This Week in Startups EMERGENCY POD: FTX sells to Binance with Vinny Lingham and Sunny Madra | E1607
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Nov 8, 2022 
Vinny Lingham, a crypto entrepreneur, and Sunny Madra, a tech strategist, dive into the shocking sale of FTX to Binance amid a liquidity crisis. They discuss the implications of FTX's governance issues and the intertwined operations with Alameda. The conversation highlights risks tied to centralized exchanges versus the promise of decentralized platforms. They explore the potential fallout on crypto regulation and the future dominance of Bitcoin in a market shaken by turmoil. Lingham also theorizes on the impact of Alameda's locked Solana amidst the chaos.
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Governance Issues
- FTX and Alameda Research lacked proper corporate governance, operating outside the US with no regulatory oversight.
- This allowed SBF to control both, creating a conflict of interest and enabling Alameda to invest in projects while FTX listed related assets.
Alameda's Balance Sheet
- Alameda's balance sheet, according to a leaked document, held a significant amount of FTT, FTX's token.
- Vinny Lingham questions the document's accuracy, noting discrepancies like the listed Solana holdings exceeding the market's locked Solana.
Three Crypto Paths
- Operating in crypto offers three paths: US-based with securities regulation, on-chain transparency like Bitcoin/Ethereum, or centralized like FTX.
- SBF's centralized approach with FTX and FTT created a system where he printed his own currency and used it with a conflict of interest.