Crypto Updates

FTX Fallout Reveals a Shambolic Operation

The Rise, the Fall and the Reaction

The fallout from the FTX saga has been relentless, and what’s especially remarkable is how many different rabbit holes the story has opened up, as it extends in multiple directions.

At the center of it all sits the disgraced former CEO, Sam Bankman-Fried. The picture of him that emerges, as the plot unfolds both retrospectively and in real-time, depicts a confusing and erratic character, who, through his actions and public statements, is raising the hackles of observers on every side.

Outraged Customers

The people perhaps most outraged with SBF (as Bankman-Fried is often known) are the regular customers who utilized his exchange and have, likely irretrievably, lost their money. There are now indications that customer funds were essentially shifted into what amounts to a central slush fund, from where they could be easily misused.

And, then there is the loan of $1 billion given from FTX-connected, SBF-founded Alameda Research to SBF himself. On top of that, there was a loan of $2.3 billion given to Paper Bird, a company owned by SBF.

One can’t help but make speculative connections here, recalling that, according to Elon Musk himself, SBF offered $3 billion to be part of Musk’s Twitter acquisition. The new Twitter owner intuited that something was not right and declined, leaving us to wonder how it was that SBF had these kinds of funds to hand.

Avoidance of Responsibility

Getting back to those seriously disgruntled customers, a further aggravating factor may be SBF’s conspicuous refusal to take responsibility for his actions and the resultant FTX train wreck.

SBF has been communicating publicly through his Twitter account, but his messages are out-of-touch and peculiar, seeming to imply, at times, that what occurred was partly just an unfortunate accident, rather than the consequence of his own behavior.

Relatedly, some interesting digging that was circulated on Twitter showed an essay from nine years ago by SBF’s mother, Barbara Fried, who is a lawyer and a Stanford professor, arguing that free will is not real, and criminals should not be blamed for their actions.

She presents a coldly mechanical argument that runs directly counter to social norms, and it seems particularly jarring when considered alongside SBF’s own lack of personal accountability for his…

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