

A Crypto Catastrophe: The Stunning Fall of FTX—and What Comes Next
6 snips Nov 15, 2022
William D. Cohan, a veteran finance journalist and author of 'Power Failure,' dives into the shocking collapse of FTX and its founder, Sam Bankman-Fried. He discusses the essence of financial fraud and the lessons from history's biggest scandals. Cohan reflects on the media's role in idolizing CEOs and the inherent risks this poses for investors. The conversation also touches on the uncertainties facing the cryptocurrency landscape post-FTX, paralleling it with past technological disruptions. It's a cautionary tale for the future of finance.
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SBF's Quirky Persona
- Derek Thompson interviewed Sam Bankman-Fried (SBF) in December 2021.
- SBF, then 29, arrived in shorts and a T-shirt, despite the cold, embodying his quirky persona.
Naive or Fraudster?
- The core question surrounding SBF is whether he was naive or a criminal fraudster.
- One theory suggests SBF might have fictitiously taken customer money under the guise of trading, diverting it to his hedge fund.
Shitcoins and Margin Loans
- SBF reportedly used thinly traded "shitcoins" as collateral for margin loans, a risky practice.
- When these coins' value dropped, margin calls triggered a downward spiral, exacerbating FTX's financial troubles.