Erik Voorhees and Cobie on Why FTX Loaned Out Customers’ Assets - Ep. 419

 Erik Voorhees, founder of ShapeShift, and Jordan Fish, aka Cobie, crypto investor and host of UpOnly, talk about the collapse of FTX. 

Show highlights:

• the links between FTX and Alameda
• what kickstarted the blowup of FTX
• why Erik and Cobie think that Bankman-Fried's behavior was “sociopathic”
• why the $10 billion hole is so shocking to Cobie considering the advantages that FTX had as a company
• whether this would have ever happened if the prices hadn’t plummeted in the bear market
• the tension between advocates of privacy and those who want to limit criminal activity
• why Erik believes that SBF’s donations to both political parties are bribery
• whether regulators can prevent an exchange from collapsing
• whether Changpeng Zhao did a better job at investigating FTX than anyone at the SEC
• the likelihood that this will result in criminal charges
• how blockchain technology is the solution to the problem of centralized exchanges doing things in the dark
• Tether’s decision to freeze USDT owned by FTX
• Erik’s response to Bitcoin maximalists who say FTX was caused by altcoins
• whether it is a mistake for exchanges to issue their own tokens
• how big the contagion could be in the industry
• why nobody should leave a significant amount of their net worth in a centralized exchange
• Erik’s message to regulators
• whether SBF was aligned with the values and the ethos of crypto

Thank you to our sponsors!

Crypto.com

Ava Labs

DeFi Saver

Erik:

• Twitter
• ShapeShift
• Previous Unchained episodes:
• Why ShapeShift’s Erik Voorhees Thinks Toxic Bitcoin Maximalism Is Bullshit
• Shapeshift’s Erik Voorhees on How Crypto Will Separate Money and State

Cobie:

• Twitter
• Substack
• UpOnly
• Previous Unchained episodes:
• Cobie and Chris Burniske on How to Navigate a Crypto Bear Market

Episode Links

Previous coverage of Unchained:

• Sam Bankman-Fried on How to Prevent the Next Terra and 3AC
• The Chopping Block: FTX: The Biggest Collapse in the History of Crypto?

FTX Collapse:

• FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall
• SBF’s video talking to regulators
• Unchained coverage:
• FTX May File for Bankruptcy After Binance Walks Off the Deal
• FTX Needs $8B to Meet Investor Withdrawals: Report
• Tron Founder Justin Sun Says He Is Working With FTX on a Solution
• US DOJ Joins SEC and CFTC Probe of FTX
• FTX-Issued Wrapped Solana Tokens Could Add to DeFi Contagion: wBTC Creator
• Sequoia Capital Writes Off $214M FTX Investment to Zero

Binance’s dropped deal with FTX

• CZ’s announcement
• SBF’s announcement
• Binance’s merkle-tree proof-of-reserves
• Unchained coverage:
• Binance Set to Buy FTX Amid Liquidity Crisis
• SBF’s Net Worth Plummets 94% In One Day: Report
• There are Rumors that Alameda Went Down With 3AC in Q2
• Alameda Owes More Than $30M in DeFi Debt
• Coinbase and Genesis Declare No Exposure to Collapsing FTX 
• Binance Might Have Triggered a Liquidity Crisis as FTX’s Main Wallet Lost 290K ETH in Two Days
• Binance to Liquidate Millions Worth of its FTX’s Token Holdings
• FTX’s Stablecoin Reserves Hit One-Year Low
• Alameda’s Balance Sheet Sparks Controversy

Crypto regulation

• Industry Leaders Debate How to Regulate DeFi
• Bankless debate between SBF and Erik Voorhees 

Learn more about your ad choices. Visit megaphone.fm/adchoices