# FTX is liquidated

## Метаданные

- **Канал:** UpOnly
- **YouTube:** https://www.youtube.com/watch?v=YimBTM7kwjc
- **Дата:** 08.11.2022
- **Длительность:** 2:38:15
- **Просмотры:** 87,200
- **Источник:** https://ekstraktznaniy.ru/video/53151

## Описание

In this episode of UpOnly, Cobie & Ledger talk the rapid downfall of FTX and acquisition announcement by Binance. We're joined by the CEO of Wintermute, Jim Talbot, Gainzy, Do Kwon, and Martin Shkreli.

00:00 - Intro
02:40 - FTX and FTT blowup / Alameda 
18:00 - Insolvency / How could this have happened? / FTT as Collateral 
29:30 - Evgeny Gaevoy joins / How intertwined were FTX and Alameda? 
34:40 - Jim Talbot joins / More Speculation 
46:20 - How does this keep happening? / How big is the liquidity shortfall? 
54:00 - Could a new player emerge? / Sam Trabucco 
59:15 - Solana / Can FTX come out of this? / Jim’s trades
1:12:20 - Do Kwon joins / LUNA collapse and aftermath 
1:37:10 - Martin Shkreli joins, and shares his thoughts 
1:44:50 - Was FTX using customer funds? / Potential legal ramifications for SBF
1:54:35 - Coordinated prosecutions / Legal fallout 
1:59:40 - Ethics in Investing / Where is the ethical boundary?
2:06:13 - Who else could be impacted? / Lenders and Investors 
2:1

## Транскрипт

### Intro []

up only ten nine ignition sequence Stars hello and welcome to up only TV I don't know what just happened I'm like behind the logo something weird is going on it's not the only weird thing going on yeah let's just get straight to the show foreign welcome to chaos how you doing um yeah man so I like we don't know what we're going to talk about really there's not much going on these days yeah we're just live BC News we uh we press when we press go live yeah that we've been real we've been doing a lot of that recently um all right do you want to run the sponsored by FTX I gotta find it I can't even find it because I made you take it off for the last episode yeah here we can play a little uh Merry-Go-Round let's go through the Journey of up only brought to you by nobody like this when it was Ledger and Kobe live didn't even get called up only then brought to you by blockfolio that's what the contract still says and then the long era of brought to you by FTX and now I don't have one with binance yet that is that who this is we don't know look this is just up only can you like do it can you do like can you put a finance version on there yeah the memes yeah sure let me go just download a binance logo real quick give me a minute has anyone registered SBF underscore BNB on Twitter yet because it's a great username for you to go to go so I sound low so once that I sound low you sound low all right it just pumps you up I'll turn myself down as well uh Kobe you've been around for a long time where's this rank on the like oh my God territory um I don't know man I don't know I think maybe I'm getting old my judgment is getting worse

### FTX and FTT blowup / Alameda [2:40]

I don't know but 3ac and FTX blow-ups like didn't expect it when Mount gox blew up it was like yeah cool of course that happens if you use the website like it there's no way that works properly um when like hacks happened in the past like yeah it makes sense but and then even like 3ac you can like kind of in hindsight going okay maybe they were just going margin long and everything all the time but like FDX is that the exchanges are extremely uh profitable okay like you don't need to do much if you've got a product I mean I just yeah it's insane if you have a profitable exchange all you need to do is nothing you just need to chill you need to let it print the money you don't need to what the [ __ ] have they done I don't know wait everyone's saying Susie replied to the Tweet which one do you want to come on they're [ __ ] oh my God he just said good morning oh my God GM Sue do you want to come on suzu do you want to come on the show we need something we bring us something Sue I know you're listening you've got your uh you know the URL go to the set go to the URL dude whoa listen there's never a dull day so like the uh I mean forget us in sponsorship the FTX logo is on like the Major League Baseball umpire uniforms and for 12 Miami arena like what are they gonna do yes he's just gonna say this is mine now like is that how this works Formula One oh yes on all the cars and [ __ ] in it man I like to have to go to the um like the enemy within 24 hours of the bank runs starting to go to the like save the industry save user funds acquisition means it was so bad that they didn't think they could raise enough money to cover it basically right like they would have need needed to raise what half a billion they could have probably raised it yeah so it has to be larger than that maybe they could have even raised a billion in a Down Round if they really went deep with people something like what's that what's the hole is it like two billion dollars and how the [ __ ] did they have a two billion dollar were they literally just giving it to Alameda or something I can't understand there has to be some big problem with Alameda and ftx. com like it seemed like there was a I saw this I'm now just gonna hit straight speculation because what else do we have to do uh somebody in the chat when we were recording weekly open which is probably already aged like historically badly uh which nobody should be surprised um but I uh somebody said there's a carve out in the terms of service for FTX US versus like other jurisdictions in terms of user fund usage and I wonder purely speculatively was there like on the ftx. com side of things was there usage of funds by Alameda doing other things and somehow Alameda became insolvent it came up very late and you pulled the whole our collateral as ftt ftt's react they get liquidated or margin called or God knows what but like they were talking a whole different game 24 hours ago was it really 22 dollar Line in the Sand for ftt and that was it Peg broken game over I don't mind I think I'm just getting old because like every time something like someone blows up I'm like I just oh [ __ ] hell dude I don't [ __ ] know I mean Sam was on the cover of Fortune like two weeks ago but if like so my question is if they were co-mingling funds with Alameda which I thought was like virtually impossible I thought it was so stupid it would be virtually impossible but if they were crossing the boundary into co-mingle funds with Alameda and like letting Alameda trade customer funds basically then why didn't they just share data with Alameda let automated trade against everyone else and like make free money like they had god mode and they still went inside they still went bankrupt I don't get it how do you lose money if you can see everyone else's positions I don't understand I like when CT is like oh they're just stealing money from us all like they're sharks they're like making trading unfair they're pumping their own bags Etc actually they just blow up they just they're worse than everyone's broke they literally is that surely not I don't know dude uh who [ __ ] knows I mean if you really want to pull the regulatory hammer down this is a good way to start it says he won't come on um all right don't mate that's fair enough yeah message me saying LMFAO Telegraph tell them uh tell them to happen he's not gonna do it do you want to come on up only Or Nah all right I can message dokon as well just ask everybody listen we want to come on up only to talk about this if you've already blown up this year what do you have to lose foreign oh my God all right well do you remember when people used to put FTX in front of stuff like it was like FTX Miami and stuff yeah now it's binance FDA Finance FTX Miami come on Tom Brady's had a bad year let's just say that you don't know who Tom Brady is no here's the um basketball player awesome yeah um got divorced his team sucks and his fgx Equity interest just got liquidated two different people have told me that FDX has a two billion dollar hole um one person has told me as a binance deal is not going to close because open quotes allegedly Finance do not know how bad the fraud is um so that doesn't sound good well that's you're speculating they're speculating yeah I'm just passing on the rumors yeah I'm adding fuel to the fire yeah I was in trouble every single person that message from that said please do not say this information on the podcast so yeah I was like I was tweeting because earlier I had said that I had not heard anything on the team either and then as soon as I got a message the core team is working to get some comms out there hoping to have an update soon I then shared the core team is gonna say something I just found out and it was like the same time that Sam was like yeah ftx. com has been bought by Finance soon it happened we're out of our deal now can we 'd have to do the rest of the episodes we're contractually obliged to do for them or do we have to do them well I actually because I didn't know who do we have a contract with like what is our deal and it looks like it's with uh blockfolio so our contract is with blockfolio so it is blockfolio part of this deal is portfolio part of FTX us oh my God if we're sponsored by it's gonna be that I'm going to be like do you please use f2x us [ __ ] you know um all right well I think if the like we must have a clause it's as if you're going solvent we out of the deal right um I just shared I forgot this is a display um I'll have to open the contract and look I don't know what's in there should we just put it online probably got terrible mom I look if I could have guessed the ways that this would resolve this would have been the bottom of my list of guesses um this has been yeah I getting purchased means the insolvency rumor must be very close to True like if not true very like the delay was there delays would it cause delays was there not funding available elsewhere what was out there to make this be your outcome you know were you wanting to that's what I mean like it has to be something very bad because um they would have just raised money otherwise like they were they raised how much last year 400 million I think on a 32 billion valuation in that one round yeah like I yeah who knows um I'm messaging everyone that I know that's like a FTX investor and no one will talk yeah Susu said he'll think about it about coming on let's go I mean can't think about it too long it's like 5 a. m for me so I mean I mean I'm pretty sure I shouldn't be shocked anymore but I continue to be okay someone's messaged me this I don't know who it is because they're just constantly been messaging my stuff for years and I've never replied but they say this is the conspiracy theory um old collateral weights on FTX were very easy going when it came to Alameda farming collateral they use these weights like bow Tomo and Lua to borrow real deposits to farmways the 2. 5 billion dollar wallets were all user deposits and they got wrecked on impermanent loss they bought block folio for more user deposits under their lend stuff FTX operates under private Liquidators nobody would have known if their bad collateral from farming a dog [ __ ] elevator just like get liquidated was hidden all this time under a bank run so the speculation there is basically that they were doing the same thing as three AC a of wintermute just tweeted CZ bought um FDX but not Alameda if alamator is your counterparty on anything at this point I would be extremely worried apparently Caroline has removed Alameda from her Twitter profile uh that was already gone the other day yeah I don't think that was there before if you go to Caroline's profile and just look at the tweets she likes it's all me maybe Caroline's a cobison it is it's like it's I'm looking at him right now it's all you it's all me and then one from someone else saying will she marry me can someone please tell CZ that Alameda is all in short ethereum with the liquidation price of 2800 liked by Caroline I got a DM from buy bit a second ago saying hello I'm adding Jack from the Partnerships to you apparently would be more than happy to discuss the partnership with you guys apparently bit Lord is streaming on Spaces right now maybe we should just bring him on just for pure comedy he was on episode giant yeah Sue come on suck it up your two degrees of separation from Scandal now come on all right maybe to see when a mute will come on um does he have a nice voice we need people with nice voices um do you want to come on up only right now it's lots of fun there's 13 000 people ready for you to say anything and there's like at least 15 viewers oh who should we have on maybe someone else can tell us who I gotta tell my team I'm gonna miss our product meeting yeah you doing important yeah that's very important all right the CEO went to me will come on um Alex y said she never had Alameda on her Twitter profile she didn't remove it was just I just don't understand how all these people that were like somehow stealing our money by out trading us are all blowing the [ __ ] off it doesn't make any sense it's not that difficult did you see that uh Arthur from bitmex he he's also supposed to come ask Arthur if he wants to come on um he bought 15K puts this morning and the market immediately went up oh yeah that's the only good thing about this whole scenario is that ethereum fully retraced the um there's a fud dump stuff is it still funny so after shorted the absolute bottom yeah what a legend when he does it it's cool well people do you're like haha you start when last visit like sick no that's nice it was just a hedge man oh well I think this has been the stupidest year in crypto ever

### Insolvency / How could this have happened? / FTT as Collateral [18:00]

compared to like previous years this one was the stupidest um I think look there's surely lots of this is just completely unnecessary someone asked are Your sponsorship checks clearing I don't even know whether we just got paid yesterday it's the fastest payment we've ever gotten but it was we had not billed for like months because we didn't do any shows so yeah um well you gotta talk about the Game of Thrones move from CZ to like I mean yeah either spread rumors or like leak a um an insolvency and then just buy the entire company I'm guessing for very cheap and I'm guessing ftx's Equity investors get really [ __ ] and maybe the employees get [ __ ] um yeah I guess your common stock goes first so your early investors team worst off I don't know it depends on the terms of the deal but the terms couldn't have been that good yeah and especially if it's well especially if any of these like things people are saying are true and they're like it's much worse than binance knows somebody in the chat there's a lot of scroll going on but somebody in the chat says FTX doesn't give Equity to employees but I mean earliest employees really got some do they get ftt they might how's ftt doing on this news it wouldn't surprise me if it went up just because people oh yeah make the Assumption yeah it is it's up from 1438 to 1750 now it went to almost 20 on the news so somebody could have had inside info on that and still be wrong if anyone has any um any good gossip please play this we're just reading it Sam Asing remember when we had Cece and Sam on the same show I think we could do that again come on um I mean probably not wearing them after I sees you know because um uh well so two different people have just told me that he sold for one dollar surely sold FTX yeah which because if they have like a two billion dollar hole let's say yeah then the price of acquisition is um uh like nominal right it's the price is actually the whole you're filling in um well actually one person said it was one dollar and then someone else is um says it's one Dogecoin it's easy offered one Dogecoin hour finally changed my mind and saying cz's call um so can we presume that Alameda blew up well the rumor I am receiving on telegram from someone who's reasonably close with Sam says the reason is Alameda co-mingled assets with FTX offshore which is why after X us withdrawals work and offshore didn't so I just can't like if that if they genuinely did that if that's true I cannot like how [ __ ] stupid can they be they must have done it a long time ago and got into a big hole and then been had to like work it out or something because he if you're not in a hall and you have a successful exchange you just don't try and rinse extra profit for no reason like they must have done it ages ago and got carried away got carried by the Boron or something [ __ ] stupidest thing I've ever heard like why would you bother you have a successful exchange business that prints money by doing something [ __ ] stupid it doesn't make sense um you know Caroline and SBF used to date what is this more stuff people are just texting you can guys you can text Kobe anything right now and he'll read it um all right without looking is tether still one to one uh yes maybe greater than one to one should we look it up all right ciao tell us I'll believe them whatever they say Justin sun has tweeted okay let's see what Justin Sunset Justin got scammed he just bought huobi he could have bought s e x for a dollar Justin can make up that uh two billion dollar hole wallet he treated Hobbies back in the top three the second biggest exchange died incredible how can you have the audacity to go to DC and be lobbying politicians and donating 100 million dollars politicians why you have a two billion dollar hole in your box it doesn't make sense the thing that's caught me in this cycle when stuff went wrong previously it was like someone got hacked someone set up their wallet wrong something like happened but this one it was always like oh someone just did something that they could have avoided doing that was illegal someone made a directional bet that was wrong illegally yeah like three AC was like oh we faked we like faked collateral to make some directional bets we got them wrong this seems to be all we co-mingled with the Alameda they lost our money like the previous ones it was like oh the people were at least trying to do the best um and they made an error this one's like oh yeah people were just doing illegal [ __ ] and for some reason I go ah they would never do a legal [ __ ] when you can just not do illegal [ __ ] but was it 2021 when Alameda was like yeah we started being directional it used to be um delta neutral and now we just or directional and that's fine wasn't that 2021 on the way up foreign like they bought like gbtc or something that would certainly make sense to me but a two billion dollar hole's a big hole like they must have had and there's a lot of money on those exchanges that will not their risk tolerances just are like any rumor gotta get out and if it's kind of a Pareto Principle thing a small number of big players say they're out and it just creates a huge problem on that liquidity that would be best case scenario I guess if they weren't truly insolvent they just couldn't get the funds quick enough so is the you remember in 2020 when Sam was like using FDT like 25 of the entire FDT Supply as collateral to short like Wi-Fi or something on with cream you know the old Marketplace that did like lending yeah the money in the marketplace yeah but it had like long tail assets and he was using like 25 of the supply for ftt to like short some stuff yeah I just deposited all the ftt because cream accepted it as collateral and then did they just do that again same thing yeah except now the number went down so I thought these people were smart man yeah tethers Legend did you outperform elevator in Tracy I'm worth more than a dollar huge uh performance uh one zero zero one slash two is where tether is right now so it's slightly pumping yeah Tyler's pumping Long Live tethers I saw uh Paolo from tether he was like what there's drama and crypto and nobody's blaming tether for it this must be a dream I'm like don't speak too soon man they'll come for you all right everyone can spam tweet some tetherfoot yeah like the Bahama ftx's office in the Bahamas was where they were keeping all the dollars like physical cash dollars that tether was backed by in the basement Samo Sam also owns the physical tether Bank yeah it's a good one yeah it wasn't even bad it was just a floor of their office go Kwan's tweeted something apparently let's see Oak one um all right let's invite when Community uh see what he's got to say foreign yeah why not he's gonna have the you have the goods oh I mean what are we supposed to do where are you supposed like what are you supposed to do with anything like your day-to-day life yeah where are you supposed to trade like where who are you supposed to trust this is this has there ever been a better argument for D5 as long as you're not putting it in any lending protocols or like you know weird thing to get hacked but like just self-custody it's ever been a better argument for self-custing all right is what's dydx and jmx doing are they going up uh I don't know but this uh this person is joining the call so it's evg yeah it's gonna [ __ ] us all around it's all messed up sorry chat foreign that actually kind of works except for I'm all big I'm gonna Fix It Anyway y'all keep talking uh we're already live so can you give us

### Evgeny Gaevoy joins / How intertwined were FTX and Alameda? [29:30]

your spicy take on what's going on yeah I don't know I guess they just like gold [ __ ] cup smack as it says it's just I mean everyone was like so mind blown by three arrows but this seems to be like 5x of that oh yeah authenics I don't know like what those kind of effects is uh I applied here so do you think that um they just came and got funds with Alameda and then Alameda lost all I mean that that's the only way to do it right and it's unbelievable how much value you can destroy like this is just I don't know like those guys had everything they were on top of the hill yeah so do you think that they got into this situation um uh like a while ago and the hall was smaller like maybe when Bitcoin and ethereum were lower they had a like ethereum denominated whole or something because if you're a huge exchange that prints money why do you bother lending out funds to like you don't need the actual profit right like you your company is worth 50 billion dollars do you really need a hedge fund to directionally trade um was like it was just so improbable when people started discussing it like yesterday and today yeah because there must have been so many bad things to happen like first of all Alameda must have been completely incompetent training wise which we I guess most of us assumed was not true then on top of that FTX must have like whatever lens of money I guess to be also going down with them which would be also completely deodic I think and yet that's all the explanation how it happened by the way can you introduce yourself oh yeah it's not Kyle from three acros foreign who I imagine previously I didn't think FTX would blow up and this is neither to die I guess um [ __ ] dude so do you have any loans lending relationship with elevator or are you clear no we had like we all find that it's more like I think an interesting angle is oh I mean there was a market maker for so many protocols and yeah I think like a whole we'll see like a lot of contagions uh potentially because it must be like dozens of them [ __ ] so this makes your like you losing 100 million the other day in a hack look like nothing you guys are chilling you're like oh we only lost 100 million these guys lost billions yeah I can say that wait how much did y'all lose y'all got hacked oh winner yeah sorry how'd that how's that going like no homework whatsoever we've never done homework on this show before so uh someone in the chat said what he's the CEO of winterfellow might as well rename ourselves yeah uh come on oh all right am I mentioning October uh October 14th September 20th sometimes somewhere in that range pays off 96 million dollars true five debt so y'all weren't hacked someone else was hacked and then you paid cover the debt no I'm not ready we just got hacked then we repaid our loans and we were fine yeah all right so I didn't lose all their money you know the trick is to not lose all if you can't lose it is that the same like the trick is not to put all your money in one place and I'll definitely not go leverage on this which I guess both three arrows and Alameda did ultimately can you uh can you tell us what's it look like when you're going to like the crisis mode of things to try to figure out what actually went on like how long does it take you to gather the information to understand the full extent and then where do you take that I think it's about like one the first goal for us that they was just to understand that it's not like it does it cannot spread to any other operations because yeah G5 wallet was covered by this which was still like way below big part of our Equity so it was fine uh we just needed to make sure that like centralized operations covered and after that yeah it's just and I guess that that's what you don't see a lot of people do in the space but yeah after that was just a lot of communication like Twitter communication and just you know texting people on Telegram and was not James Giant Egg oh we've completely [ __ ] areas it's all screwed up again this is going to be impossible how you

### Jim Talbot joins / More Speculation [34:40]

doing sorry all right Jim what's your take give us your give us your online take oh give me a minute are you still just know why I'm here are you still playing golf is that like your only thing right now just yeah pretty much I managed to catch the short last night so I'm happy about that um but like to be honest if people follow me I've sort of been alluding to this for like the last three months that I don't think they're in a good situation just based on the sort of headline gesturing versus actions you know of are we going to bail out such and such it just seemed like you know Patchwork almost like just Shoring up the ship you know yeah I think Luna probably hurt them a lot more than they allude to as well interesting how I just I think you should zoom in even more on my face look you just kind of give me a minute every time somebody joins I have to redo it all so I'm sorry come on we've got to get Sandra so do you think surely some tribe knew about this right like he left how long ago six months e August okay so not even six months like I think it was even earlier than that it was more like he was phasing out slowly but steadily I mean that's an alarm Bell in itself isn't it really you know especially timing wise it was post lunar um and you know what's interesting over the last couple of days you can see it and uh the open interest I'm pretty sure they've been covering a lot of exposure on bitcoin and eth um just the nature of How It's declined it's you know clearly to you upping out of large positions uh you know like a billion dollars or something so unless that's you wouldn't yeah maybe it's Sue Sue's is back man yeah did you oh please did you see the picture I sent you on telegram oh yeah well you'll expect one of us in the wreckage no no no there's another there's a chart oh yeah no I didn't see that he said good morning to the absolute top all right amazing we have an anonymous but uh resourceful tip you want to hear it yeah yeah so FTX collapsed because they bought U. S equities with customer deposits equities dumped and there were three billion dollars in the whole Anonymous what that's even stupider than giving it to Alameda they bought you a secret no what that makes no sense they didn't even pump ethereum for us they could have bought ethereum with customer phones over and over what did they buy I don't know if it's true or not just not a not a complete Rando or anything like that just insane that would be bad and it's just the whole you know it's just how it makes the space look as much as anything you know yeah it's just kind of embarrassing isn't it we're all great jail speak for yourself I mean you have all those like super what you suppose I guess smart people and yeah they just blew up one after another especially Sam like what yeah what the hell I don't know I wonder what stocks they were buying do you reckon they were like buying Peloton maybe that was their steak in Robin Hood he's probably like uh Soylent and uh impossible did you see um Robin Hood like dumped 10 in the middle of all this stuff happening I was allegedly got a billion dollar stake in Robin Hood sold it sees his next acquisition 7. 6 stake in Robin Hood I don't know um do you like where do we trade now that's what I was saying earlier you're making fun of me sorry that's my role in this relationship I don't listen to what you said and then I make a joke about you um but what where do we actually go because like I'm old enough to be like not super comfortable on finance our new sponsor um do we go back to bitfinex um you can't use it can you Ledger um okay do you have to buy bit support it will help the moon car launch caster so I'm gonna go buy a bit yeah for Americans it's like if you say if the whole U. S side of FTX has also wrecked I don't know there's coinbase it's Kraken there's Robin Hood client base coinbase like freeze your account if you don't have enough if like they have the same regulations as a bank right so you do deposit and then they've got to like explain where it comes from before they let you trade which is not super convenient Gemini the Winkle vehicle liquidity they got to come back from their uh Rock vacation all these people who like shall you know like femex or you know those like weird yeah like seeing detail exchanges like they're [ __ ] loving it now people are actually going to trade there the book that's pretty impressive as well some of those exchanges yeah see next it was like second highest volume the other day or something um take that with a grain of salt yeah um has anyone ever used KU Klein they always seemed quite dodgy uh years and years ago that's where I sold uh what's it called um the one that mooned and I sold it in the bear Market a16z synthetics Kraken I would go Kraken but in the bull market Kraken Wicked down like 90 a few times so if you used it with any sort of sophistication or complexity you just got stopped out over and again for no reason yeah like every three months Bitcoin or ethereum would just like Wick down to zero yeah Krakens Widowmaker Wicks were ridiculous it's a feature didn't Jesse did Jesse step down is he one of the CEOs who peaced out I think yeah and then there's a coinbase guy as well the other day coinbase who at coinbase we've got that many titles some managers manager or something but um at their earnings out yet so I miss their earnings I think they were getting wrecked on public markets maybe Sam was selling coin too this is more special this one big it's just one big Ponzi isn't it really oh it's only down one percent today it's at 56. but it's probably like three to five billion active money moving around and the rest just [ __ ] leverage since on I mean coinbase ipo'd at 400 and now it's at 56. so come on can we trust coinbase can we trust uh Robin Hood Finance coinbase locked my account for like 12 months once wow with a load of Bitcoin on it but it was locked for the entirety of the bull market and they unlocked at like 62k nice really they gave you the assist I mean really self custody is the answer here in trading on chain is the answer but you still have to have a onboarding and off-boarding venue mom I mean I don't think binance having 90 market share is a very good thing I think it's good for Traders yeah because binance bucks are good but no no I mean uh for actual data and Order flow you know if it was just like a sort of all-in-one centralized that'd be so good it'd be amazing to be honest um you know it's like an ethical thing isn't it it's you know monopolization isn't good but hey you think we can go Snowden on but right now yeah he's been talking to crypto Twitter and stuff constantly recently he's got he's an account he's got a crypto Twitter account he's been talking to people Snowden are you watching Edward Snowden look we need your thoughts like news new sites um taking clips of this and just like tweeting them as like a scoop that's like it's like these random rumors that people have been dating me just in finance bar FTX for one Doge on a News website somebody bought some somebody did do the SPF underscore BNB nice come on do you reckon um samtrabs is watching the podcast yeah he's probably got snacks and like just laughing someone just saw me he sold his Robin Hood today so that the thing was him I don't know how people would know about these things but um well the temps and dump was just him Market selling oh this is special all of this is speculation we don't know what's going on until someone tells us we might never know to be honest if it's like genuinely um like bad fraud it will be like a long time so it comes out in a Netflix show or something oh you know I will know Michael Lewis will have to rewrite his book I guess yeah he was doing a book about SPF wasn't he I mean the book just got really good yeah yep maybe he knew maybe someone's like bro have I got a

### How does this keep happening? / How big is the liquidity shortfall? [46:20]

story for you man who knows what uh what happened with bit Dao that's the only thing I missed well they said it wasn't Caroline said it wasn't them but they owned 100 million worth of bit down and they said they were never gonna sell and then somebody sold 100 million bit doubt and then Caroline was like nah that wasn't us and the bit down guy I said okay that's good to know well that but they don't I don't know who sold it I saw it I said so somebody tweeted that the Venture fund sold it yeah like their own Venture from their own Venture fund yeah like no they just withdrew from FDX I don't think they sold it but they the reason they figured out that they might have sold it was because um they was less than 100 million on FTX and Alameda was supposed to hold 100 million so it looked like some had gone somewhere but apparently they just moved it or something maybe they sold it and re-bought it um some tribes is just tweeted let's see what he says surely so when Caroline was going to buy this two billion dollars or a billion dollars of FDT or whatever I don't know she was gonna buy it with my deposits on FDX I don't understand was that bravado is that a plan Sam said much love to everyone I'm sure the past few days have been dark for many and I hope the road ahead is brighter hmm man how do we keep doing this how like just run a normal business it's greed and complacency it's just like his tail as old as times like unless he's just a Wall Street Plant in order to break the system from the inside maybe that's well you know who don't quote me on that I didn't say that don't probably gonna get sued now I think he's um parents are like really into politics is uh um well I have slightly long bells when you're getting Tony Blair and Bill Clinton to your [ __ ] conference you know yeah his mum is co-founder of the political fundraising organization minded the Gap um and to get out to vote organization including the center for voter information um buying U. S equities that can't be true if that ends up being true then I might be done I might just go you know what we've reached a new level of stupidity let's put all of user funds into stocks and then lie about it this looks like it's from the financial times not sure just the beige thing I'm just gonna throw it over else faces so is the Lana going to zero hold on yeah what happens with Savannah I'll find out in the hours before securing an emergency Lifeline from rival binance crypto exchange FTX was canvassing Deep Pockets in Silicon Valley and Wall Street billionaires not institutions one of the people said ftx's founder Sam bankman freed a semaphore investor was seeking more than one billion dollars but by midday Tuesday the hole looked to be significantly deeper that's a tweet from tier 10K shout out DB and then a response to that said it was closer to 3 billion as far as they know so it's three billion Jesus do you reckon this is the worst opening curse result of all time Legend yeah it's pretty bad Jim did you even get enough only curse didn't you after the chicken no I was good it was good yeah cool make that chicken was good um no I'm the only one that survived it so I'm gonna have to make a bold prediction today too um yeah they managed to get hacked right before so we probably yeah fine yeah do you remember when um CZ left uh okay coin and there was the real big drama happening because like it was between the Sea of okay Klein and CZ who is the CT of okay coin at the time um and there was this big drama because like one of them stored the private keys for the exchange and like the mum's wardrobe like it was hidden and like I can't remember which one it was but it was there their mothers like at the bottom of the clothes was um the hardware wallet with the cold storage end and I don't remember which way around it was I think CZ was complaining that was not a good system but um the CEO was like not updating it I just wouldn't change it I miss those days man I'm at a loss man who's going to fill that hole of liquidity as well it's a big thing wait apparently snowden's tweeted something what snow isn't weird he said he's ready to come on probably not yeah I don't see anything they said I just tweeted a picture of Cece's face that's slightly photoshopped into a smile can everyone spam him and ask him to come on up only please um I'm sure he's got nothing better to do Arthur Hayes just dm'd me saying would you do a show just you and I about the FTX Finance [ __ ] later today it's 5 a. m but yes yeah it's now almost six I guess it's the morning I can just stay up um how does he even he doesn't even follow me what a [ __ ] bastard I'm gonna say unless no unless you follow me back Arthur doesn't I don't think he follows anybody does he is any one of those zero follows people uh all right maybe eight hours from now after um all right I can like go to sleep and then wake up and do the thing straight away um maybe SPF posture off a roof dude you're too tired he retracts that statement I said maybe oh maybe it's the same as allegedly legally in it anyway Arthur if you're listening I won't say nothing like that when you come on I promise it's just like 6am and I've been up for a very long time um with very large glasses of whiskey um is there room for a

### Could a new player emerge? / Sam Trabucco [54:00]

new player a new exchange to fill the void to your point Jim like somebody that's going to take a public stance I mean this is going to get us a lot of Investigations and drama for a year or more uh where's that money gonna go I think you know buy a bit potentially could see an uptick you know they've got their spot markets and stuff now maybe you'll see liquidity go over there they're also playing the unregulated route right mm-hmm but yeah as far as I don't know it's a good question really what's the worst thing that Bible's done recently well it's like what's the if like you were gonna try and fight um buy a bit what would you say does anyone know s yeah I'm sure I think they have had the benefit of fourth place or whatever right like they just they're not under the microscope so they get to get away with stuff that others don't I think that yeah I think that a lot of um when you're a smaller exchange you do stuff and people go yeah I mean they need to get some volume somehow right like they you list like total dog [ __ ] coins or um you know do ideas with like you know nonsense projects but then all of a sudden you're big and then you have those things in your exchange forever um so so who knows maybe they do stuff and it's core but if they were second it would not be cool is there any route let me message to see of Bible and ask him Ben what do you think the worst thing I illegal that buy bit has done is I just wanna talk about it on up only Ben's gonna reply frowny face maybe we all go back to bitmax and bitmax wins the Redemption Arc of bitmax I mean they did their they settled all their stuff didn't they like they they're in the clear they just they were too late with uh usdt derivative that's you know it wasn't just that it was like the full-on uh yeah but even still I like it took them a long time to implement that and they kind of missed the boat you know those because the interest was gaining traction at the time just after where you saw people sort of use USD to derived contracts um oh my God Snowden just replied to the Suzuki about joining this we're creating a threat of God we just need Elon in this thread now he is can you both join the podcast Within the next 30 minutes thanks well that'll probably work out well I'm sure that will happen um how is I don't understand how Sam Travis is not like [ __ ] himself now like he didn't he like bail him by a boat well I mean he probably is he's probably stowing soon Kyle like probably 40. together yeah you've got a web link below that there's like a collection who was on this boat somebody draw this up Sue and Kyle's boat goes on it dues on it they're like off the coast of Dubai somewhere yeah in a yeah on Chad Ward that's I think that's starlink for the internet connection they're all they're doing all right maybe I'll ask Susie if he wants to join c z do you want to come on up only we are sober um oops oh God I'm just causing problems what did you do I'm just sharing the screen of every tab I have open um can Sam ask for his like withdrawal is um Depo is uh donations back like can you go to like the partition and be like bro my bad remember you don't want the money anyway it's like it's proceeds of crime my bad allegedly proceeds of crime can I get it imagine being finals by SBF and then there's a couple of pains like you might be in trouble now yeah What's um what's Solana doing is it just going in a straight line downwards um probably how is Justin's son Immortal he's outlived

### Solana / Can FTX come out of this? / Jim’s trades [59:15]

everyone just swoops in at the end and takes on takes them yeah it's Paulo's opportunity to come back doesn't he own it now yeah uh Solana is down 10 26. 80 back to 15. uh this is just like I guess I'll maybe have got billion dollars of Solana they need to sell at some point yeah I don't know got just a line of chart just looks like people are getting destroyed over and over in every direction is there an Avenue for FTX to come out of this with any degree of credibility I mean it depends what happens right we're just saying stuff on this we're like we actually don't really know what's happened I don't think SBS actually pushed someone off a roof um or like who knows what the [ __ ] happened um it's going to be interesting to see how they restructure you know binance restructures it as you know whether they're going to keep it as its own entity sort of thing and it might end up just being a better user experience with the same you know might even be more liquid in the next year with balance his input well FDX does have a much better like actual UI than binance is so [ __ ] confusing um FTX you make a drink by the time you've [ __ ] all together copper yeah um yeah but I banish you I get lost I'm like where the [ __ ] am I what am I doing um but yeah I mean maybe I'll leave them separate surely the FTX brand is like pretty wrecked though yeah foreign right uh yeah FTX us yeah they become something else all right so here's a good conspiracy if you know that if you know the person it's a PR take I guess if you know that okay CZ didn't buy FTX this is someone called mayazi binance bought time for the crypto Market to calm down and let FDX find a buyer to fill the hole and whether that's binance buying time or FTX buying themselves time uh so he says that the letter of intent serves as a placeholder for a proper buyer to come in due diligence a bit like what FTX was we're doing a few months ago really so this purchase yeah literally it's very similar to what happened with uh blockfi yeah the question is it like block five where things were on the up and up but they got wrecked or is it things were done in properly nefariously against terms of service uh without telling you know proper disclosures and there's problems that's your biggest Gap if it was on the other day you know they can recover you know it could be a situation a surprise you know they just need time for the withdrawal process to sort of cool off because yeah I bet that you know well they are clearly struck for cash now due to the amount of withdrawals yeah but they technically must have one-to-one like because the only reason they might be in trouble as well says they cannot do one-to-one yeah well but I'm saying is it one-to-one hat to hand you know is it one-to-one is in like instant fulfillment if you know what I mean maybe they have like Cold Storage I don't know somewhere right they're Barrett and Bahamas I don't know they need a day to dig it out I don't know but it's on the boat itself well yeah was it simply stupidity or fraud or something or both yeah I think Fraud's stupidity sometimes I don't think you go out intentionally committing fraud it begins yeah fraud begins with stupidity mm-hmm and it's amazing what people do in desperation you know like you just you pretty much do anything I mean it's very crypto saying it's like megatoll in one trade kind of sound right yeah is it here just like me come here I turn myself off because I was typing and then I forgot I'd done it um all right well dokon's joining us now so oh wow I really need to use the restroom wait to configure the screen for dokwan who's apparently joining us but um I mean who knows if this actually happens I've sent in the link I wish I was a little bit more sober to be honest are you drunk I wish I was a little bit more drunk don't worry you were last time yeah foreign all right get ready to move some screens around and then do it all again if taekwon joins then we get Snowden or uh SPF to us easy to join this is the last stream ever that's it we retire I think all right for my sake then let's not do that uh so you know what that one is oh my God LOL D5 just posted the most [ __ ] Banger tweet I don't think I can even retweet that it's so [ __ ] it's so good but so bad all right dough come on do it Snowden hop in Sue let's go foreign if you've been suspected of criminal Behavior or charged with it just hop on the Stream oh [ __ ] almond snowden's already top right how do you pronounce your name evgeny yeah that's perfect wow being from Alabama had a very low chance of that yeah that was impressive man all right despite my pleas for more sobriety I need to go um yeah I'll return momentarily hopefully dokon joins while I'm gone Jim have you made any trades or do you just play golf every day yeah I made a trade uh oh I showed ftt at like 20 what was it I don't even know what the price of 22 wasn't it that epic battle oh you just shorted right at the yeah it just it was just it never it was just one of those inevitabilities that it felt like it just felt like I had to join in so and then yeah I showed eth from 1600s close that this morning and play golf oh I showed Matic as well like 1. 26 it's medically bananas man their business development team is obscene like they just get all the Partnerships I don't know much about it sort of fundamentally to be honest but it's been pretty fun to trade it's been good Sushi's been pretty good too yeah sushi uh went up from the horse story that was the bottom for sushi oh I for a minute I was like this is going to bring the whole crypto Market down it was like on a knife edge and it would have been iconic if that was what broke the horse's back so to speak oh man somebody said Sushi's still a farm token in the chat that was confusing I was walking through my house just listening to you talk like I was listening to the podcast instead of hosting it um have you any of you do y'all take anything directionally are you purely Market making no they're like yeah no way it's near indigenous those other guys depends with respect no I mean we do all this adventure stuff it's generally produced small so it's either venture or delta neutral on active strategies yeah okay seems reasonable seems like maybe that's enough risk you would think so right it's I like all this time I was thinking like what are we doing wrong those guys are climbing up so far fast I almost think some of these guys like I don't think I almost think the market can't facilitate that kind of size in a directional way yeah you know you kind of get trapped very easily with you know like it's very difficult to exit a position of that magnitude in this market no it's about right impossible like we do this whatever 100 plus million Solana trade back at the height of bull market and or stuff like yeah get rid of a billion of ftt yeah it will take you months yeah all right I'm gonna mute myself and you know take care of business if Duke dough comes on I'll just have to wait just take us with you take the camera uh I can't it's like hooked up you know I can't do that just gonna say no yeah that's the reason it's so tough too much peer pressure coming foreign seats imagine how solvent they would be now if it had given him the seats um so I wonder how big the hole is like how much customer deposits get haircut if no deal comes through like if the letter of intent is void after due diligence an FDX employee messaged a group chat saying um it the deal definitely won't go through in his opinion so if they're not one-to-one and a deal does not go through do they get wrecked also Zane who used to work a bit for next now works FTX was tweeting the terms of service the other day saying that um they don't invest or loan out client deposits so if he didn't if he knew that's a lot of legal liability to incur by lying which suggests he didn't know I think there's a hole that big like it should have been very few people yeah oh Dave corn is actually joining and Legend's not here to accept him someone outside wants to joined oh we finally get the rock. com right yeah where are you man Jim what are you gonna chat to do about right it's a good job we're not doing this for this song well not his biggest fan he said ask him to die it's a ledger at the toilet I can't wait for him to wax her kind of about systemic risk oh man this is such a bad idea oh he's here what could go wrong this is such a bad idea hello hey what's up yo oh my god oh Quan he's actually I didn't I did not expect today to join Dale what's your take on

### Do Kwon joins / LUNA collapse and aftermath [1:12:20]

the FDA hold on we gotta at least we gotta get the video all right fix the screen oh uh my video is on do you guys know yeah no need to just arrange it properly I have to pull you on here the stream doesn't believe it yet but they will foreign wow that's bad I'll try to redo that what are you drinking um what does it looks like I can see what it looks like piss uh it's whiskey looks good all right welcome dokwon is it fixed are we good yeah everyone can it's good enough I'm fixing it more all right so though I I hear you like on the run or traveling around countries illegally or are you just chilling is it all false uh yeah okay come on the run but um I don't think the background's a bit suspicious yeah I mean I don't I it yeah are you on a boat with the sound right now yeah um what's your take on the FTX stuff would you have expected this uh so I mean I have been following it too quickly but from like a cursory you know scan of the Twitter timeline I think the unfortunate situation is um they I don't understand how a hole was created when just hours ago they said you know they don't invest user funds but having said that I think one of the things that um you know people need to appreciate is um probably I'm assuming that running an operation you know of ftx's scale and doing like Venture Investments and trading through Alameda and stuff like that is hard so um you know [ __ ] happens all the time and um doing effective crisis management is not easy um but you know just from like the hate that's spreading across the Twitter timeline it doesn't it it's it doesn't really seem like you know average users understand the complexity and you know um the stress of doing something like that yeah but does it excuse being like completely ridiculous with no no I mean it's not to suggest that yeah doing things with you know user funds you know I'm not speaking about it from that angle I'm just you know it's hard yeah so it's a it's a multi-dimensional type of thing man what a weird [ __ ] Year dude I mean they get less and less predictable what's going to happen next uh Jim what's your prediction for the next blow up one two for two one mile Before Christmas yeah I'm two for two who's gonna be next well you've got elevator and uh three AC yeah no I got dokwan 60 billion dollars it was 16 million dollars who's next I don't know I'll ponder I'll let you know what's the price of ftt 15. 12 11. oh so dude do you have any catching up to Luna is it really down to 11. dude you have any crisis management tips for Sam um well I don't think I did it particularly well so um I don't think I'm the best person to ask for advice um but but you know I do think situation was a little bit different so um you know like if you read the media coverage you would assume that like Tara was like a hedge fund that blew up 60 billion dollars but it wasn't like that most of it was beyond our control like we the protocol worked as expected yeah I mean we never like offered to take user deposits or anything like that and like the network was so large so you it's not like you can suddenly like look to a blockchain and say hey look we're gonna pause with your allergies right so um I don't know like I mean I spent some time looking back but like but that I don't like had y'all made that governance vote and actually stopped to the like death spiral to zero it probably would have saved some save some money in hindsight if you could have taken that sort of control wouldn't it have made a difference yeah but like a governance proposal takes seven days and all of this happened over three days right so um there's unique inefficiencies of a layer one that just you know doesn't exist in centralized platforms but it seems like Sam's can be fine like if what like yeah on what well I mean if it's just like a acquisition right so I'm assuming that the sale price is at a you know reasonable discount to whatever the private funding round was but um like if CG steps in and makes users whole and things like that there's no reason why like he would be in any meaningful distress we'll probably move on to something else what do you reckon he'll do next would you invest in an SPF startup yeah well I don't know like I'm not really much of an investor but um you know I think it's too early to tell like usually with these things it takes a while to plan out and for people to get to the truth so um but you know I think for things as they are um oh someone's audio's gone or maybe my headphones have gone no I think everybody just got quiet at the same time we need a moment of silence oh man this is the stupidest day of my life so just I uh seriously what do you this is an FTX day but doe you're on the show like what I gotta turn on the airplane it's so hot in here back inside yeah what what's going on like what do you do after the fact are you back to building are you trying to figure out like what you can do for the community or trying to what are you trying to figure out now yeah I mean so I would say prior to me you know for like a year or so before that um I had my entire calendar filled up in let's say even like 15 minute increments and then like most of my time was spent from early morning to late at night on you know just what I like to call politicking so it just you know calls without specific agenda right so it would be like some other company that that's you know working in crypto or it would be um yeah it's a complete waste of time and like getting back to email like you know some warnings I would respond to an email from like 7am to 10 and then by the time I got to the end of the inbox more would fill up so um I feel like I wasn't very productive but now um I don't really have that many calls so uh you know in a really strange way um it's sort of given me a lot of time and headspace to you know think about interesting things to do and um you know I had to code it in some time but um you know just picking up on projects that I think are interesting and um it's um it's fun how's your family taking it uh not well okay no um well I mean I think they've been incredibly supportive um and um you know throughout the situation I think what's been really helpful is like the support of uh you know uh people that we've worked with for years um and um I think just so the bad publicity is just made it really hard for them to you know publicly seek out um in favor or in defense of what happened uh with UST but um I like to think that for people that we've worked with for a long time we've had an opportunity to display our character and um our you know not good intentions so um that's sort of been really helpful to keep going during times of crisis what yo I just sweat out I just want to point out that Kobe flat line just right there yeah he's done he's done over there Kobe's been rugged um okay let's go back at what point were you like looking at the Peg and saying hmm people have brought up you know some of these potential issues with the algo adjustments and the potential spiral risks you go back seven ten days before when there was a chance to kind of reconvene figure things out or even there was a whole plug that was it by jump I can't remember um with some warning what do you do and how do you manage it differently so I I think there's a there's multiple different things right so but um I think the issue is we grew like USC grew a lot um on the back of you know a massive bull market right so um I think at one point UST got close to 20 billion dollars um and I think you know during that time um it was you know like a lot of Leverage and Bubbles built in into getting to that 20 billion dollars so you know that's saying like what what goes up quickly goes down quickly um or maybe it's like what comes around goes around or something like that but it's the Eiffel Tower chart so yeah so I think if you know um there should have been like plans to build an exogenous collateral more quickly and then at a better timing right so it's kind of like the worst timing where um by the time where lfg was formed and we were you know trying to build a certain collateral to be to diversify the backing behind UST uh that's when the crypto markets for peaking um so you know you sort of had um you know an effect where whereby like as the collateral value was collapsing like people were getting out of UST because they were afraid and things like that yeah so uh from a mechanism standpoint there's multiple things um that come to mind do you reckon um that your bravado and Persona uh contributed to the situation as a multiplier um or if you could change that uh sort of going back in time do you think you would are you cool with how you uh handle yourself so I think I mean so like a case in point a lot of people think that Tara was started in 2021 or 2022 or so and that's I guess that's because that's around the time when there's so that we can notice a wider crypto community but uh we actually started working on the project in 2017 so it's been around for a really long time um and I don't think that like what happens to USC would have been any different like if uh um like the way of looking myself on Twitter right and actually like how I am in real life and how I'm on Twitter is pretty different um but I do think that it added fuel to the fire when it came to the anger and the Optima and that is you know pretty evident um you know like as a as like a one-nighter and self-defense I just sort of started to [ __ ] post when it became popular uh during D5 summer ish like in 2020 um or so and then um you know generally over time like you should post when you don't think you're that important and then as you get more importantly if you sort of grow out of it right but uh for me like I started to [ __ ] post I know just getting used to it when Tara just you know rocketed to like 120 and one of the largest layer ones and things like that so just as when I was thinking that I need to grow out of it that's when the detail came so um you know these things are kind of tough right because uh at the same time like um there is value in being entertaining and funny so um you sort of think that you know it's okay and acceptable to do it but then again at the same time uh you know like how you compose yourself is received differently by different people when I mean what do you think about it about what how tall was the hit yeah what about that sure no I mean look in the list of whatever villains was this year door is moving like further down and down like it's not that bad anymore I guess compared to like Alameda and three arrows and yeah she was a bit cocky but a bit whatever Jim what are your thoughts um I always thought day was very dissociative like almost gamifying the thing that he's building without any sort of potential ramifications so the impact it could have caused to people you know almost sociopathic I would say to be blunt because I'm not a huge fan to be a person and as far as dynamics of the whole thing like I don't think you can model something that has consistent sort of influx of demand like that's why we have recessions because you know your car is unsustainable model to have cons to need constant demand in order to keep something afloat you know so it's kind of a foolish Endeavor and in the first place in my opinion you know like say you've got so you've got 100 people it's like you know the market is that on a grand scale like once you get up to like 90 people have bought in then there's only 10 left and that that obviously flips to where there's more supply side than demand and you know it's like an inevitability that's going to cost uh because you're going to run out people that are going to sustain the demand you know uh ftt just hit nine dollars down from what was it earlier today it'd be amazing if it went to zero with dough on the Stream be an iconic moment surely I don't I'm not totally sure what the logic behind the dump is unless people don't believe the battle will go through which is probably true and um I mean even if it goes through like what what's going on what's the point of it yeah yeah um did you know they renamed what binance BNB meant to build and build instead of like Finance something whatever it was before BNB stands for build and build now building um sounds like a I did I did not meant something in the first place um does anyone ever think like why did I choose this industry to spend my time in I love it I mean not at all like it's like compared to threat files just fun yeah I know but the only options in life are not crypto or Trad fire they you can do like anything yeah this whole thing goes to zero yeah it's at least you said if and not when it's just it's an Embrace of total chaos which I can only take in doses and we've had like two years straight of the chaos going both directions it wears on you glad I close my ftt short uh this is a gym euphoric right now oh you closed it at 17. yeah sorry man so has anyone got any more good gossip I've got too many um DMS so I'm not really reading them Ledger have you got any given any more good gossip also in my intro Crowley said he will join the um China stream sure he means he meets the qualifications bring him on that's happening what am I even doing here man what are any of us doing here we just came on because somebody sent me a tip that FTX was looking to acquire West Ham Football Club which is really weird West Ham people in the chat keep spamming West Ham but I don't understand the inside joke so I didn't refer to it what is the joke can someone tell me what the [ __ ] the West Ham joke is is this gonna be like a Deez Nuts joke do you know what it is this a winner moot joke definitely not no I think it's uh it must be British right sounds like a British club uh yeah yes yeah football they'll be lucky to get MK Dons at the moment I think who [ __ ] knows um apparently FTX was seeking to raise six billion dollars by midday six billion 6 billion what a [ __ ] show how surely the whole can't have been six billion isn't that like how I guess we don't know how much user deposits are still left um all right I sent for Kelly the link um we're gonna have so many people on this um so everyone's gone I've got to go to bed soon it's like 7am um six billions apparently half of alameda's value I made it was previously their value is zero apparently we still don't really know um their liquid value clearly was close to zero what if they've got loads of money but they just refuse to pay it back Caroline said sorry [ __ ] this is my money now this is your problem so to see Z I'm keeping it what are you gonna do go to the police you were legally loaned us some money to do and when did you know it was over before or after the steady Lads comment so oh God we are later again so like when you're in the war room and all of this is happening um like you're like you haven't slept in a while and like you feel almost um holy [ __ ] is unmarked Australia wow oh wow I mean why not yeah why not right uh bro you look mine you look good dude yeah he's not talking oh he's muted oh I think he's mute all right so before or afterwards to getting snow done yeah so um yeah like when you're in the war room like you're in constant battle mode and like you feel incredibly bullish and things like that and speaking of like the six million dollar rate sorry FTX oh like at one point we were also putting together like an overnight race like two billion dollars as well and I feel like we got pretty close before I think like the new seat then Luna somehow tanked by 50 like really quickly and then the race just wasn't pliable anymore um I think the moments when I like sort of went into shock mode and thought it was over was Lynn um like Luna had fallen so low uh and so people were swapping UST to Luna so quickly that um the um I mean like the inters are data type that's built into the cosmos SDK was not enough to Encompass very soon like how many Luna that exists would be so that that's around the time and then the validators were just saying hey look we got to shut the chain down because the chain is not going to work um when we get an interview or reforms that I think that was around the time when yeah far after the study by it's coming so Martin hey welcome what what's your take on the FTX blow up did you know it was happening are you shocked I'm not shocked I guess um but I think that um the hole is a lot bigger than people think and I think that um there's a good chance binance walks away um and I think that'd be terrible obviously um but I hope the I mean it's very it was really Reckless for FTX to like lead deals in Aptos and sui and like you know Banks there's a reason Banks don't do

### Martin Shkreli joins, and shares his thoughts [1:37:10]

that right like Goldman Sachs and you know it doesn't sit there and say let's take all our you know re-hypothecated money and put it in the liquid stuff the last time that happened was Lehman Brothers they once called me um asking if I wanted to buy Brazilian Real Estate and I'm sitting there like wondering why is Dick fold personally trying to sell me Brazilian Real Estate um you know when stuff like that starts happening you know it's disaster so it's really funny that you can go from being the bailout Giver to the bailout you know recipient in like a matter of a few months so it's such a crazy thing I mean there's no words for it really I mean it's so wild but it's good to be here and hey doe um I just wanted to let you know Jail's not that bad it's um it's not the worst thing you know so don't fret if that I hope it does happen but if it does happen it's not that bad good to know I mean you haven't been to South Korean one though oh my God what why Mark Martin why like why do you even get in crypto just like you haven't had enough drama and ridiculous [ __ ] in your life and then you get into crypto I mean I've been around the hoop for a while just quietly I mean I can't make too much noise while you're in prison I started in around I started around 2014. um so I've been sort of like Shadow you know I know Kobe knows my other one of my friends that is in the space as well like he and I have been doing uh this stuff for a while um can't say that you know it's a fascinating space I love software too so I do a little software um I've been doing software since I was a kid I write software I make software I have a couple software companies so it's a really nice tool set but I don't think I don't pray to the like defy Gods every day and like I think that crypto will change some things it won't change a lot of other things and you can see after today that you could imagine like if an entire banking system got drunk or high or something this is like how would it would bother right like you have real adults in the room you know in real Banking and maybe that's because of regulators maybe it's not but like JP Morgan say what you will I hate them but like at the end of the day they at least are somewhat adult-like and how they you know sort of do their things and maybe it's easy to say that today when you're in 2008 you could have said that about Lehman or bear stars of Merrill Lynch but you know this Reckoning hopefully will teach people and again the biggest problem is we don't know what binance's balance sheet is like why are we trusting these guys you know and it's a CCP appendage so at the end of the day like you know this is all now like devolving into a lack of transparency so I don't know what will happen but I hope um I guess the good news is the protocols themselves are working right they're not breaking and everything seems to be you know kind of staying still but I think unless you have participants joining the market you know continuously defeated and sort of disperse and distribute capital and tokens you need that for the stuff to survive so I don't know we'll see I love I like crypto as a concept as a like a stock price prognosticator asset price prognosticator I would I mean it's pretty I've been bearish since the day I got out of jail it's still bearish I think we have a lot of problems ahead of us but in the long run the software is great stuff so do you think FTX and three AC unit Etc are actually bullish defy you have to separate usage and value you know from a usage perspective you could argue that this is actually kind of you know all working out pretty well from a value perspective and like a governance perspective you have a totally this stuff's a big problem I think you know you're sort of seeing that you know there is no honest actor in crypto every time we sort of pull the mask off somebody there's another mask to pull off and is binance going to be you know bailed out in six months we just that's the big problem they need to show a balance sheet if I mean when you invest when you put your money in interactive brokers or whatever like I don't know you but I look at the balance sheet and I say yeah it looks like they're solvent you know like I want to know you know what I'm putting my money into because the point of a bank is that they take your money they make some loans God forbid they make some investments in liquid Securities but they're definitely not supposed to take your money in invest in VC stuff I think that's you know kind of outlandish so we don't know what binance is Donner hasn't done and it seems like he's a rational actor but just because somebody's Twitter Persona is rational doesn't mean that you know uh their balance sheet is solid right you can sort of trust Jamie Diamond in a way I don't but people do because they think he's a good Steward of capital so who's is CZ the best sort of capital I don't know you guys were not better than me it was a while ago um maybe he's just got better at hiding it who knows according to uh Wikipedia Federal prosecutors once said you engaged in multiple schemes to enscener investors through a web of lies and deceit do you see behavior in the market today that makes that uh feel familiar to you that you would not be surprised if uh similar activities were occurring amongst the drama that we see well I take deep uh you know sort of offense to that as you know not you personally but the so-called prosecutors I mean I was acquitted of most of my charges um all my investors made three to five times their money so you know in terms of uh to see you know a lot of people ask me if they could be deceived more Daddy because I was a pretty good investor for their portfolios but regardless uh I would say that um you know clearly there's there's a lot of sort of money grabbing and kind of you know lies and to see it out there I mean I think that the saddest thing to me is kind of like the protocol violations when somebody can like sort of grab a bunch of money from a protocol I think the code is the law Thing versus you know um you know kind of uh the laws law uh it's pretty hard to sort of determine it's it's really fascinating to watch right it's sort of like a pseudo-legal bank robbery I find it really fascinating but I don't I you know I don't know exactly how to answer the question I mean I certainly you know fraud when I see it I used to be arguably still I am a good short seller where I find fraud and reveal it and there's been a lot of notable traits I've done over the years um that you can look up but so I think that there are more sort of zeros coming I mean if I was just on a podcast you know as soon as this was breaking talking about ftt being the zero but I think there are other ones um you know in fact I think most cryptos will eventually go to zero but there'll be a handful of winners just like the internet um you know where the internet's landscape in 98 99 2000 2002 2004 was basically the same exact thing what we're seeing in crypto now there's a lot of excitement about this new technology thousands of companies entities tokens whatever Sprout up to take advantage of it five to ten kind of survive and I think that that's probably what's gonna happen here you know you mentioned you know uh you think FTX was probably put in um customer funds into like locked Investments basically uh why do you think they did it just try and milk an extra like multiple out of the deposits like exchanges [ __ ] print money it seems like you can just run a big exchange and live a happy life why coin flip it for a double basically it's a really good question in fact if you look at what happened to Lehman on

### Was FTX using customer funds? / Potential legal ramifications for SBF [1:44:50]

those companies like that's exactly the question everybody asked like just be a [ __ ] bank you know or let's make some mortgage loans right and there's this pernicious Chase of yield without understanding that you're chasing risk too so I think it's just greed and you know the desire to be big and be successful and be ambitious and they say it in the Super Bowl commercial what it is right go bold or you know fortune favors the ball foreign do you have a connection with Snowden we're looking for people who've been either convicted charged uh accused um gyms like Jim sitting at like I'm good man I stole it Fredo I stole a Fredo 20 odd years ago yeah it was like I just shorted all your companies that's all I did laughs man I still feel a little bit like it's like like SPF might just tweet his account got hacked or something and it's not real um I I yeah he likes he seems like literally 24 hours ago he was saying FTX is fine yeah I wonder if he didn't know like if there was like how can he not know I don't know if the FTX uh was trading user funds in stocks thing was true then he had to know but if it's like purely Alameda and he's got the wall supposedly between himself and Alameda maybe that made it easy to ignore I but yeah but then still FTX would land though I mean right yeah but if they felt like okay we can recall These funds or whatever maybe it's just like okay if 70 of funds get withdrawn then we hit a crunch period you know some number that seemed catastrophic and impossible yeah but like FTX had like 0 is 12 like to build and they made some money as well I think from user fees so safety seems that like maybe two and a half okay let's say two after all this like Stadium span like Alameda should have borrowed like 5 billion for them to be distributed in the whole that's a lot okay this is getting impressive I gotta go guys bye dokwan thank you for joining us so to his next destination and he just [ __ ] leaves uh you know all right I'm gonna reorganize again well is that the first time anyone's heard from goquine in months why did he join okay it was a lot of sin so uh like a few weeks ago all right so he's back on the circuit it's because I can tell you from a Colonel's perspective why now can you hold on a second before you see it's because now with SPF there's a good chance SPF does a little time yeah I hate to say it um you know again I don't want to see anybody go to jail because it's it sucks but if people don't get 100 cents on the dollar here SPS probably gonna do a whole time you think that's what it's correlated to is whether they get 100 cents on the dollar if you basically were the architect of an Empire that took people's money and then didn't give it back to them that's all they need to know right they're gonna find some law that applies to you yeah that's all what it is fire fraud Securities fraud I mean there's it's not hard to build a case and nobody's going to look at Sam bankman and say uh anything but guilty man I wonder how many people know knew I just are in the company knew because I'm surprised that Zayn was saying like his like posting the um terms of service and stuff um also uh what's the Alameda statement is there one yet are they just like silent probably they truly everyone knows that they just lost loads of money now because Sam who left five six months ago said much love to everyone I'm sure the past few days have been dark and I hope the road head is brighter um Caroline hasn't said anything she tweeted to a guy uh yeah Ben from by bit um hasn't said anything else I would love to know the details how did they blow up what did they do wrong where is Sam's account is it under FTX sound yeah there it is I don't think he said anything new has he no SPF or yeah he stopped with the threat oh he's like lawyers run that to her account now I reckon yeah so what's the deal with the US side of things Finance us and FTX us are two separate companies are not currently impacted by this is what he said the thread before um like there's a blow up thread and then the latest thing is him retweeting someone saying can't wait for my FTX airdrop for not moving any of my funds oops that's quite bad in it yeah I mean they changed the narratives uh yesterday or the day before basically saying like get off our lawn everything's okay we're gonna get back to business which was where were the Where did the lies begin I think they said that they started out the day looking for a billion and the rumor is they did ask Elon Musk for money which is amazing man just spent 45 billion dollars what's another one or two right and they started with one and that and then I guess by midday there's a new news company that's reporting that they were asking for as much as six billion so Jesus how do you lose 6 billion I'm at a loss today yeah me too Mom I thought that Alameda was a bunch of MIT Jane Street two Sigma whiz kids that were just like printing money using the smart quantitative investing strategy and they could make you know 10 million dollars or even 100 million dollars or whatever it is a day or week a month and it was just this consistent profit engine but I guess it was just a [ __ ] you know first I don't know yep I think they did it for a long time that and then they got oh they're just bull market Heroes no I think they were delta neutral through the prior bear because they they played the kimchi premium or whatever in 2017 right that's how they got their stack and then they went delta neutral throughout the bear market and they went directional with Solana and ftt and stuff in 2021 and if they blew up then it had to be on being lazy with your upside being um so extreme that you thought it was safe to borrow against it or do whatever else and they didn't recognize how dangerous that position could get oh my God today is a Blood Moon total eclipse did Marin win again Marin won again [ __ ] the freaking witch the tick-tocks for all those who want to know a couple more crypto criminals um so both um chat well we've got a little you know we all stick together so yeah Virgil uh is in good hands he's over at uh a prison with a bunch of friends of mine they're taking care of him so he's doing nice that's sad that that's what that one yeah you want to uh get anything over to Virgil or whatever just let me know um I know all of his uh takers here you know he's got some he's in good hands uh nobody's gonna bully him or pressure him and uh same thing goes for uh Ilya uh and so many other of these guys I mean it's just sad to see how many crypto people are going to prison and will go to prison I think we're just seeing the start of it I mean it's going to be a pretty big Club so yeah they can start down yeah the original one is a very sad though um the other thing that's like common now is there's a lot of like crypto people drowning um with Nikolai and then um I can't remember his name a few months ago as well um just a lot of random drowning happening it takes a few Longs drowning today so Martin what do you think about the big state stuff the coordinated prosecutions or the attempts to squash movements via law enforcement or whatever other kind of quasi-conspiratorial stuff that people could dream up I was never much of a conspiracy theorist and I'm still not but I would say that government which is you know that there is no one government there are sort of elements and factions within government they definitely will use the law as a cultural to to sort of squash or to send messages and things like that and so far they've been actually pretty hands off on crypto I would say um going after only the very worst actors but it wouldn't be hard for them to prosecute whoever they want whenever they want and they get guilty verdicts 98 99 of prosecutions end up in guilty

### Coordinated prosecutions / Legal fallout [1:54:35]

verdicts we have the same track record as totalitarian countries and we prosecute four times as many people per capita than any other country and I think there's been a racial disparity in inequality uh of prisoners when I went there was almost all minorities and there's a deep interest in sort of diversifying the prison population um and so who better to uh put in jail than um some crypto people but again I think the government's been fairly restrained so far uh relative to the amount of crime that exists I do know as I think as far as much as you guys do that the folks like the FBI or the IRS I'm sure you guys saw the other day this guy had three billion dollars of stolen Silk Road coins in a shoe box underneath in the same popcorn tin can sick yeah he stole 50 000 Bitcoin from Silk Road like 10 years ago yeah and just and like just chilled like didn't change his life just had it well he converted his bch air drop for 3 500 more Bitcoin so he's also a maxi so oh so he like also pulled off a great trade what Legend yeah where did he make that trade though what exchange did he use I don't know don't ask these questions but the yeah the feds added 53 500 Bitcoin plus I guess he uh forfeited another thousand Bitcoin worth ish um I was in prison sitting on a prison toilet with my uh Contraband cell phone at 3am and I was putting I was doing blockchain sort of analysis putting different um private public Keys into an Excel file it's just tracking you know different uh I was trying to make a rainbow table for what it's worth but um the second biggest wallet in the entire Bitcoin ecosystem is the Dutch wallet the midfanax hack and that's quite a lot of Bitcoin now you add this the biggest owner of Bitcoin Finance is number one is now the US government by wallets oh my God don't they have like 200 likes who else I can invite Razzle Khan see how she's doing uh did you ghost me people that was actually about 12 hours ago the uh do you wanna the government has 200 000 Bitcoin now right Jesus I think they're smart because they sold the Silk Road at the bottom so without that they would have had more like 500 000 or even maybe over a bit over a million Bitcoins so they were a bad seller at first so they've learned their lesson they're going to sort of v-wop out of this once it's always instead of just dumping it Peter teal or something I really hope Razzle Khan joins she can do a wrap for us the female rapper that yeah allegedly okay great oh are you kidding oh my God foreign I think this one's Gonna Last except this episode has some uh has some zingers in it do you think we'll go until Arthur Hayes joins in seven hours let's grab Elon too what's asking I need listen let's just we'll make it the last episode ever okay get us Snowden and musk and we'll just stop it's over we'll come out with the news it's a very Kurt Cobain thing to do you go out on top I mean you can't just you know drag out Bad album after Bad album you throw out in utero and you're done so I got two questions for you Martin one did you follow Kobe on Twitter when you're in jail yeah I know number two what's the Avenue for getting the Contraband funds in prison how do they do it mostly butts no um usually it's uh I'm not usually it's um it's uh corrupt guards oh um this crazy guy from Seattle reached out to me and he wants to sell me an early Nirvana tape nobody's heard so I might have to go to pleaserdale and see if they want to overpay for that early throw in your counterparty under the bus there they surely have no money left well the members of police are done with like all three AC and Etc won't they so and they haven't done anything in ages they've just gone quiet now ever since dog went um do you think it's a sucker's game to have ethics in investing or should you do anything that within the bounds of the law to win I personally think that there is ethics in investing in that for me at least like for example I'm never Insider traded um even though I've had virtually you know infinite number of opportunities to do so because ultimately like if you're gonna play a

### Ethics in Investing / Where is the ethical boundary? [1:59:40]

game whether that's poker or trading or chess or whatever what's the point of cheating you know if you're gonna play that game now in finance you know the point you're cheating is to get rich but if you're any good at the game you're going to get rich anyway so ultimately just be good at the game you know if you're not so great at the game just keep learning keep studying you know we're all pretty young here you'll eventually get go to the game you'll eventually make ton of money so to me cheating doesn't make a lot of sense and I think there should be some line to draw at the same time like I do think if you can mentally sort of justify it and sleep well and that you think that you're doing sort of a net good service you know from Raising drug prices for example um you know then by all means do it as long as it's legal but you have to have a pretty good rationale and again you have to justify really to one person which is yourself do you ever think he went too far on the drug prices I honestly believe that um there is sort of this ecosystem of pharmaceuticals that needs to exist and that if there's any industry that should like be well capitalized and like you know kind of like just profitable and sustainable it's the medicine we take as opposed to say uh you know Media or something like that you know I think like there are some like existentially important industries and farm is one of them I don't think I did a good job of discussing that and going through that and talking about the importance of Orphan drugs and again you asked a really special question earlier the bill Quan and uh Kobe did that was like well did you communicate as well as you could have and his answer was really gave me like deja vu where he said well you know I was [ __ ] posting at a time was popular should post Twitter has destroyed more careers and more billions of dollars than any other [ __ ] laugh you know just running your mouth on Twitter it's just so easy it's so fun and then the consequences the next day are like oh [ __ ] yeah you feel like you're at a bar with friends instead of posting on the internet like a public internet Forum that basically lives forever um look at Elon he just flipped from being loved and being the richest man in the world now he's looking at a 40 or 50 billion dollar poll who knows I mean I think he'll be fine but you know it's just a very quick like you know insane thing to do so anyway I'll shut up and let you guys do your job I'm just curious because I feel like in crypto there's a lot of people that play on this like ethical boundary of if you can do it and it's not against the law then it's okay versus what is good for the consumer your particular customer um you've been in another industry where you know the price of one pill went from whatever tens of dollars to 750 bucks because you bought the company and secured the ability to do that and patients were the so-called victim there right the ones who had to pay it or insurance company or however that was covered um and so like how do you match that how do you figure out what is the boundary where do I where can I play nicely and for profit and not screw people over constantly is there a an ethical line there that's appropriate yeah I think like I said I think you have to find it for yourself like Michael Dell talked about this as well um recently in fact his recent book is about how to make money and be a nice guy I don't think you have to be a nice person I think the goal is that you're treating every constituent fairly and positively and I won't go through a defensive War for drugs but there needs to be some drugs that are very expensive and that was one drug that needed to be very expensive because there were very few people who take it um and that's just sort of very easily defensible in my view it's very hard to understand and communicate and with the media that sort of a clickbait media it's very easy to sort of shoot questions um shoot people and ask questions later and I think you know lots of people go through that whether it's mosque or others and I think that you know we live in a world where you can get sensationalized virtually overnight um over really something that's either industry standard or quite beneficial believe it or not so if you look at like I guess you know the one thing that's sort of in the air here is you know when people exploit a protocol and say well I was just doing what the code let me do you know that's sort of the kind of I think what we're talking about here whether it be mango or other sort of um chains you know even BNB or the binance chain where you um be a seat where you know people who just sort of yank money out of these uh protocols and I guess you know to me like I personally I wouldn't do it um I wouldn't do Mev uh or Mev I wouldn't do a lot of the stuff where you know you're smart for doing it you know like it's it takes a real genius to sort of look through these protocols and say if I send this instruction and I you know use this and use that I'm gonna have 100 million well great you solved a great puzzle but to me it just doesn't it's too icky for me at least you know there's no net benefit to anybody and my drug pricing uh Scandal uh I really steadfast I believe as a really someone who really knows my industry really well that there is a benefit to higher prices uh at the very least it's the solvency of the manufacturer which is often not easy to sort of guarantee um you know you need to be in business to be able to produce the product in the case of the defy exploits and things like that it's sort of like there is no winner there's just a guy that you know sort of took all this money and ran everybody loses except that guy you know so to me um that's a line I draw myself at but I'm not like saying that the people that do those type of things did anything wrong I don't think that you know I think they're Geniuses um you know and a lot of them are Anonymous obviously very few have the courage to be out in the open um a lot of them are basically sort of hackers for lack of a better term and you know it's uh you know I view these sort of attacks more than anything else but again it takes a real genius to look at these things and withdraw tons of money from them so I applaud them from the intelligence perspectively the markets are speed running it downwards ftt is in the eights the ethereum was 1600 this minus now 1300 um coinbase services are down multiple Services Krakens apparently also down so it's a just a flourishing industry [ __ ] man Salon is at 24. I don't know if that's high or low for slime to be honest because I just never look at it but it was like 32 days ago

### Who else could be impacted? / Lenders and Investors [2:06:13]

so but yeah I mean surely it's worth as close to zero Solana is just like you've got it's just like you're betting that Anatolia is smarter than everybody else and it's like he's probably smart but he's maybe not smarter than everybody else same as ethereum right you bet vitalik smarter than everybody else man what's the next shoe to drop I mean this is gonna have additional consequences there are counterparties to Alameda or counterparties to FTX that's the question Google you will see some centralized lenders potentially being held by this the other big thing is every hedge fund that's marked FTX on their books at 20 billion is now working at a zero yeah apparently the acquisition price was one dollar is addict someone a couple of people messaged me saying it was a daughter um don't know if it's true well if there's a multi-billion dollar hole that would make sense also if the on the FTX side in terms of you're talking about like Zane tweeting stuff Kobe um like if that bridge from Alameda to FTX was narrow only a couple people or whatever that were familiar with the way that they were structuring deals then uh you know it's possible to leave a lot of people in the dark while you're at it yeah it's easy to eat it again I don't know no no crunchbase already has uh the FTX has been acquired by my plans so just a list of the FTX investors so they raised about two billion dollars from the following um investors who probably are having a bad day tiger Global another bad though tiger Global are so bad at crypto investing maybe investing in general but they bought serum they bought like all these like high fdvs like some coins um in January of this year for a 10 discount off spot 10 discount is the worst one of the worst crypto buys I've ever seen and they bought like huge size they are so bad I even messaged the CEO of like Tiger but like let me help you with this you're doing it very wrong and he just [ __ ] ignored me he read the messages and ignored me I got an intro through someone well I can't Chase foreign some dude called John who runs a crypto thing oh okay yeah so yeah the list of the casualties Insight Partners Lightspeed Ventures Paradigm ivp tomasik Blackstone Nea SoftBank stead view he's all did the series C I think the series C valued them to like 15 20 billion oh my God the gains he's just joined what the [ __ ] yo what is going on today I'm watching uh ftt and I'm just using it as sentiments on FTX and sentiment is not doing well everything is just speed running Doom no [ __ ] is anyone trading this like are you where do you even take profit it just keeps going lower take profit that assumes you're on the right side of the trade when he was 18 I said Finance it Finance

### Gainzy joins / Catalyzing the bank run [2:10:00]

absorbs FTX why in the world would they want it's gonna push everyone over to the you know the BNB I mean why would you ever want this I'm not sure why binance would want to absorb them I mean you get free due diligence so you get to look under the hood and then you can just say no and everything dies if they do that is worse it could be just a good customer acquisition cost right for a dollar plus some number of billions dollars a debt you get a huge number of customers you get pretty good press but yeah you're right it might be better off just letting it die the only argument against is I don't think there's enough money with any amount of counterparties for CZ to even hedge all of his exposure so either he has to be even more exposed or I don't know it gets ugly if FTX just unwinds everything like we've already had one contagion and FTX is probably bigger than 3ac so uh not probably so that's poorly Afghani somebody uh brought up to me that was a good point uh Alameda were big borrowers from Genesis um Barry's having a day yeah what's your uh what's your take on potential structural issues there um yeah it kind of depends how much Genesis was able to recall I guess but yeah like any lend at all I mean there might be in huge trouble well I would say might be making it too soft I wonder if there is more of a Trad Phi player involved someone like Blackstone or somebody who got lied to because is Genesis big enough to bolster a you know 20 30 40 billion dollar aggregate balance sheet I mean it had to be somebody bigger than these dinky crypto players I mean who's got that kind of scratch you need tens of billions bro single digit billions not even in the game uh was Alameda borrowing tens of billions there wasn't that much in the ecosystem like if they were doing Caroline said that she that they had that was a partial balance sheet which obviously I don't think anybody believes her but just the Alameda balance sheet said what 10 15 billion so you know four or five of it on the asset side of ledgers as ftt which you can zero out uh you know they and they kind of I think they basically lied to their you know lender or obfuscated that hey we have 15 billion in assets we're Almeida we're FTX you guys heard of us you know lend us uh five billion dollars at Libor plus three or something and somebody did and that's what makes no sense though is why are you rubbing elbows with senators and congressmen when you're literally insolvent like I don't know how cze like catalyzed the bank run I mean the figure they're giving is six billion dollars of outflows from FTX that they couldn't cover but even then it something just doesn't add up like clearly Sam didn't see any of this coming I feel like Sam didn't know or else he was basically the dumbest player at the table well maybe he didn't want to know because he fired his wrist guy or the risk I left but how could you get to that point I don't understand how that's possible yeah I think the Exodus of Executives tells you something I mean the guy the folks who left probably saw that you know who left who you said the risk guide I mean Brett left there's Brett there was um the other Sam then there's the actual head of risk compliance I don't know who that was yeah me neither actually cred does I think um he DM cred before and then credit was the one that let me know like way back but I didn't think anything of it because who bets against Sam the track record of anyone betting against Sam is awful except for like now except for this moment yeah so I don't think this actually happened from the asset Side Of The Ledger lowering itself in value I actually think that the culprit is the asset Side Of The Ledger has liquidity in it it's level three assets instead of what it's supposed to be which is level one and level two assets because the five or six billion withdrawals you can't give people an Aptos token or something and say hey here's your cash you know or nap those private equity share or whatever it is and I think they LED around for several of these things now it's not much you know 50 million 100 million but if you do 10 or 20 of those it adds up and uh it'd be curious to see like what specifically they lost money on how did they get to this point because typically let's say you and I Kobe and I started one of these and we got 10 billion dollars of assets right um Kobe's off drinking somewhere or something but the uh we have 10 billion dollars of assets and Kobe and I decide to put 100 million dollars uh with gainsey and gains he [ __ ] it up and it's worth zero sorry maybe such cases and we're down to 9. 9 billion and you know they hear about the gainsey problem so people withdraw 3 billion and we say okay here's three billion back we've lost 100 sure we I still have 9. 9 so going down to 6. 9 was not a big deal right so it's sort of weird that like okay well where is the client money like why aren't you solving like what happened that you know you can't where it just doesn't add up like nothing happened in the crypto ecosystem where like a token went down 90 so they were caught and there was a contagion they're not telling the truth about what happened and I think that's the big question is why are they in solvent now why can't they just honor the redemptions ftt at six yeah I just saw like all my private discords they're blowing up with ftt's value and every time it's like lower this is unreal oh my God all right Kobe got to run thanks a lot for inviting me ciao please don't blow up next love you all right if when a mute blows up the curse is real if one of you if windmill is wrecked next it's there's enough liquidity issues without that how many vendors are left Blackstone you know how do you reckon jump is doing they gotta be pissed not well do you reckon they're [ __ ] or just like having infinite money I might have some uh new numbers to share in a minute I'll let you know I'm getting it from what more leaks yeah foreign gbtc's making new lows how are they going to get that ETF approved someone just made a secret chat with me on telegram like a secret chat and then they sent me this message has gainsey got frosted tips or is he just going great I opened that bill had been like in some gossip I think it's just because his eyebrows are so dark they're like a black hole that the brown hair just a little bit lighter you're looking good it just looks like you're doing great all right might be a wig in February alameda's head of lending Richard Chang claimed a 10 to 15 billion dollar total borrow book to someone that I'm talking to directly Richard underscore FTX so in February their total borrow was somewhere between 10 and 15 billion wait whose was um alameda's head of Lending so alameda's total borrow book was likely 10 to 15 billion at least quoted from apparently Richard Chang to this person uh that's telling me this and now the account's been deleted but yeah the Richard Chang so that Comforts with the report that came out the leak and but the problem to me is the asset Side Of The Ledger has five had five billion dollars ftt totally worthless right a billion or two of Solana sold all that off not a lot else so how do they get 10 to 15 billion who would lend them money you know without collateral without anything I think the resistance is just that FTX guarantee the deal where it was like oh if anything goes wrong you know FTX will just kick over the money and you're just like almost like a senior secured and you have protection from two entities or something like that okay and say is that an ft on your wall as much as when it's worth just as little so once again mistakes have been made someone's telling me there's a rumor that the metaverse is now bankrupt as well the metaverse thank [ __ ] god finally Susie tweeted oh now people are just making secret chats with me to send me stupid [ __ ] messages hold on we got a CZ tweet again three minutes ago all crypto exchanges should do Merkle tree proof of reserves Banks run on fractional reserves crypto exchanges should not Finance we'll start to do proof of Reserve soon full transparency man how is Justin's son survived yeah what Chad speaking of jail isn't he like does he have diplomatic immunity now yeah his Excellency he does I think they're gonna crack that hack I know it's gonna hold up yeah um so does FDT just go to zero and stay there or is this like is what happens to Luna went like lunk Now isn't it like 80 then up a bunch and then 90 and up a bunch is there no white swan where Sam actually gets the money and salvages this even if he did I don't think anyone uses the exchange ever again right like it's well crypto's got an elephant memory like for a few weeks they wouldn't and then he adds like a coin that nobody else has on and all of a sudden you have to because all the liquidities on FTX the one's just gonna jump right back yeah that's true I set up a [ __ ] cool coil account in Peak bull market just for one old coin laughs man is coinbase fully down what is going on close somebody did buy a ton of puts so oh yeah well I'm gonna dip out thanks for watching some Carnage to come so I'm gonna go click some buttons do your job yeah peace have a good night everyone oh Legend you message oh Legend it's really [ __ ] now I know so CZ doesn't want to come on the show he came on once and then it wasn't it didn't go very well he's having like the time of his life right now just tap dancing on ftx's grave is just Finley Veil brag Assuming he's liquid and he's not posturing himself which you know we I think they've been the more straightforward actor but like we don't know what their balance sheet is well they did just throw 500 million at Twitter I you can only assume that they are they like I think their cold wallets are marked so I think so it makes you wonder he just tweeted that um they're gonna do uh proof of reserves medical tree proof of reserves um and all exchanges should start doing it um so they're going to do it soon apparently so at some point we'll know the problem with proof of reserves is it's like half the picture because you don't have proof of liabilities so we'll be able to see how much they have and they'll have yeah they've got 20 billion dollars of ethereum or something but we don't know how many customers feel like they have money there so they might have like 25 of liabilities so it's only really half the picture um but Kraken does that as well yeah um already um so I step in the right direction but it's just hard I guess it's like tether when they do the like not audit do you remember when three SEO blowing up and they just shared like a letter that was like um yeah it would definitely solving all good maybe that's what Alameda was sending back to Sam and saying like look this is the industry standard letter what could go wrong um look I understand why people become Bitcoin Maxes well the bit the Bitcoin Maxes were um embracing this chaos like real quick naturally yeah I'm actually I I'm still I'm just so amazed that it's even happening withdrawals have been turned off on Kraken what the what random DM I just got that much surely not sure as well I got that as well I just said it can't add withdrawal addresses can't add a withdrawal address that would imply somebody even uses Kraken and is trying to withdraw so I'm calling fud like nobody uses these sites it's so um Kraken was so close to being the greatest um like it was it just didn't work during the bull market which is like its whole job but everything else was great the cftc who once called me randomly on the phone to ask information about 3ac did they actually yeah Frank shaparos how did they get your number I don't know but I was on the way back from the beach just answering questions from the cftc it was great um they said to Frank shaparo any regulatory issues right now are unclear spokesperson Steve from Stephen Adams but they're watching the situation I mean these regulatory buyers are going to hop in real quick like real quick my tweet was quoted in an article by 14 great awesome so gainsey where do you trade if you're looking for a home right now I'm mostly trading Legacy markets like if I'm going to trade crypto just OTC desks you're just gambling how much have you lost since you made that 250k parlay um up around with yesterday's losses 350k or something I don't know up 350 including that win which one oh yeah with that one yeah so you haven't at least you're not down it'd be beef if I didn't listen to Twitter like if somebody sent me a party and I just didn't take it I'd be fine you sound so confident do you have any questions for Martin um yeah can I get Evelyn whatever new blockchain project you're doing you want to get what in our location in the seed round of whatever you're doing surely uh these days I think we're pivoting from crypto to AI so all right hit me up why not both someone's gonna do it well at some point I don't know if it'll make sense but the metaverse didn't make sense either so yeah it doesn't matter uh someone messaged me saying the metaverse going bankrupt is actually not wrong and Anna mocha which is the biggest metaverse game fire whatever investor is in the [ __ ] and are really tight for cash Martin did you watch the uh inventing Anna movie on Netflix yes you were a feature character in it do you have any thoughts well I may or may not be texting with the woman in question at the moment so wait was it was this was I thought it was it a show yeah the fake German heiress who rubbed shoulders with people like Martin um and there was like some credit card roulette which gains he's very familiar with for dinners and all this stuff and uh I guess they had a some sort of relationship and she eventually went to jail is that right Martin yeah she went to jail house arrest right now on and she cleared all that by selling the story to Netflix I think somebody else sold it yeah I think that's her game plan was to go to jail for a little bit and then be a real celebrity and heiress and stuff like that not heiress obviously yeah what was she like how did the movie do was it was the movie a decent portrayal yeah maybe it was a TV series not a movie whatever I didn't watch it but um I'm texting here right now to watch this um ASAP so nft collection which is who was ftx's auditor yeah they said they were audited regulated and audited I guess it maybe

### FTX Audit / Proof of Reserves / Borrowing Money / Jim Cramer [2:27:40]

is the U. S side only I don't know I mean I kind of want Arthur to come on because Arthur literally had a subtweet that wasn't cryptic at all it was just calling FTX out it was saying who's the next Lehman and then they add ftt immediately to their um to their margin exchange and then Arthur buys 15K Bitcoin puts like he clearly smelled blood early went for the throne that was right but what tipped him off he's coming um on in seven hours but I can release the proof of reserves yesterday they just have a technical issue related to withdrawals but they have proof of reserves already published at kraken. com proof of reserves the technical issue they don't have the money well uh the auditor was um Alameda accounting practice crack an Insider is telling me that uh they have no liquidity problems okay just their website's just down which is like what everyone expects from Kraken I have some inside baseball on there but what I'll say is that I don't know how to put this without violating confidences when you borrow money against your business um like a lot of lenders are not going to be lending to you at Libor or l or whatever they do now I know libor's from back from what before I was in jail live or plus you know 100 or 200 if you're a crypto exchange you're paying Libor plus 10 which right now is like a 16 [ __ ] percent interest rate um so where whoever gave Alameda these loans you not only have to pay the money back but then another you know five to ten percent I'm assuming they got a good price it still mystifies me as to where why can't they meet withdrawals where did where's the hole in this balance sheet where'd it go was it compensation could it be that you know some of this money's missing and then Almeida maybe even Sam's hands yeah I yeah I want to know that and when Sam trabs um renew if he knew but surely he must have done right like surely they didn't start loading out all the assets like in the last five months and create a massive hole instantly you maybe did it who knows um someone messaged me saying ask him about Jim Cramer he used to work with him I don't know if this is for games on Martin or Ledger did any of you Jim Cramer hi guy um but you know not he's sort of been retired for a long time um he was actually one of the best Traders on Wall Street so I don't know like people make fun of his trades or whatever but if you yeah his TV stuff's an act then well we have a news new character on screen now uh brought to you by dudester rendering of gainsey's new tips on the hair there Kramer would yell at you like Kramer used to throw water bottles at me um like he'd yell at you if you lost like 100 Grand he'd [ __ ] flip out we got a three or four hundred million dollar fund so the guy was just like you wouldn't want anybody else managing your money um ever since he retired this was 20 years ago you know whatever he's just all talk on TV but um yeah so message from uh Kraken holy ftt's still down it's full body no Wick just down yeah it's in the fives now my god um you know Jim Cramer is five six like even gains he's taller than him I'm taller than you no you're not everyone's talking took a picture and just subtly went from one side of me to the other and got like became six three in the process I went to a small side you did it's okay I don't mind I can go yeah one message from arrival is you know this is like classic Icarus moment where SPF starts playing with the customer funds because he's smarter than everybody and he knows how to do it just right where he can play with the customer funds and they'll be right back before anybody knows it and he'll just make a bunch of quick money over here and then before you know it it's you know he violated that trust and I think the there are other exchanges that aren't doing that and they're happy to make money on fees obviously that's been a tough road to hoe If you're a coinbase or anybody else for that matter so it's gotten harder and harder to make money on fees so why not dip into the cookie jar and play with that money someone just sent me a screenshot of their um FTX balance which has got negative um an extremely large number in it um which I'm guessing is either liquidated and not like repaid like liquidated and slipped badly or they withdrew um somehow more than they have um all right they just said last year we found a bug where you could withdraw more than your balance due to p l jumps on positions that directly affected the account and his for the screenshots forwarded me is from 2021 November 2021 so maybe there is like some hole from a bug where people were just withdrawing more than they were actually had in their accounts usually if one person can find an exploit like that other people do too and it's possible they were just [ __ ] drained if that's true I wrote for them after and they could not even find the account and they did not believe we took them for Millions it took them days and afterwards they paid a 25k Bounty is that the basically the same thing that the guy got arrested for with Silk Road exactly he was doing like hitting withdrawals a bunch of times processing it more than once before it confirmed through the Silk Road API or however it was authenticated unrelated but if Alameda I'm assuming isn't illiquid and they're trading right now and technically they're a different entity than FTX and FTX is unwind unwinding ftt is Alameda just all out shorting ftt while FTX unloads it no I think alameda's dunzo and that's causing the FTX problem if you have any Capital at all like literally any and you know for a fact Something's Gonna nuke because you're the one unloading it wouldn't you still just match they're along five billion dollars worth they can right I'm just trying to think of it apparently there's markets on FDX accounts now like you like what's the EV on and one FTX dollar I would pay you 50 cents yeah apparently there's um markets for it reminds me of um when gox went down and there was Bitcoin Builder where you could buy a gox coin and it like fluctuated from like one percent of a Bitcoin to like 90 like virtually every day based on what um Charlie schremmer um Roger was saying about gox last time I heard from him he was chilling me voyager mom um FDX clearly had no idea of course my balances totals funds in and out a few guys in a company that knows they are making money so all balances got to wait until later it was obviously internal balance systems were a big cluster [ __ ] who knows who knows to be honest someone could just DM me some total lie that sounds sort of plausible and I'd read it out said earlier uh I know someone who's interested selling his FTX balance that sounds expensive now bargain sorry say that again uh babul Garris has someone interested in selling their FTX balance at 93 cents on the dollar so they're giving a seven percent discount on their FTX balance no way it's yeah that's a sucker yeah God bless you a lot more than that for 93 cents Jesus Loops is killing me why does gansey look like a 50 year old man and a 15 year old girl at the same time about to turn that video off you're still buddy I got no response for that one Gaines are you going back to Dubai for boxing no not this time it costs like 30k to get a first class flight nah can't be bothered to fly anything but first class oh it's like a million hours if you don't have a bed you're stuck like in one of those uncomfortable chairs so like a normal person on an airplane uh sorry that's so painful for you I'm not gonna go support bags though of course well no he's fighting my other friend supporting them both but oh yeah that's true who's gonna wins in about in a knockout no idea I just hope it ends in a knockout I hope it's both people hands down just swinging who's he fighting uh Eric who's Eric Valley like crypto lawyer well it is learning crypto he's not a crypto lawyer I might have accidentally combined it to oh okay all right uh I've gotta go to bed um pleasure will you be up in seven hours ish for Arthur Hayes I don't know what time it is where you are yeah sweet um thanks all for being here thanks for joining us you gotta do the can you do the FTX sponsorship advert outro it's the perfect way to end this episode is to do that sponsored by FTX I don't know thank you so much for joining us here on up only TV uh please use FDX services uh bye everyone I'm going to bed bye-bye we'll see you later I'm just gonna hop over here app only dot TV slash FTX you know they just gave us QR code the other day for like what we could use for people to sign up and use their affiliate registrations oops all right off the air bye-bye