[Music] So let's get into this right off the rip Before we bring our guest on let's talk About what everybody wants to talk about FTX wow That happened Um I'm just pulling up my notes on this So Um sambang free was uh labeled The Golden Child of crypto uh young man who Was the CEO or is the CEO of that Exchange there's a crypto exchange he Stepped down didn't he oh he's no longer The CEO I mean I think if you get on the Plane and go to Argentina you kind of Quit okay all right well in any event Yeah former CEO yeah uh uh crypto Exchange called FTX I think they had the Miami arena yeah yeah yeah formerly American Airlines now FTX but uh they Strip it the deal was like 10 years for 145 million or something like that yeah That's gone yeah it's gone so this is All right so this this is an interesting Story just like a quick overview of what Happened Um so massive amounts of withdrawal on Requests came in after Um a report was published that uh FTX Owned a suspicious amount of ftt ftt is FTX is native currency it's like binance Coin would be for buy next yeah so I Guess um a report was published and um It was it was a suspicious amount of
Coins that was being held by FTS as a Result of that Finance the world's Largest cryptocurrency uh brokerage Announced that they would be selling Their ftt tokens shout out CZ due to Recent Revelations That caused a firestorm on cells of ftt Tokens from the market because people Were scared they thought that it might Fall apart and They didn't have enough liquidity to Cover all of the people all of the Amount of money that was going to be Taken out would that cause the coin to Collapse in a day which because The exchange to collapse in a day which Caused Mr Freeman to lose a 16 million I Believe billion billion 16 billion with A billion in a day yeah and then binance It was reported that they was going to Come bail them out then they decided That they wasn't going to bail them out Um so this is called the black cloud Over the crypto space all cryptos were Down Um and there was even something today uh That I had read about crypto.com Mistakenly sending 400 million dollars In crypto to a wrong exchange by Accident and you know it's just a lot of Bad press fear Uh speculation that you know a lot of These places are insolvent that they They're not their books aren't clean and
Yeah they don't have enough assets and It's caused a real a real you know Firestone effect and the [ __ ] in the Crypto space so yeah all right that was My quick synopsis so let's let's get Into this what's the thoughts on this Situation Um initially when I heard this I Intended to come in and go crazy low Deluxe but now isn't the time for me to Focus on me or be egotistical and the First thing I want to start off with Something we talked about and it's a Lesson that stuck with me that you Shared about a particular person who had A comment for someone and they came for Him [Music] Sam end up getting into a what's easy of Binance And he was the one who exposed They essentially had been running a Ponzi now the interesting thing about FTS FTS so when The interesting thing they put out a Letter of intent to buy the company they Released part of the financials and 24 Hours later say hey we don't want Anything to do with the company as a way To expose that support that they so a Letter of intent that part When you send a letter of intent with no Money no guarantees or when you're going To wire money
You're exposing all of your financials That is a huge mistake All right um go ahead no go ahead There's so much to unpack right just Just in that alone right I think one of The biggest things is like know who your Rivals are yes understand be careful who You offend be careful with your fan yeah Understand who your Rivals are Understand who your competition is in The space the fact that binance was even Thinking about doing it it felt on the Surface like wait this doesn't seem Right yeah right and as soon as that Happened I put it in the tech the chat I Said yo they're gonna back out this deal Yes but what they did was they made them Show their hand And when you show your hand right like Because that's one of the things in the Crypto space is like They don't have to show their books at All who who is the who is the the Governing body that says yes you need to Show the books there isn't one no Especially if you live in the Bahamas Especially right yeah so when you have To open up the books and the competitors Now see it and they say Oh wait we're Not doing this and they pull the rug out Now it feels like wait this was done Super intentionally even in this tweets If you look if you look at Sam's tweets Yeah he kind of I think he kind of felt
It like wait I just got played yeah and It was sad to see like it sounds pretty Like somebody is worth 15 billion Dollars on a Friday just think about That and by Tuesday They're down to 400 000 in net worth no No 400 400 million it was 800 million 800 no no hold on And then when they saw the books they Realized that the debt was 650 million So they actually had he had negative net Worth after after the week was over the Company the company the company he's Personally worth 800 million dollars Right now presently okay currently so Let's just he's through let's keep it on Perspective I mean honestly or maybe He's not well report we can only go out With the reports and saying yeah New York Times reported that he lost 94 of His wealth which is still put him at 800 Million dollars so for how long though Hypothetically and no no the other side Of it the strategy that he was running To do the Bitcoin Arbitrage and buy In a country and then move it here was Really smart Um he was setting up himself to be the Warren Buffett of crypto and he was Trying to build companies out but when You see Some of the other things like I mean okay I've said anything that is Too good to be true usually is no one
Can guarantee any kind of return legally So to say hey I'm Gonna Get You eight Percent return a year or a month In itself is not legal secondly when you Have a company that is based in the Bahamas with no or little regulation That is normally not a good sign number Three any person product entity Corporation token or coin that is Advertised to be the savior of anything Usually as a demon in disguise and we've Come across Couple right so even with me like I Can't guarantee knowing what all the Information that I know I'll never Guarantee a return because I don't want To put myself in a legal Bond There and also going back to the trading Part so when you have a hedge fund and Your Market making and you're watching Your trades with leverage you can Manipulate the price of what that token Is going to be Which is a huge mistake for him to even Do because everyone in the space knows That that is illegal but the bigger Issue that we have to get to is the Angel Investors and Venture Capital Companies That pushed for crypto and web 3 to be This enormous space because they needed Another win Um and it's a very nuanced conversation That we can probably spend two or three
Weeks talking about but The Venture Community has to start doing Its own due diligence so to see Sequoia Put a bunch of money in and a bunch of Other firms I know at some point they Had to say well this person's in this Deal I'm going to Pilot because they are As well and not to even mention if they Invested in the company got Equity there And got tokens You got paid twice so we have to be very Careful and I know everybody in crypto I know you thought this Monday I was Gonna come out and be like I told you so It's not the time for that but anything That is too good to be true usually is Um the bigger issue that we have to Really face is what are we going to do About the American economy because the Desire for these high gains with no work Is usually representative of the job Market is not good Amazon is laying off 10 000 people off the matter just laid Off 11 000. that's a lot Things are getting scary what does it Say for crypto though right because I Mean there's there's a couple of things We could say Obviously we'll see the Effect that it's had on bitcoin Obviously one of the about 16 000 but it Does is this now the moment it feels Like it could be maybe it's not that all Right enough is enough regulations is on The way it has to I mean honestly if we
Think about it and I won't even get into The political part of how much he Donated to uh the Democratic side So and I would argue if he was a Republican they would be running news 24 Hours about how this was a Ponzi for the Republican party I mean the Democratic Nor Republican but I just think it's Interesting that When they were all these red flags that No one said anything because he was a Democratic favorite Um what does it say for crypto Regulation is going to come and I truly Believe a lot of these people will put In place Buy Banks and hedge funds to help Destroy crypto so they that they can Then take it like we have to be honest This is a game of strategy in the Game Of War This is not no different than a penny Stock ERA this is no different than the Forex Market it's no different than the crypto Market of 2016. we saw this happen Before yeah Um with several companies that went out Of business and then more regulation Came in and the banks got more involved We'll see the same thing again you know Even from the side of like I said Knowing who your Rivals are if you think About Finance yeah right asking to see
The papers and obviously back in our Deal once they saw that you know the Company wasn't making money You get one of one exchange right FTX is Now going and just think about how Widely popular they were just really Quick to get in context they had four Super Bowl commercials which is also a Sign that like honestly any product is Really good you don't have to advertise Like crazy they they they nominated the Super Bowl they had Tom Brady had Steph Curry they had all I mean just the Publicity around it was big so you take That one out and now you hear crypto.com Is in trouble and so what does that do People.com But can we be honest if we went to any Of our moms or aunties and said hey this Is what this token does 99 of the time our aunties or moms or Dads are going to be like that sounds Like a scam Right away so all even all the Decentralization talk okay great if Crypto was supposed to be decentralized Why do you have a hedge fund that was Marketing One thing but the firm was doing another While bailing out and then also what he Really got into trouble was using the Customer funds and it goes back to Trading Those 300 practice trades are key risk
Mitigation is key and we've all done it We've all been in the trade and been Like I should only let this trade bleed Down 20 and it goes 35 and it's like ah Let me put more capital in and I think That he thought he was never going to Get caught he was going to be able to Bail out some other companies and he was Going to be able to work his way out of It um this is a historical lesson on Risk management and same with Madoff When you get away with it the first time If you ever seen Madoff story Madoff I Think his initial lot was less than a Thousand dollars to a client but the First time he got away with it he never Stopped so As you were saying I say that to say Yeah risk management is everything and We've all over traded we've all over Capitalized certain trades Um I hate that this happened I I hate You know this has been exposed but I've Been telling everyone if anything is too Good to be true it usually is and if you Want gains in the market you have to Work your ass off to be able to get them They're not going to come easy from Anybody so that's kind of the point I Was getting to was like are you Obviously as a competitor if I'm Finance This strengthens my position yes right Like FTX I'm the negative news around Crypto.com
It's become the obvious food I mean They're the large exchange now yeah the Strength is that stretches their Position yeah not only as an exchange But even the coin itself I'd be Interested and then now he's saying okay Now I'm gonna help you bail out other Right funds if they get in trouble so Now he gets to be a savior and we have To also keep our eye out for tether Tethers on the ropes and where's tether Based on a fable coin If our dollar isn't stable how are some Compared to a stable Yeah two tattoo index moisture I know People hate hearing the same thing over And over again please put it in chat Safety over sensationalism even the Whole default you're not going to get 19 Return a month Like I don't hear Charlemagne or Steve Harvey or like Ellen being like I found The crypto that's going to get because They would 50 would put all of his money From stars and power into that thing if It actually works Like we have to be careful when we when We're being marketed too we're always Used for liquidity be careful Interesting time in crypto [Music] I know they can't stand it
