If there was a shred of courage or moral fiber in our generation your article would have the same galvanizing effect that Zola's 1898 open letter declaring "J'accuse!" had on France.
Sadly, we're apparently a nation of sheep.
But if you can think of anything I can do, at least--let me know. I'm ready!
This is fantastic! You forgot about Michael Lewis. You have the basis for much better book and/or movie. Can the establishment's behavior be explained by their embarrassment? How did these smart, rich, and powerful people be so fooled? It's easier to obfuscate and muddle the situation than confront their inadequacies. Of course, this does not justify their behavior and inaction. Or, do you think it is more nefarious on their part?
disappointed the post turned into a long winded rant against Democrats and liberalism writ large with misleading facts/statements throughout. had such promise.
am curious what contributed to citizen journalism doing a better job here. domain expertise, no ad rev from ftx, being away from the beltway ech chamber, etc?
I'm not closely involved in US politics or the left-right fight, and which side is suppressing the other and with which tools or weapons
However, I find it fascinating how SBF manipulated the political, moral, media, and regulatory systems, and how the network was able to bring them all down to some extent.
I am mostly supportive of the mission of TNS, especially the idea that the anti-fragile crypto network can self-regulate. But, I'm not entirely convinced that the current state of parallel systems in media, law, regulation, medicine, etc. can exist without some level of collaboration with the legacy systems.
There is a lot of criticism towards X that makes sense to me, considering the opposition from legacy media, which may have some truth at its core regarding bots and algorithms amplifying more division with propaganda.
Let's hope Satoshi has been working on a PoW for those parallel systems in the mean time.
This is a fantastic article. Thanks for writing it. I agree with Sunil, Michael Lewis was horrible. My friend Terry Duffy sniffed out the fraud right away. I'd also say that the VCs are still not blaming themselves. "He lied to us". Bullshit. They didn't understand what an exchange is and how they operate. No amount of regulation is going to save crypto. Only crypto can save crypto. There are fraudsters all over. Can't go mainstream until you make them marked men-and the government will never do that for you. They are never ahead of the curve
1) Well, venture capitalists that invested in FTX lost millions, and had to explain it to their LPs. So did retail investors who kept their money on FTX's servers. So, they actually encountered a significant penalty that will change their behavior going forward; for example, VCs may fund onchain accounting, and retail investors may not keep their coins on exchanges.
2) By contrast, as I noted in the article, though the investors who put money into FTX lost their shirts, the politicians who got money out of FTX kept their seats. Journalists to my knowledge haven't run mass retractions, regulators haven't been stripped of their positions. There have been a few clawbacks but the vast majority of stolen money swung elections that will never be unwound.
As such, the establishment has paid no lasting penalty for this. It's similar to the Iraq War, the financial crisis, and similar catastrophes in this regard. A school of fish that avoids individual consequence. https://twitter.com/balajis/status/1441030468036485132?lang=en
3) The long term solution here is not just proof-of-reserves, but full on chain accounting:
Your comments are so valid. The SEC not only does not investigate they ignore. In the last 6 months I transferred my account from Charles Schwab (ACATS) to another large firm. Schwab chose to hold back a Fixed income security that was due to mature in a few days for NO REASON. Then they held my money after it matured over a weekend and plus 3 days. Then they put it in the transfer portal (my analogy) and it took a few more days. Basically I could not use my money for a week. I lost a bit under $300 so illiquid Charles Schwab could use my money. I filed a complaint with the SEC and they email Charles Schwab who did nothing.
I invested in an operating company bond (lots of assets) as represented on Schwabs website prior to moving my account. They transferred a holding company bond (no assets). Completely different bond. I just noticed this. Let's see if they SEC approve of bait and switch and or misrepresentation of facts.
"Again, if you read all the stories about the “SBF Pandemic”, the “SBF Blast Radius”, and the “SBF Legal Meteor” it appears to have taken a few weeks for all the people he’d funded with stolen money to sync up with each other and get their stories straight — in no small part to defend against the possibility of clawbacks. But ultimately the anti-SBF faction won out. He was an embarrassment to the Party, and he had to go."
What is interesting here is that nobody has been forced to give back anything, AFAIK. The prosecutors for some baffling reason seem rather reluctant to go there.
What an amazing piece! I read this and immediately became a paid subscriber. You will NEVER get this type of analysis from the main stream media because they, as this article points out, a large part of the problem.
Another aspect to this: Crypto media cared _less_ than the mainstream about preserving access to SBF, so the coverage tended to hit harder and with devastating effect a year ago. No mainstream outlet wants to lose its access to "the next JP Morgan," however, "the next JP Morgan" is exactly the kind of person crypto doesn't like.
Awesome analysis--well done!
If there was a shred of courage or moral fiber in our generation your article would have the same galvanizing effect that Zola's 1898 open letter declaring "J'accuse!" had on France.
Sadly, we're apparently a nation of sheep.
But if you can think of anything I can do, at least--let me know. I'm ready!
What a fabulous article you have written. I LOVE it!
This is fantastic! You forgot about Michael Lewis. You have the basis for much better book and/or movie. Can the establishment's behavior be explained by their embarrassment? How did these smart, rich, and powerful people be so fooled? It's easier to obfuscate and muddle the situation than confront their inadequacies. Of course, this does not justify their behavior and inaction. Or, do you think it is more nefarious on their part?
Sequoia got embarassed as well. Here are the full receipts: https://yuribezmenov.substack.com/p/sequoia-ftx-214million-disaster
disappointed the post turned into a long winded rant against Democrats and liberalism writ large with misleading facts/statements throughout. had such promise.
am curious what contributed to citizen journalism doing a better job here. domain expertise, no ad rev from ftx, being away from the beltway ech chamber, etc?
Next up, SafeMoon! All these scammers need to exposed and brought to justice.
Reminds me of Harry Markopolos's numerous failed attempts to alert the SEC to Bernie Madoff's fraud.
Forgot the link: https://en.wikipedia.org/wiki/Harry_Markopolos#:~:text=Harry%20M.,accounting%20and%20financial%20fraud%20investigator.&text=From%201999%20to%202008%2C%20Markopolos,was%20a%20huge%20Ponzi%20scheme.
I'm not closely involved in US politics or the left-right fight, and which side is suppressing the other and with which tools or weapons
However, I find it fascinating how SBF manipulated the political, moral, media, and regulatory systems, and how the network was able to bring them all down to some extent.
I am mostly supportive of the mission of TNS, especially the idea that the anti-fragile crypto network can self-regulate. But, I'm not entirely convinced that the current state of parallel systems in media, law, regulation, medicine, etc. can exist without some level of collaboration with the legacy systems.
There is a lot of criticism towards X that makes sense to me, considering the opposition from legacy media, which may have some truth at its core regarding bots and algorithms amplifying more division with propaganda.
Let's hope Satoshi has been working on a PoW for those parallel systems in the mean time.
This is a fantastic article. Thanks for writing it. I agree with Sunil, Michael Lewis was horrible. My friend Terry Duffy sniffed out the fraud right away. I'd also say that the VCs are still not blaming themselves. "He lied to us". Bullshit. They didn't understand what an exchange is and how they operate. No amount of regulation is going to save crypto. Only crypto can save crypto. There are fraudsters all over. Can't go mainstream until you make them marked men-and the government will never do that for you. They are never ahead of the curve
1) Well, venture capitalists that invested in FTX lost millions, and had to explain it to their LPs. So did retail investors who kept their money on FTX's servers. So, they actually encountered a significant penalty that will change their behavior going forward; for example, VCs may fund onchain accounting, and retail investors may not keep their coins on exchanges.
2) By contrast, as I noted in the article, though the investors who put money into FTX lost their shirts, the politicians who got money out of FTX kept their seats. Journalists to my knowledge haven't run mass retractions, regulators haven't been stripped of their positions. There have been a few clawbacks but the vast majority of stolen money swung elections that will never be unwound.
As such, the establishment has paid no lasting penalty for this. It's similar to the Iraq War, the financial crisis, and similar catastrophes in this regard. A school of fish that avoids individual consequence. https://twitter.com/balajis/status/1441030468036485132?lang=en
3) The long term solution here is not just proof-of-reserves, but full on chain accounting:
https://twitter.com/balajis/status/1592226882107625472?lang=en
https://twitter.com/balajis/status/1592248309951131648?lang=en
"No amount of regulation is going to save crypto."
The goal of regulation in this case is not to "save" crypto but to domesticate it and neuter it, make it into blockchain PayPal.
What was wrong with Lewis' book? Haven't read it yet, but am thinking about getting it.
he basically says that SBF is the type of person our world needs. He ignores all the fraud.
Oh, Nefarious, for sure.
Thanks for helping me restore a bit of faith in the decentralization 🙏
Your comments are so valid. The SEC not only does not investigate they ignore. In the last 6 months I transferred my account from Charles Schwab (ACATS) to another large firm. Schwab chose to hold back a Fixed income security that was due to mature in a few days for NO REASON. Then they held my money after it matured over a weekend and plus 3 days. Then they put it in the transfer portal (my analogy) and it took a few more days. Basically I could not use my money for a week. I lost a bit under $300 so illiquid Charles Schwab could use my money. I filed a complaint with the SEC and they email Charles Schwab who did nothing.
I invested in an operating company bond (lots of assets) as represented on Schwabs website prior to moving my account. They transferred a holding company bond (no assets). Completely different bond. I just noticed this. Let's see if they SEC approve of bait and switch and or misrepresentation of facts.
"Again, if you read all the stories about the “SBF Pandemic”, the “SBF Blast Radius”, and the “SBF Legal Meteor” it appears to have taken a few weeks for all the people he’d funded with stolen money to sync up with each other and get their stories straight — in no small part to defend against the possibility of clawbacks. But ultimately the anti-SBF faction won out. He was an embarrassment to the Party, and he had to go."
What is interesting here is that nobody has been forced to give back anything, AFAIK. The prosecutors for some baffling reason seem rather reluctant to go there.
Wow, thank you for the detailed blog. Sitting 7K miles away, we just heard something happened somewhere, now we know the details of it.
What an amazing piece! I read this and immediately became a paid subscriber. You will NEVER get this type of analysis from the main stream media because they, as this article points out, a large part of the problem.
I agree with all of this, but missing is any critique of the VC/tech industry that also supported the ruse and inflated valuations.
Alfred Lin got spanked on Twitter, but there's no mention of it in this piece.
See my comment above. TLDR is that the investors lost their shirts (so they already paid a penalty), but the politicians kept their seats.
https://open.substack.com/pub/balajis/p/crypto-twitter-found-sbfs-fraud?r=2974h&utm_campaign=comment-list-share-cta&utm_medium=web&comments=true&commentId=43178440
Another aspect to this: Crypto media cared _less_ than the mainstream about preserving access to SBF, so the coverage tended to hit harder and with devastating effect a year ago. No mainstream outlet wants to lose its access to "the next JP Morgan," however, "the next JP Morgan" is exactly the kind of person crypto doesn't like.