Kevin Zhou, cofounder of Galois Capital, and Jesse Powell, cofounder of Kraken, talk about why FTX collapsed, the warning signs, and whether it’s a catalyst for self-custodial adoption.

Show highlights:

the root causes of the FTX collapse, according to Jesse and Kevin
whether there were warning signs of all the risks that were to come
the importance of learning from mistakes, even for new people in the space
Kevin's response to the stuck funds in FTX
the debate about utilitarianism and SBF's effective altruism
whether the philosophy behind founders matters
Kevin's and Jesse's theories of how FTX and Alameda lost billions of dollars
how Alameda and FTX's books were commingled
whether people will start using self-custodial wallets
whether the fall of FTX vindicates BTC maximalism
whether regulation has been beneficial or harmful for American customers
the role of venture capital firms and their "mixed incentives"

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Kevin:

Twitter
Previous Unchained episodes:
How Traders Are Thinking About the Merge — and a Potential ETHPoW Chain
Why Kevin Zhou Believes Ethereum Will Have 3 Forks After the Merge.
The Chopping Block: Kevin Zhou on Why He Knew Terra Would Crash

Jesse:

Twitter
Previous Unchained episodes:
Jesse Powell, CEO of Kraken, on Drawing a Line With Regulators

Episode Links

Previous coverage on Unchained of FTX:

Did the Bahamian Government Direct SBF and Gary Wang to Hack FTX? – Ep. 422
The Chopping Block: Why Lenders Didn’t Liquidate Alameda When It Was Underwater
Erik Voorhees and Cobie on Why FTX Loaned Out Customers’ Assets
The Chopping Block: FTX: The Biggest Collapse in the History of Crypto?
Sam Bankman-Fried on How to Prevent the Next Terra and 3AC

FTX Collapse:

First declaration document
Unchained: FTX Bankruptcy Overseer Says Company’s Collapse Is Worst He’s Ever Seen
Unchained: Bahamas Regulator Directed SBF to Transfer FTX Assets to Government Wallet
SBF tweet: FTX files for Chapter 11 bankruptcy protection
Vox interview with SBF: Sam Bankman-Fried tries to explain himself
NYT: How Sam Bankman-Fried’s Crypto Empire Collapsed
Bloomberg: Crypto Hedge Fund Galois Confirms $40 Million Exposure to FTX

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