question is, what did go wrong?
Well, basically, everything went wrong.
Yeah, I love that.
Now, remember how a lot of crypto people were pissed at SVF, right?
For potentially working with the government to centralize DeFi.
Quote, it's fascinating to see that the majority of the net equity in the Alameda business is actually FTX's own centrally controlled and printed out of thin air token.
So, when the CoinDesk Don't Do It Peace dropped, it caused a bit of a stir.
Some people began withdrawing assets from FTX, some people weren't paying attention.
But withdrawing assets from FTX, remember, that entails the selling of FTT, right?
Because you're holding, when you put assets into FTX, you get a token, you use that token on the exchange, et cetera, et cetera, right?
Alameda CEO Caroline Ellison, which, oh boy, there will be more on her in a bit.
Yes.
She tried to stop some of all this by saying that the balance sheet was fake news, which, you know, you gave it the good old.
You tried.
Non-Binding Letters Matter00:12:04
You got to say it's fake news.
Here's a true and on tip.
Just, you know what?
When it comes out, and it will come out, and you know it's, you know what I'm talking about.
If you're listening, you know what I'm talking about.
Everyone has it.
Everyone has one.
And when that comes out, your first line of defense, always be like, that's fake.
Second line, you were hacked.
Second, which, by the way, they do that.
They do also do that.
Third line, just be like, it was all a fucking farce.
I don't believe in anything.
Fourth line, no sap apology.
Fifth line, and this is actually where fucking SBF and FTX fucked up.
Pick up my call.
Yeah.
Pick up my call.
Okay.
So at this point in the story, one of SPF's enemies, and you know what?
I'm going to say true and ons as well.
CZ.
Sleazy CZ.
Sleazy CZ, aka the CEO of Binance, one of my most hated crypto names.
Oh, yeah.
Well, first of all, I'm CEO of Panance.
You guys are real so pissed that I figured out what pansexual is.
Okay, CZ enters this story now.
Now, I'm going to say this: no one knows where Binance is headquartered.
No, it's literally no one knows where it's headquartered.
And he's like an international fugitive.
Yeah, this shit is crazy.
I mean, also, Binance is basically the main competitor of FTX.
It is a huge, huge, huge fucking exchange.
Huge.
Huge.
And again, headquartered nowhere.
Or somewhere.
Or everywhere.
Okay, so this at the, you know, right about when all the balance sheet broke, CZ tweeted, due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books.
Boom.
Power move.
You got to give it to him.
So that was about in total $530 million.
So when he tweeted that, basically the floods came.
The price of FTT fell below $22.
People started withdrawing more and more and more.
And basically what you would call a bank run ensued.
Pretty much classical, classic.
Absolutely classico-style bank run.
Digital money bags in people's hands, scrambling, jumping over.
Hop, hop over the Uberville's left and right.
SBF later said that withdrawals hit $6 billion in 72 hours, which you don't want that.
That's fucking crazy.
On November 8th, withdrawals just stopped from FTX.
You could no longer withdraw.
And at this point, SBF just shut the fuck up and no one knew where he was.
No one had heard anything from him.
And it seemed that the music had stopped.
So my thing is this: before we kind of get to this next part, that bank run and then like the eventual withdrawals stopping and like the liquidity, a wet market turning dry, that is going to happen eventually to all of these, unless they somehow get some state back, whatever.
But I still think, like, Binance is, by the way, the same as FTX.
So just to let you guys know that.
At this point in the story, Binance announces in a non-binding letter, which true and on tip, always put your, make your letter non-binding.
Always make the letter non-binding.
Got to make the letter non-binding.
No, we can't buy in the letter.
Binance says they're going to buy FTX.
Such a, everyone's like, oh, crazy.
SBF takes to Twitter and starts an announcement with the classic, hey all.
Hey all.
Which, what were we calling it?
Red flag or what was it?
Bone to pick.
Oh, bone to pick.
Number whatever.
Don't start things with hey all colon.
You know what it is?
Yeah, not hey all colon.
Hey y'all comrades.
Yeah.
That's how we started.
Semi-colon.
Hey, y'all.
And proof that you don't care about.
Oh, you did a colon.
He did a straight colon, like a butt?
Yeah, he said, hey, all colon.
I have a few announcements to make.
Don't make announcements.
Don't make announcements.
No, you're milking the colon.
So CZ said that FTX had a, quote, significant liquidity crunch.
Here's the thing.
No, it didn't.
Okay.
They were completely insolvent, which is different.
It's different than a liquidity crunch.
Well, like, and I want to just explain this real quick.
Let's say you have a balance sheet and it's all basically fake money.
Yeah.
Okay.
Everyone in the world realizes at the same time, it's all fake.
Yeah.
In fact, let's just say it's all magic beans in the classic, classico way.
Okay.
Your magic bean is now approaching the very bad price of zero dollars very quickly.
We're going to add to that that you gave away all of your customer deposits to your trading desk to do a bunch of derivatives, woo-woo magic stuff.
And in return, they gave you more magic beans.
And now suddenly, all your customers whose money you took are asking for their money back.
And all you've got are a bunch of beans.
And you can't turn them into real cash because it turns out nobody wants to buy fucking beans.
And now you're basically worth zero.
And you've got a million billion customers demanding cash.
And all you've got are these fucking beans.
That means you're insolvent.
She just rapped.
That means you don't have any money.
You don't have any.
You have fucking beans.
You know what?
You're a bean boy.
You're a broke ass.
You're a bead boy.
You're a peanuts.
It's not peanuts.
It's beans.
Well, here's the thing, though, Liz.
Actually, with the whole point of the magic bean story is that if you actually plant them, you can go to beanstock.
Regardless, Binance pulls out of the deal.
They said, as a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we've decided we will not pursue the potential acquisition.
Yeah, FTX, Alameda, they've now filed for bankruptcy.
SBF, for a while, no one knew where he was.
Nashad, Gary, Caroline, Ellison, basically his little war room.
Seems they're all in the Bahamas.
Yes, they all live together in like a, I think, what is it, $40 million, $60 million?
I think $40 million in the Bahamas.
And again, like, we're not going to, you know, there's not enough information on this.
We do have some information.
We don't have enough information to really go into it.
But it does appear that many of these people, if not all of these people, were dating each other.
Yes, this is a sort of a bit of a twist on the classic Tuzian poly crisis.
Yes.
Yeah.
Yeah.
In fact, it's a Koozian poly crisis.
Oh, my God.
Yeah, no, this is, I mean, listen, polycules are big in the rationalist NEA spaces.
I'm saying spaces now.
And it should be no surprise that they are big here as well.
But all these people, I mean, there was all these rumors that they're fleeing to Argentina, that they were fleeing to Dubai.
I am predicting that maybe one or two will fly the coupe, but the rest of them are probably, I mean, these people are fucking nerds.
I think they're scared.
As they should be.
They stole a bunch of fucking money.
Yes.
So this is the thing, and I promise this is, I, you know, this is the last, well, I don't know if it's the last I'll say on this, but I just want to say this.
Like, the main message coming out of the trad press on this, and by that I mean Bloomberg, Washington Post, New York Times, all those fucking people, right?
Is that this is a story about leverage issues and tokens and bad math and that SBF is some kind of like misunderstood, nerdy, romantic.
He's out of his league, but he's do-gooder.
Like, he tried, and oh, he just like, oh, all the leverage and the crazy math got away from him.
So, blah, blah, blah.
No, like, that's not what seems happened, right?
Like, what it seems is this dude stole a bunch of fucking money to increasingly fund or like to fund his like increasingly deranged and methamphetamine like fueled just regular amphetamine.
Okay, interesting.
Um, but drug-fueled gambling problem that he had gotten himself in at Alameda, and that they had made a series of really, really fucking stupid bets that they were in a huge hole for.
And that rather than kind of liquidating and getting out of it, they stole a bunch of customer funds.
The most like cynical version of this is that they actually set up FTX to do that to provide funds to Alameda to make increasingly deranged bets to try to get themselves out of a hole.
Again, I'm going to say it in gamer mode, thinking that there's no fucking consequences outside of whatever little game that they're playing.
Well, that balance sheet shows us.
Like, these people, I mean, this is unsealed at XL.
Yes.
So, yeah, I mean, so FTX's or Alameda's, I can't remember which it was.
It doesn't fucking matter.
Their balance sheet.
This is separate from the thing that ended up at CoinDesk.
Yeah.
It got leaked to the FT.
This is their balance sheet from bankruptcy filing.
That's Financial Times.
That's not, it doesn't have to do with the token.
Yes.
Yeah.
Financial Times.
The pink paper.
That's all.
But anyway, I don't know if you can call it a balance sheet.
Like, it is an Excel document, like you mentioned, with just random shit typed into it, including close to $9 billion in liabilities while only having about 900 million in liquid assets, almost half of which, by the way, are listed as Robinhood stock.
Yeah.
So, like, what the fuck?
I mean, the best part of it, there's so many good parts of it.
And I encourage you all to look it up because it's really, it's shocking.
You think, wait, you're like, wait, but I'm, this is like how my fucking funky dumbass would run a company.
Yes.
Yes, it is.
These people are more disorganized than me.
It's shocking.
There is a column marked, quote, hidden, poorly, internally labeled, quote, fiat ampersand account with next to it, negative $8 billion amount attached, followed by withdrawals on Sunday column totaling $5 billion.
And then it's followed beneath this.
I swear to God, guys, this is so fucking true.
It's basically a typed out note that says, There are many things I wish I could do differently than I did, but the largest are represented by these two things: the poorly labeled internal bank-related account and the size of customer withdrawals during a run on the bank.
Oh, yeah.
True non-tip.
That's not the balance sheet.
I can tell you, I can tell you precisely what happened there, baby.
Wow.
Precisely.
That is Sam Bankman Freed, who probably leaked that himself almost entirely because he has made some allusions to leaking in his later interview with the box reporter.
He is trying, he is like, I know this message will be read.
And so his whole thing is like, now this Sam Bankman Freed has, in two interviews, at least, post-facto interviews at this point, been like, there are many decisions I wish I had made differently.
Or like, all this is a compounding of like several poor decisions that I did not know were related to each other.
Like, that is Sam Bankman Freed.
Like, that is the message he is trying to convey there.
Like, he is like, and it's, it's, it's pathetic.
It's fully pathetic.
Like, let me talk about this fucking cat for a second.
Carolyn Ellison's Shaking Tumblers00:02:05
Let me talk about a couple of these people for a second, right?
You're talking about Alameda Research, right?
And there's been a lot of attention on this broadband fucking CEO, Carolyn Ellison.
And obviously, like, we, you know, we, we, we do know some things about her.
Her tumblers, her pair of tumblers, which you're an adult woman, baby.
Her pair of tumblers were leaked.
I, I read one of them.
I read both of them in great detail, but I read one almost all the way through.
You know, obviously we were talking about, we've got, she's talking about how mentioning multiple times, you can sort of see her descent from somebody who was like, she met SBF at Jane.
You know, they were in the EA movement together.
You know, they dated at some point or some points.
You see her sort of go from somebody who had been, as she calls it, trad in her past, which as we were talking about before we started recording, I think a lot of people literally trad means to them is that you have a monogamous relationship.
Or you're one of those things.
On Wednesdays, you cook chicken.
Exactly.
Like, oh, you go to the movies together.
But of course, she becomes sort of this, like, you can see her sort of justifying this polycule, whatever bullshit, and like, you know, talk about harems and kind of getting into this, like, this whole rationalist mode.
And like, you know, she's like reading Liz Brunig, which is funny, but I don't know what, what, how she refers to her in that.
I think she liked her, which was funny.
It's just funny to see.
Yeah.
Yeah, exactly.
And then like, you know, all these other, like, these, like, there's a lot of like self-help love books that she's reading.
She's obviously like very unhappy being in a polycule.
But at the same time, like many traders and many people in tech, she's also, it appears, taking increasing amounts of amphetamine.
And amphetamines have a pretty important part of this story.
Any real taped interview you can see with SBF in the past few years, the guy is shaking like a fucking, I don't know what, like a, like a Hatachi.
He's going, he's, he is fucking, he is, he is vibrating.
And like, there's some, some interviews where it's super motherfucking egregious.
Liquidity Scam Revelations00:06:22
Like the guy looks like he's about to jump out of his skin.
I am somebody who has injected a lot of methamphetamine almost every day for about a year and a half.
And thankfully, not any further than that.
I'm going to tell you, some of the worst decisions, in fact, if you do any kind of amphetamine off, almost all of the worst decisions of your life will be made on that drug.
And a lot of people are saying, oh, the stuff that he was on, these patches or these adafinil or whatever, like, you know, it causes people to gamble.
No, what it does is it causes you to be awake for a really long time, not think that you have to sleep that much.
And so you make increasingly poor decisions as you slowly lose your mind and things escape you and you can kind of only focus on the immediate present, the tasks that you were doing right there.
And then you get locked into them.
You get locked into the game.
You got locked into the game.
And it's very clear that like Sam and all these other people like justified all this stuff that they were doing is because they thought they could, they thought they could pull this off.
They thought that they would be able to sort of just like fake it till they made it.
Like, okay, we're doing something criminal, but eventually it'll work itself out.
And then maybe we'll give some money to charity or whatever.
But like.
We just need to like just get more money in here and we'll make, we'll get the one bigger bet that could, because that's the thing that, you know, to be clear, no one knows where their fucking money went.
Yeah.
It's very unclear how they lost all this money.
People have tried doing some math and there's some good accounts out there that have like put together some theories.
We'll find out in the bankruptcy filings.
Yeah, eventually if they can get to any of that, which is very complicated.
Yeah, they're already saying there's employees that were fake.
Like, yeah.
Yeah.
I mean, they, yeah, they, there's so much wrong.
Yeah.
But it's not, this isn't just, you know, a case of like, oopsies, some things went awry.
Yeah.
It's like years and years of very, very, very bad bets.
And then trying to make even bigger bets to make up for the bad bets and the losses and the giant gaping, like mawing hole at their balance sheet.
Right.
Yeah.
It's, it's, it's fucking extraordinary.
And like, it's crazy because now, you know, SBF has done some, like I said, a pair of, you know, post crash interviews.
One, a very softball one from the New York Times.
Yes, which was really pathetic.
And then one with a woman that he's friends with who works at Vox.
He and Carolyn appear to be friends with, where he says, I mean, it's just really, it's conducted over Twitter DM and Vox.
Yeah, I don't think he knew that it was an interview.
True and on tip here.
Here is the biggest.
The literal actual business is.
This is literally, if you don't, look, you don't know, you haven't learned anything.
You're like, I don't know, who did 9-11?
You don't know.
You don't pay attention to us whatsoever.
Just pay attention.
Just pay attention to this.
Every single thing you say to a journalist, especially if you say it's off the record, is on the fucking record.
It's all on the record.
Journalists do not have to tell you, hey, I'm being a journalist now.
So everything you say to me.
Yeah, everything that's going on is going to tell you.
Yeah.
They do not have to tell you.
And ethics are fake.
All of it's fake.
Believe me, all of it's fake.
All of it's fake.
All of it's fake.
They will.
And I don't even know if that's journalistic ethics.
I don't know.
But like, it's all fake.
Anything you say to a journalist, I know that you think like, well, maybe the things I say to a journalist won't.
No.
It's all going in there.
If it works.
Here's another tip, though.
If you actually do want somebody to get in an article, you got to say a really cool sentence.
And then they'll have, like, that you know that they're going to be.
Yeah, and then they'll be like, wow, my journalistic ass brain knows that that is like yeah, you got to give them a hook like in a pop song.
That's if you want your message to get across.
Don't you don't want that message because you're not fucking talking to a journalist.
So in this, he says, fuck regulators.
They make everything worse.
And then complains that they, quote, don't protect customers, which I'm like, my brother, they're protecting customers.
They're failing to protect customers from you.
You are the bad guy.
Because this whole time, like, also, he's been running around trying to raise liquidity for fucking in that interim period to raise liquidity.
It's like, dude, why would anyone ever give you money?
Because my man thinks he can reset.
He can't.
There's no great reset coming.
No, but not even.
I'm talking about in game mode.
He's like, oh, I can just start over.
I get another life.
Let's just keep at it.
So the reporter also asked him about some statements from his past about ethics and accountability.
And he basically says, like, oh, yeah, I've said a lot of shit in the past.
Like, literally says, like, oh, it's not true, really.
And he also says, heh, a lot.
That is, I hate that.
Dude.
Just say, ha.
So she asks, so the ethics stuff, mostly a front.
People will like you if you win and hate you if you lose.
And that's how it all really works.
And he says, yeah.
I mean, that's not, and then the asterisks next to it, all of it, but it's a lot.
The worst quadrant is sketchy plus lose.
The best is win plus three question marks.
Clean plus lose is bad, but not terrible.
So like this is how he sees life is like, all right, the worst thing to be is sketchy.
Like everyone hates you and you also lost.
The best thing to be is like, you won and then like, but also sketchy, maybe it's okay.
And then the second worst thing to be is clean and lost.
So like what he's saying here, like you see, you see where this is going?
Like, I don't know how to explain this right, but the way he's writing it basically is says, if you win, it does not matter what you did.
If you were clean to get there or if you were nasty to get there.
And in a way, he's right.
Like, if we're being like realist about it, that is the way the fucking world works.
But, like, sometimes, but that's not the way a man with a heart works.
Yeah.
And, like, it's just very obvious that, like, his ethics actually did inform basically every decision.
Like, the man is living his ethics here.
Yeah, absolutely.
But he also complains, which I thought was a very funny little nod, about the quote, dumb shibboleths that we woke Westerners have to say so that everybody likes us.
The anti-woke turn that comes for everyone trying to rebrand.
But he basically, he never takes any kind of responsibility.
I mean, he still doesn't seem to really understand or be able to grapple with, like you're saying, he's like, treat it like a video game.
Like, oh, this is all just like numbers on a screen.
Why FTX Went Up In Flames00:10:07
Totally.
I mean, there's a whole thing where he says what his biggest single fuck up was, which is so crazy.
He's like, I fucked up big multiple times.
You know what?
My maybe my single biggest fuck up, the one everyone told me to do, everything would be 70% fixed if I hadn't done it.
And the gal is like, I'm trying to guess, but I have no idea.
And then he says, chapter 11, aka bankruptcy.
But that's here.
They file for bankruptcy.
Yep.
And the filings came out, I think, today, actually.
They're wow.
Extraordinary.
Extraordinary.
I just want to read one quote because otherwise this is the new CEO of FTX, John Ray, a decorated CEO, as you'll see.
I had over 40 years of legal and restructuring experience.
I have been the chief restructuring officer in several of the largest corporate failures in history.
I have supervised situations involving allegations of criminal activity and malfeasance.
And then in parentheses, he writes, Enron.
So already we're off to a great start.
Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy information as occurred here.
From compromised systems integrity and faulty regulatory oversight to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.
Now, here's a true non tip: you don't want the guy who restructured Enron saying that your situation is unprecedented.
Yeah, you don't want that.
Here's a true non tip.
You want your situation to be precedent.
You always want to be precedented, honey.
There's got to be a precedent for you guys.
You don't want the Enron guy to be like, you know what?
I'm breaking new ground here.
Yeah.
So there's some highlights here, just real quick.
His hedge fund seemed to, I'm sorry, SBF's hedge fund apparently lent billions of dollars to just SPF.
Customer liabilities were never included on FTX financial statements.
SPF has yet to provide a complete list of people who worked for FTX to the court.
sbf controlled access to all digital assets within the ftx group which is a little psycho this is the big one which is that alameda had a secret exemption from ftx's auto liquidation protocols which basically so like like we were saying when someone's leveraged up when their bet goes south they get all auto liquidated um This is one of the so-called features of crypto, right?
Is that it's all in smart contracts.
It's just like, oh, that is bad.
Yeah.
Time to go.
No one's like actually making margin calls.
It's all automated, right?
FTX built out exemptions for Alameda, so they never were liquidated.
So insane.
Which is pretty insane.
FTX actually didn't have an accounting department.
You'd want those at your financial firm, right?
You'd think.
Their auditor was actually located in the metaverse.
Oh, I think.
I'm not even kidding.
Really?
Yes.
It's Israel who lives there.
Yeah.
They're basically zero records of how much money they owe and how much money they have, two things that you really need when you're running a business.
The FTX staff is currently, this is a direct quote, reviewing various third-party sources in order to locate investments that they need to recoup.
So I think they're literally Googling who and what FTX invested in in order to figure out who could possibly be a creditor in their bankruptcy.
It's a whole fucking disaster.
And I'll say, yeah, there's a lot of real people that had their money lost.
There's an estimate of like about a million people who are potential creditors to the FTX bankruptcy.
But the big thing is that there are a lot of institutional players, trading desks in the crypto sphere.
Yeah.
And the kind of, you know, cascading effects and possible like, you know, domino effects from this of other players falling, like we're already seeing, but it's also going to take some time as people basically sort out how much fucking money has just been like completely vanished into things.
I mean, yeah, we're going to, there's going to be some dominoes that fall here, right?
I mean, already like Bit, is it BitConnect?
The, the fucking BlockFi.
Yes.
They're all named as BlockFi.
BlockFi, there seems to be rumblings at Genesis, and that's pretty scary.
But like literally, by the time this episode comes out, it's going to be a billion more.
And there's like, yeah, it's just, it's impossible to say because everyone says there's no exposure.
But that's the thing in the crypto space, true and on tip, they're always fucking lying.
Yeah, everyone.
Never believe them.
It's all this talk about trust us that the chain never lies.
Every single person on that chain is lying.
So what did we learn from this, Liz?
I mean, I didn't learn anything.
I've been knowing.
I've been knowing too.
We've been on this.
We've been knowing.
We've been knowing it.
And you know what?
This is going to keep going and we're going to keep talking about it.
There's so much more to say and so much more that's going to come out.
And I have a lot of, I got a lot of shit to say about crypto.
Yeah.
Loans on crypto.
I mean, it's just like structurally, I'll just say this real quick.
Like structurally, underwriting loans on crypto is completely and totally absurd because they underwrite the asset and not the person.
Yeah.
Right.
And when you do that, you're basically just saying that its quote unquote future value is completely and totally like inviolable.
Right.
Yeah.
That's the same thing.
Maybe we can get into this in a like future episode and we can fully explain it because we don't have time now.
But I'll say that that is exactly the same way that the mortgage crisis was structured.
Right.
The idea that housing could never go down, but you underwrite loans to people because there's so many different things that can happen other than an asset's value, right?
Yeah.
There's so many different pathways to a loan going sour, right?
So you underwrite borrowers.
You don't underwrite assets.
And that is the, I would say, structural flaw in the entire crypto ecosystem and what makes it a complete and total fucking fire.
Would you call it a dumpster fire?
I would.
You know what?
I would call it a dumpster fire.
I don't care.
I don't care if that's yeah.
And you know what?
We're going to keep calling Sam.
Yeah.
You know what?
I actually am going to call Sam.
I'll be real.
I'm going to call him an idiot.
We should just read out his number tomorrow night.
No.
Maybe not.
Let's keep it close to the chest.
Let's keep it close to the chest.
Yeah.
I don't want to repeat my Eddie Money situation, actually.
Oh, good call.
Well, you know, who might be giving that on his?
We should give it to Longmont Potion Castle.
Okay.
Yeah.
All right.
Well, we've been recording.
We got to get back on the road.
We're going to Seattle.
Oh, yeah.
And if you're still listening to this and you live in San Francisco and you were affected by the crypto downturn, let me tell you, there's something that you should, oh my God, the last trouan tip.
The one that we have to say for every crypto episode.
What?
Always keep your dollars in money.
Always keep your dollars in money.
Always keep your money in money.
And you know what?
I'm going to say this.
Keep your money in dollars.
Keep your money in dollars.
Other currency that can get traded very quickly to dollars.
My fucking, no, I am a full-on Fiat Maxi.
I'm going to say the penny, the eternal token.
Yeah.
Always.
The penny, quarter.
You know what?
Try playing for a fucking Time Crisis 2 in a non-walled garden arcade with a fucking Bitcoin.
You can't.
Try paying for it with a quarter.
You can.
Here's the thing, too.
Money.
It's always money.
Always money.
And you know what people take?
What?
Money.
Cash.
Keep it in money.
Also, if I do see you and you give me shit for being a cash guy, I'm going to fucking piss on your phone.
And then, oh, you try paying for a pack of mar bread.
You know what you do after that?
What?
Put it in rice.
Yeah.
Well, you know what?
Then you're fucking, then you still got to eat that rice afterwards.
I pee pee on it.
Well, well, well, we still have a show that has tickets for sale on November 26th.
We are still on tour.
We're actually in Los Angeles recording this episode right now.
In, of course, the famous hotel where that lady died.
I watched that video so many times.
Me too.
I know.
And I'm like, you know what?
What do you think happened there?
That chick was tripping.
You think?
She was tripping.
How do you think she got in there?
From the ghost.
But she was like tripping.
She should have been chilling with the ghost.
Yeah, yeah, yeah.
Yeah.
I don't know.
But I'm definitely not watching a two-hour documentary on that.
That's too long.
That's too long.
The video is already pretty long.
Give me a 15-minute video.
I think the video's like 80 minutes.
Yeah.
That's long enough.
Like, what, you know.
All right, I'm Liz.
My name is.
I can't do the voice because my throat hurts.
My name is Brace.
We're, of course, joined by producer and, of course, fiduciary duty Young Chomsky.