Bankless - The Collapse of FTX | 24 hours later

Starting point is 00:00:06 Biggest Nation, another emergency episode for you today. We are 24 hours after learning about the collapse of FDX, and a lot has happened since our last live stream in the last 24 hours. So we felt a need to call this emergency episode, do live stream. Part two. Here we are again. Round two. Are you feeling exhausted, David? Yeah, I'm pretty exhausted.

Starting point is 00:00:31 Yesterday, it was like exciting. maybe dare I say fun but then today is a little bit more oh no this is real this is bad this is something that we will have to get over as an industry not to get over this big ass hurdle I think that that's the theme is basically what are the consequences of people's actions what is happening what is the fallout going to be and I think some themes for this episode yesterday was kind of like what happened now we're dealing with the fallout the contagion. We're in damage control mode, and we're still trying to assess this. I mean, there's a lot of big questions people have. It seems to be there is a hole on FDX's balance sheet.

Starting point is 00:01:15 There was talk yesterday. The direction seemed to be a CZ would kind of ride, bring the Calvary in and save the day, save depositors. I'm unsure if that's going to happen. We don't know how large the hole actually is. That is the question. How big is the hole? And is the whole, acceptably small enough for somebody to willingly take on the challenge to plug it. Absolutely. Is it worth it for CZ? Yeah, is it even salvageable? That's the question. Also, another big question, which we didn't have an answer to yesterday. Now, we have more clues, I think, David, was FDX playing with depositors money? Alameda, FDX, seems like these entities were somewhat tied at the hips. Yeah. More so than we previously thought, yeah. More so than,

Starting point is 00:02:02 Definitely more so than it was appropriate, more so than we previous thought. Some of these details are coming to light, so we felt the need to give you all of those details and just have a conversation with the community about this because price are down bad. A lot of people still have funds frozen in FTX. So guys, this is the emergency live stream that you're tuning into right now. David and I are going to get into all of the details. But before we do, we want to thank the sponsors that made this episode possible. Arbitrum 1 is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web 3 landscape.

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Starting point is 00:05:10 It certainly looks like things have deteriorated. Things have collapsed. David, let's give folks a recap for those that didn't catch the episode yesterday. Now, I will say if you didn't catch the episode yesterday on the RSS feed in YouTube, there's a way to go check out David and I give a kind of a timeline of events that gets you all the way from early November up to November 8th. So you can hear what happened then.

Starting point is 00:05:33 We're picking this story up the next 24 hours. By the way, in that previous episode, we've got takes from Eric Forheese, Brian Armstrong dropped in and said hello, gave his takes. We also had Ryan Selkis weigh in on the regulatory front. But David, catch us up with this recap. What has happened? What tweet are we looking at? What's happened, I guess, in this whole course. of events to get people up to speed.

Starting point is 00:05:58 Yeah, so this is a tweet thread out of Wasi lawyer, who I thought did a pretty damn good job of summarizing everything. But it starts the thread with the conclusion that out of all people, all entities that FTCS might have chosen to get a buyout from, they chose Binance. And so there's already significance in that choice as well. Wazi gives a recap and says there were many options available to SBF, seek emergency debt financing, which it was reported that SBF did go and do. into Wall Street, seek new money investment, or liquidate all their assets to buy time.

Starting point is 00:06:31 Yet they chose to get emergency debt financing from Binance. And so the WOTI lawyer continues and goes via seeking bankruptcy to protection to facilitate, Sam has chosen to seek a bailout from Binance. The very party that triggered the bank run in the first place, is what we talked about yesterday. What we can gather from this is that FDX was indeed lending out customer funds to other parties, because why else would a crypto bank be insolvent, likely to Alameda.

Starting point is 00:06:59 And this means that as Wazi lawyer speculated earlier, FTX was working on a fractional reserve model and it was not prepared to meet with the withdrawals from the run on the bank, which CZ triggered. Like we know this because FTX stopped with processing withdrawals. This is the facts that we concluded with yesterday. But again, the speculation that everyone in crypto Twitter, in the world of crypto is assuming to be true, is that Alameda had FTX deposits, had FDX money.

Starting point is 00:07:30 And Alameda, this is going on to tweet number four here, Alameda itself did not have the liquidity to return the funds to FDX, thus leading it into the liquidity crisis that cause all of this drama that we have seen, so forth. And so Wasi lawyer continues, but this was not, the returns of money from Alameda to FDX was not enough since customer confidence was not returning. This is kind of the run on the bank that CZ triggered. There were no deposits only withdrawals. Some sort of external third party funding was required to meet the outbound cash flows out of FTX. And so Wasi lawyer continues and says, instead of seeking finance from any other party or to buy more time by throttling withdrawals,

Starting point is 00:08:13 SBF bent the need to buy names. Does this mean that FTX was in such a deep hole that they weren't talking about emergency swing line but full on rescue financing as in there were other less significant ways to plug this gap that might have ftx might have chosen but they seemingly went for the most nuclear option which is the most expensive option yes the worst possible right like an option that no one would it's the lone shark option basically the option that no one would choose unless they were in completely desperate straits uh yeah right exactly and so this is what wazzi is concluding that FTX had a massive hole in the balance sheet that could not be plugged by other financiers which forced SBF to kiss the ring. So this is the recap of where we are thus far.

Starting point is 00:08:57 And no to the comment in the chat. We are not here just on YouTube to read out tweets. This was just I thought a particularly good recap to catch us up on the last 48 hours. But that was yesterday, right? That was yesterday. I think the key thing here is like what we can gather was that FTX was lending out. out customer funds to other parties, likely to Alameda. That's crazy. So SBF, FTX, and Alameda, looks like they were co-mingled. Alameda, of course, was a Three Arrow's Capital style fund, and that was combined with FDX in exchange. One is essentially a bank where you're supposed to, inside of a bank, you're supposed to deposit your fund, they keep it safe. Not to be traded,

Starting point is 00:09:43 not to be speculated with. Now, Alameda, of course, is a completely different business model. It is a three arrows capital, highly risky. And of course, we saw what happened to three arrows capital, went completely bust back in, was that May of this year? Yeah. And it looks like some of the funds were commingled. That's what we can infer from this data. A few other implications, I think.

Starting point is 00:10:02 I was thinking about this, you know, yesterday at the close of yesterday, I was, you know, reflecting on the day. One, SBF has been downgraded from billionaire to millionaire. David, there's a report that he lost 96%. of his net worth and, I think, continuing to drop. Right. He's one of the richest people in the world. I mean, about $22 billion who's on Forbes list.

Starting point is 00:10:27 I think he may have made the cover of Forbes. He is now downgraded to millionaire. I'm sure he's just going to be just fine, except I'm also not sure about, you know, kind of the legal implications of this, if this looks like something a bit more like fraud. Yeah, if it's one thing. First off, he's a millionaire.

Starting point is 00:10:45 He's a hundreds of, millionaire. He's got a net worth of like over 500 million. So I don't, I don't, I'm not like, he's doing the whole crying with cash on his eyes thing right now. Well, we'll see. I mean, he might be doing that in jail. It doesn't really matter. Yeah, it doesn't matter how much money you have if you have to go to jail. But we'll talk about that later. This is a key implication. One of the mighty, like, I mean, everyone looked up to this guy. Arthur Hayes, even as recently this morning, called him a once in a generation trader. Yeah. And he's been kind of gone.

Starting point is 00:11:17 like reputation ruined. Second, FDX becomes a vassal of Binance. Seems like that is happening. They've already bent the knee. Whether Binance purchases FTX or not, we'll see. CZ,

Starting point is 00:11:28 I think he's on track to become the richest person alive, certainly. If this deal, well, he's definitely up there to begin with. If this deal goes through,

Starting point is 00:11:38 I don't think much new wealth goes to ZZ, but so much more power goes to CZ. Power and then just think about like kind of next cycle once, crypto is going to recover once it does. CZ will own this market from a banker perspective. It's just like CZ and Brian Armstrong kind of standing. Speaking of Brian,

Starting point is 00:11:57 Coinbase gains some major legitimacy here. Big time. Big time. Game, doing things right. Didn't have any assets on FTCS. They come out looking squeaky clean. And thank God we have them in the U.S. Because you know the U.S. regulators are looking at crypto and being like,

Starting point is 00:12:13 yeah, you say you guys aren't the Wild West. Like, look what just happened. Exactly. And this is why I think, you know, SBF's DCCPA, Bill is dead, completely dead. He was giving that a lot of credibility. And we've lost a lot of that credibility in DC. My conclusion is after all of the events of this year, I felt like over the past 18 months, you know, two years, this, this, a lot of this market cycle, it's been kind of the era of like finance bros almost. I mean, like, there's been a whole camp in crypto.

Starting point is 00:12:46 that hasn't been here for the OG crypto values. And they've been completely wiped out through the FERS capital, Luna, you know, Celsius, taking these shortcuts, doing things on margin, Algo stable coins that, like, clearly couldn't hold up to the true pressure and scrutiny of the market. And now FDX. It's the end of an era. And I think what's going to happen, David, is almost like a reformation type movement in crypto. where we start of go back to some of the roots of this industry. Go back to first principles and why, like, trustless ownership of assets and not your, not your keys, not your crypto, going back to stuff like that. Say it again. Not your keys, not your crypto.

Starting point is 00:13:31 Like, it's crazy, Ryan, that we have to do this. It's crazy that this happens over and over and over again. It's crazy, but one thing is, I don't think it happens twice to the same people. all right so the people who got mount goxed i'm betting did not get fdxed yeah just now big time it's so the reason we have to keep repeating this is because we have no new cohorts it's like every class every crypto generation has to learn these lessons and look before 2022 mount gox was like an artifact of the past 10 years ago before we had smart contract platforms before we were more sophisticated before the professionals like SBF and Suu and Doe Kwan had entered who know finance, know how the space works, right?

Starting point is 00:14:20 Mount Cox, what does that stand for Magic the Gathering online exchange? Right, exactly. Really different level of sophistication. And so what has to happen is the new cohort, the new class has to learn these lessons. Let me ask you, David. I know I was talking to you this morning. And you're pretty down. right? Like what's your mood been about this?

Starting point is 00:14:45 It's like, like I said, yesterday it was, there was drama and drama on crypto Twitter, like crypto Twitter jokes were like really good. And like drama as a content producer is kind of fun. But then I wake up this morning and I'm like, oh, now we have to clean up. Now we have to now we have to, yeah, now we have to grab a mop and like clean up after the mess. And this is the problem of people like Doquan and people like Three Ours Capital, anybody who takes on significant responsibility and then burns that responsibility, we have to clean up their mess. And now we have like the third, tied for second, biggest exchange in crypto going under,

Starting point is 00:15:32 like after Three O'S Capital is gone, after Terraluna's blown up, Like there's less and less people to clean up this mess as the bear market goes on. And so like now the responsibility of fixing the PR branding of crypto is like falling on fewer and fewer people's shoulders because people are like fed up. People like I have not seen Ryan more people talk about like Kobe today. Kobe was like I have thought about leaving this industry many times before. But today I came so close to the brink of just leaving and getting out of here. Did you think about that?

Starting point is 00:16:07 Did you think about leaving? No, I, no, I can't leave. I don't have anywhere to go. David has no home. But like, it's just like, how many times were you going to do this? So, okay, so that sounds like, to me, that sounds like frustration.

Starting point is 00:16:24 Yeah, big frustration. So I tweeted this out, just mad or sad, do a poll, right? And it's like, I feel like these are the, I guess, some of the early stages of grief, is either you're angry or you're sad. But you just reflected on something that is cleaning up after the party. Yo, can someone tell our lawmakers the FTX thing was C-Fi again, not D-Fi? It's going to take.

Starting point is 00:16:50 And like the thing is this is, we're going to preach about this is why we defy. This is what D-Fi is here to do. If you were in D-Fi, you were fine. We have been yelling that take for the past like 12 months. No one cares anymore. Like no one even cares about D-Fi. Imagine you're Jake Trevinsky. So I said this and Jake Trevinsky is like on it. But like imagine, thank you, Jake.

Starting point is 00:17:11 Thanks, Jake. Imagine you're Jake Trevinsky. You're working with lawmakers on to try to get like good defy language or to try to get that excluded from the DC CPA. They barely understand crypto in the Ag Committee, Agriculture Committee. And then this happens this week. What do you think that does to our credibility in D.C.? People like Jake, people like the Defy Education Fund. And SBF is no longer going to have a place at the table, obviously, right?

Starting point is 00:17:38 Completely delegitimized our industry yet again. And people are going to have to try to pick up these pieces and try to tell lawmakers like what really happened. But I think we're going to get broad brushed here, which is so unfortunate. That's why it costs us so much. These types of things costs us so much. The legitimacy of the space, reputation of the space. I mean, people can't differentiate between D-Fi and C-F.

Starting point is 00:18:03 might to your point. Okay, so you're frustrated. I think just like at this point, after Terra Luna, after three errors capital, now after the third largest, the reason why this hits extra hard is because like you could be forgiven for not knowing who three hours capital was if you weren't in crypto. But FTX went on huge promotional campaigns. They bought an arena in Florida. Tom Brady. They had Super Bowl commercials and that's what went under. So like now there's FTX. arena now, which is now, FTCS is now worth Miami, so the old Miami Heat Arena. Okay. I think that's right.

Starting point is 00:18:42 It's one sports thing that we know. It's not going to be next year. I mean, someone else is going to have to, I guess they give it back to Wells Fargo. I guess. I guess so, yeah. But like, the problem is that, like, FTX was so public and then they burned, they is to a lot of people, FTX is crypto. And so when they go under, like, it's, the scar on the PR of crypto is so.

Starting point is 00:19:03 much worse. It just kind of reminds me of like the ICO era where like the only reason why the bull market started in 2020 was because people finally forgot that the ICO era existed. And so I've been bullish on this bear market up till recently just because like, oh, that's not so bad. Like three hours capital. Like yeah, Doquan, Terraluna algorithmic stable coins. Great. We learned that lesson. We learned the lesson. That was new for us. We learned the lesson that the algorithmic stable coin is not a good thing. We had already learned this lesson, and it was the third, second, biggest crypto exchange of all time. And so, like, now at this point, I'm just, like, capitulating on the idea is like, now the only, like, way to get more people excited about

Starting point is 00:19:45 crypto is to get them to forget about 2022. Yeah. I, so I was reading the chat log as, somebody's asking if there's another leg downcoming. We'll get to that. I think the answer could very well be yes. Some people are, yeah. The facts in front of us. There's different opinions out there. Yeah. But let me ask you more about your mood because what I'm hearing now is this afternoon, David, is frustrated and angry. Right. But this morning, David, when I talked to you, you were like, the first, like, words out of your mouth were like, I'm sad. Yeah. And I think that's the other mood. And I want to ask the chat to you, like, bankless community, how are you guys feeling about this? Like, how are you doing? You guys, okay? Let us know. They want us to stop talking about.

Starting point is 00:20:31 our emotions. No, just be why it wants to. I think the entire crypto industry is saddened by this as well. Can you tap into that for a minute? I mean, a lot of people still have their funds on FTCs and they don't know if they're going to get their money back. All right? Yeah, I actually chat. If you have funds on FTCX, like drop a message in the chat because I'd like to know if how many people like that watch bank lists like you also use FDX and like lost money in FTC. Because like now now there are like there are people offering. Hey, I'm selling all of my I'm willing to put an offer of like my one million dollars that I have in in in FTCX at like 70 cents on the dollar. Like I we've seen tweets like that.

Starting point is 00:21:16 So people are selling their FTCs accounts for a discount for people that would like to take the gamble that that you somebody might pull through and make them whole. I'm saying like like maybe 20% of the chat is saying yes. I have funds on FTC. 80% may be saying no. So thankfully, a lot of bankless listeners avoided that. But look, if you were

Starting point is 00:21:40 among those who still have funds in FTX, okay? Let me just tell you, it's not, it didn't just happen to the people who are new in crypto. I mean, David, do you see some of the people who are like, look, we got completely wrecked? Researchers. Researchers.

Starting point is 00:21:56 Was it Tom from Delphi? I saw. No, I think he just was giving his con congences. Larry Sermac from the block said he got his biggest day one loss of all time because he trusted FDX. Guys, right? Yeah. Brutal. These are super smart, sophisticated individuals that I would not blame. That was a calculated choice. And like, honestly, no one saw this coming. No one saw that's coming. Not at all. No one saw, no one. Okay. So I think, look, here's the thing we have to protect ourselves against. I think we know the general principle of not your keys, not your coin. Right? Like,

Starting point is 00:22:30 and that should be evident. So like, do you remember Andreas? Man, I go back to the OGs. You remember Andreas Antonopoulos? Yeah. He's like, he's like, an exchange should be like a public bathroom. You get in, do your business and get out. Yeah, right.

Starting point is 00:22:43 Right? Like, that's how we should treat exchanges. And we didn't. Not us. I'm talking about like many in the industry didn't. Yeah. And had funds in FTX. But it's like, so I am, I'm also tapping, like I feel that a lot of people lost a lot of money.

Starting point is 00:22:59 And the other piece here that saddens me is like, it didn't, it's this, it's another, David, it's another self-inflicted wound. Okay. That's going to set us back. Just like Lunarra, three errors capital, self-inflicted wounds. Like literally the shotgun and we're shooting ourselves in the foot. It's just, it didn't have to be like this. SBF is a genius.

Starting point is 00:23:25 I think he, like saying that now sounds really, but like I think he is a brilliant. once in a generation trader like FDX was a great product except for the insolvency thing but like it worked they added features very quickly like it was in some ways

Starting point is 00:23:40 ahead of like Coinbase and some of its contemporaries I mean execution kind of got them there and then he made this mistake and it's all self-inflicted and like I'm sad because it's cost a lot of people a lot

Starting point is 00:23:52 it's cost their industry a lot and I think it set us back I don't know I can't put a timeline like has it set us back a year at least has it set us back 18 months like two years i mean we we we already had debts to pay with like three o's capital and and luna and all that stuff um but yeah it's just added more debt to pay for sure david someone wants to um in the chat wants to see if we'll publicly apologize to bitcoin for being uh or sorry to bit boy um were we wrong about bit boy yeah uh so i was talking to somebody from from

Starting point is 00:24:23 the bankless side of things about like all right well why is everyone in the chat saying what bit boy was right? Apparently Bitboy, like, a while ago was, like, get your funds out of FTX. So if he said that, like, yeah, good job, BitBoy. That's great. The take that I heard, and, like, I need to go and find out where he actually said this. But, like, the take that I heard is, like, Bit Boy kind of says a lot of things. But if he said that, then that was great. And if people listen to him, then that's great. Look, but generally, let's apply that to get your funds out of all exchanges. Like, you know, no one knows the next exchange. to kind of go bust, and this is why we have to go bankless.

Starting point is 00:25:02 Can we talk about the story? Can we continue the story here? Yeah. All right. So now we're going to, that was the emotional recap. Now we're going to talk about some of the things that have happened today. Yeah. Let's talk about CZ.

Starting point is 00:25:16 It all started with CZ. Yeah. And this is where it starts this morning, too. What's he tweeting here? Yeah. So CZ says, in the spirit of transparency, might as well share the actual note. an actually like a memo sent to the finance team. So apparently finance employees are called Binancians.

Starting point is 00:25:33 And CZ says, given the events that transpired over the last couple of days, I want to reiterate a few points. One, we did not master this or anything related to it. It was less than 24 hours ago that SBF called me. And before that, I had very little knowledge of the internal state of things at FTX. I could do some mental calculations with our revenues to guess theirs, but it would never be accurate. I was surprised when he wanted to talk.

Starting point is 00:25:53 My first reaction was he wants to do an OT. deal, but here we are. Two, as a due diligence for the deal is ongoing, I want to remind everyone, everyone do not trade FTT tokens. If you have a bag, you have a bag, do not sell or buy. As soon as I finished a call with SPF yesterday, I asked our team to stop selling as an organization. Yes, we have a bag, but that's okay. More importantly, we need to hold ourselves to a higher standard than even banks. Three, obviously, do not comment on the deal publicly or internally. If you are not directly involved, do not ask. We have a good team handling it. Things will play out. That's about the audit that they are, uh, finances auditing FTX for FtX going down is not good for

Starting point is 00:26:28 anyone in the industry. Do not view it as a win for us. User confidence is severely shaken. Regulators will scrutinize exchanges even more. Licenses around the global get harder and people, uh, now think that we are the biggest and will attack us more. Uh, that that's, that's okay. We are used to being open and leaning into headwinds. In fact, we embrace scrutiny. We must significantly increase our transparency, proof of reserves, insurance funds, etc. A lot more to come in this area. We have a lot of tough work ahead of us, not to mention prices swinging wildly. Five, speaking of prices, as I have said many times over the years, ignore the prices. Let's keep our heads down and focus on building products people use. It has worked for us for years. And

Starting point is 00:27:04 today is, lastly, obviously, no exception. And lastly, I want to say that I'm proud of each and every one of you for all of your hard work as a team. Thank you. We have still many challenges ahead. Let's continue to push ahead and help increase the freedom of money all around the world, steadily and consistently. Ryan, what's your reaction to this memo? Look, I mean, people said it's transparent, and I totally agree. I think it's extremely transparent, yeah. But there is a side of like, yeah, true transparency shares everything, of course. And this is like selective transparency, which is interesting.

Starting point is 00:27:33 So look, I think CZ is two strategy boss to like, I'm like, he knows he's very, he knows exactly what he's doing. He's totally in command. So he, while this is a transparent, I'm sure. this was a real internal memo, he also chose to share it very strategically. Everything, everything he does is very intentional, yeah. Yes. So I will give it that context. So the question is like, what is he saying and why is he saying it?

Starting point is 00:28:03 I think that, you know, the point to you, due diligence for the deal is still ongoing. So he's just reestablishing that like, no, finance has not acquired FTX. There's an LOI and we're still doing. due diligence. And, you know, fourth, he's kind of giving a reason that this is, this is not good for everyone in the industry. So maybe that is a driving force for why CZ comes in and rescues the thing. I guess the big question to me is like, because maybe we'll get to this, but reports after this have been saying that CZ

Starting point is 00:28:39 finance is considering walking away from the deal. And hearing that is also kind of to be expected as well as part of, of like art of the negotiation, art of the deal type stuff, right? Like you just, maybe we'll walk away. Like, you know, in order to get the best terms. But it's just, I guess it's hard to know what to, what to believe at this point or what CZ's true intentions are. And maybe he doesn't know until they fully do the due diligence here that blowback from the community. David, the government may even be stepping in here in some way. Like, there could be a lot of We're not privy to.

Starting point is 00:29:19 The chat is being much more skeptical on CZ than we are. People are saying that he is a mastermind. He coordinated, orchestrated everything. I don't know. I kind of, I'm ready to take CZ at face value, to be honest. I don't know. I think both of these things can be true. I think he is a mastermind.

Starting point is 00:29:40 But I also think that he's played the long-term game in crypto, somewhat, at least much more so than SBF or SBF wouldn't be in this place of weakness. Yeah. So this is a tweet out of a ledger who is saying that Sam is deleting tweets and the tweet being deleted is a tweet that says FTX is fine, assets are fine, and another tweet that says, FTX has enough to cover all client holdings. We don't invest client assets even in treasuries. The idea is that these tweets are being deleted because they're wrong at best and perhaps lies at worse. And if they're lied, then that's fraud. Let's be clear on two things.

Starting point is 00:30:19 One, Sam, you can't delete things from the internet. Yeah, still got it. Like the internet remembers. And number two, I'm doubtful this was actually SBF. I'm sure it's legal. I think it's been legal team and lawyers and PR for the past at least 36 hours, 48 hours, yeah. But David, let's remember what he said, November 7th, the context for this.

Starting point is 00:30:40 FTCS are fine. Assets are fine. FTCS is fine. FTCS underline. Has it. enough to cover all client holdings. We don't invest client assets even in treasuries. These are, if any of these things are not true, I mean, what is, what do you call this tweet? Outright lying? Law, fraud, deception. Lying and fraud are like the same, right? Like,

Starting point is 00:31:03 it's just like fraud is just like a lie that's in court? I think there's, I don't think you can, yes, I think this, like, you know, I don't know what the legal distinctions between these things are, but fraud is certainly a crime. especially when you're a crypto exchange and a banker. This was a big oof. And so here is a picture of an old Sam tweet that says, biggest things here are making sure no one goes under. It's making sure that one, it's not to unsuspecting retail.

Starting point is 00:31:30 Two, that risks are properly disclosed. And three, no contagion. And so this was when it was back in June. And so it's just like a big oof because. And this was after in the context of after three, I was capital right down, right? Right. And then Sam's weighing in on this.

Starting point is 00:31:47 Yes, exactly. And he's like, it's not, what is he saying here? If something goes down, you have to make sure, number one, it doesn't affect unsuspecting retail. Number two, the risks were properly disclosed. And number three, it's no contagion. I think we got all those boxes checked. Yeah. I don't think retail and FTX is feeling particularly good about this.

Starting point is 00:32:07 I think they're feeling pretty affected right now. I don't think the risks of depositing funds into FTX were fully disliked. close. And by the way, do you know, David, the chat was saying this, you can still deposit funds into FTX. You can still deposit money into FTX. If you deposit that down. Right. And because like, you know, people, sometimes people don't check. They are, they aren't in crypto Twitter. They aren't following the news. So if you deposit money into FTCS, it's just like, and it's gone. You know, that meme? That means the bank of like, you give the money to the bank and then they say, and it's gone. It's literally that. You're putting it money into a, oh, yeah. You can watch it on

Starting point is 00:32:43 chain. People are actually sending money to FTCS right now. And number three, no contagion. We're definitely... Oh, we're definitely talking about contagion. We're well beyond contagion. Yeah, that's what we're talking about next. Yeah. Even Edwards Snowden is giving his takes here. So this is Edward Snowden deleting the tweet about, or retweeting the tweet about slam deleting his tweets saying, and they call me a criminal. I think this is one of the bigger questions is like, is SBF in legal trouble? And I think the answer to that question is going to be a function of how big the hole is on the FTX balance sheet. We do not know. Can we say yes?

Starting point is 00:33:21 I mean, the fact that it's got... We just don't know how much at this point. We just don't know how much, yeah. I mean, can't we just, like, let's connect some dots here. Yeah, I mean, we're... Yeah, things are going to courts at the very least. I think whether he is personally in legal trouble is perhaps still up in the air. Yeah.

Starting point is 00:33:36 This is the SBF to you investors. This is a letter that appears to be legitimate. from the mouth of SBF. And he says this. This was yesterday. To his investors, of course, the investors in FTX. I'm sorry, I've been hard to contact the last few days. I wish I could have been more communicative during this process.

Starting point is 00:33:57 But unfortunately, I wasn't able to be. Things were coming together dynamically. Wow, that's an understatement. We've entered into a non-buy agreement with finance to buy FTCs. What does this mean? Exactly. That's a good question. Unfortunately, I don't have a perfect answer for you because the details are so

Starting point is 00:34:12 being hashed out. We'll keep you updated as we learn more over the next days in weeks. This is key. Our first priority, he says, is to protect customers and the industry. That's been guiding what we do. How's it? We're optimistic that will accomplish all of these, which means that we'll soon be focusing on our second priority, our shareholders, first depositors, second shareholders. That should be the stacking order. Again, I wish I had more details for you guys right now. I don't yet. I'll give them as they're hashed out, but protecting our shareholders is our highest priority outside of non-negotiable ones. I am likely to be very swamped for the next few days, so unfortunately, I probably won't have much time for a bit. And then he refers to somebody on the team who might be, have some more time.

Starting point is 00:34:55 And he says, he'll write back soon later when he has more details. That is the message from SBF. What do you make of this? It's, I think if you scroll down, I think Aubrey Strollwell had a really good take. yeah, there we go. That's my opinion. You're on your own? You're on your own. Poo, pew, pew, pew. We're out of here. Basically saying, you guys are a last to get reimbursed. Now, this is something I think that is breaking, actually. So this was a story from this morning from CoinDesk saying

Starting point is 00:35:27 Binance is strongly leaning towards scrapping FDX. David, I think while we've started live streaming, we may have a different report. An additional report, a developing report. Yeah. So this is what came out this morning. is like, ooh, Binance took a look at the balance sheet and they got real scared. The most recent report, which chat was just blowing up about, $1.1 finance FTX deal is off the table unless FTX U.S. is a part of the package, which FTX U.S. and FTX are different entities.

Starting point is 00:35:57 Same brand in the same way that Binance U.S. And what's a $1.1 billion? So that is how much Bynance or FTX is worth. So FTCX is worth one. Wait, wait. One dollar? $1 because they have an X number of billion dollar hole on their balance sheet. So they owe money.

Starting point is 00:36:16 And so the reason why somebody like Binance would buy FTX is because they have employees, they have a network, they have branding, they have a stadium. The dollar is just a symbol that you're buying. It's basically liability is not assets. You are buying liabilities, not assets, right. It could be $10. It could be $69. It could be $420, but it's one in this case.

Starting point is 00:36:36 Yeah, you are buying debt. So you, like, it's not, it's not cool to go buy this FDX thing. You are buying liabilities. So, like, I mean, Ryan, you want to go buy FTCS for $1? I do not. Do you want to take on the responsibility of repaying billions of dollars or customer deposits? No, thanks.

Starting point is 00:36:54 Well, see, neither does CZ unless, allegedly, FTX U.S. is a part of the package. All right. Well, you know what this headline reads to me? Negotiation. Yeah. This is a CZ negotiation. I want FDX too. What's Sam going to say?

Starting point is 00:37:12 I mean, he's going to say, yes, sir. You can have FDX as well. Like what other choices? I don't, again, I don't know. I'm not a lawyer. But if the choice is saying yes or going to jail, that might be the rock and the hard place that Sam finds himself in.

Starting point is 00:37:27 And one of those choices is easier than the others. Which one? Saying yes to CZ versus going to jail. Not going to jail? Not going to jail. That one? Yeah. Yeah.

Starting point is 00:37:36 It definitely be depressing. reference. What are we looking at here? This is a headline from Bloomberg, whose main, mainstream media financial news is reporting on this. Yeah, so the headline here, Sam Bankman-Frieds, FTCS Empire faces U.S. probe into client funds and lending. And so this is the, this is regulators coming for crypto because we messed up. We didn't self-regulate. Wait, me, we? Yes, us, all of us. We did? We did. We did. We, uh, an industry messed up. I have a hard time with that.

Starting point is 00:38:10 I understand that take. I also have a hard time with that. Regulators coming in. It's frustrating. I'll go to the SEC now and it's frustrating that this is happening after the fact, not before, but yet here we are. But now FTX is getting a probe so I think we can expect, if not willing clarity, then force clarity because of its SEC and CFTC probes.

Starting point is 00:38:35 So the three, four-letter institutions are now getting involved. I think the big question, which we're still going to get to you a little bit later, in all of this, the acquisition, all of this, and even kind of the investigation by the authorities is how big is the whole? How big is the whole? Well, that's what we need to get to eventually. So what happened this morning? Yeah, so this is another quote out of DB.

Starting point is 00:38:59 I don't know this source, but are they saying the legal and compliance teams all just quit? oof. I mean, what other message can you take away from how big the hole is when you see the legal and compliance team just like capitulated? They're just abandoning shit.

Starting point is 00:39:16 Yeah, they're like, hey, hey guys, do you want to help us like plug the holes in this ship? And they're like, no, we're bailing out of this ship. We're out of here. Nope. Taking on too much water. We don't want to end up in an orange jumpsuit either.

Starting point is 00:39:29 This is crazy, though, just to kind of zoom out. Apparently the chat, Brian. is Binance is officially walking away from the chat. I think that's supposed to be... Walking away from the what? Excuse me, the chat. The deal.

Starting point is 00:39:42 I think that's supposed to be regardless of whether or not. FtX, US, is involved or not. Oh, my God. You want to pull up the Bitcoin chart, the ether chart? Let's see what that's done to the markets. I don't know if I do. Do I have to? Yeah, let's do it.

Starting point is 00:39:57 That's what the... Okay. Well, I mean, we're at the lows, but we haven't broken down any further. Okay, but so where's this sourced here? Wall Street Journal. That's the Wall Street Journal, yeah. Wow. Yeah.

Starting point is 00:40:11 The headline here, if you're listening to this, Binance walks away from FDX deal according to company. When was that 340? That was five minutes ago. According to, well, so maybe it's more than negotiation posturing here, David. Can we linger on that for just a second? Yeah. What would it mean if Binance walks away?

Starting point is 00:40:34 from this deal? I think we are assuming that Binance is the most willing purchaser of FTX U.S. As in the deepest pockets, the deepest pockets, the most relevant company. And if they are saying that they are walking away from the deal, that means FTX is such a toxic balance sheet that no one will touch it. And whatever few remaining assets will be liquidated and the courts are going to determine who gets what. And if you have money in FTX, you are going to, after years of court battles, you are going

Starting point is 00:41:12 to be returned probably pennies on a dollar, depending on how big the hole is in FTX, which again, we do not know. So I think what this is implying is if CZ if finance walks away, then all FTX depositors have just been Michenskeed. Yeah. You've been Alex Mashinskied. Yeah. which of course is where Celsius is gone.

Starting point is 00:41:35 I'm going to shoot from the hip here and say less than 15 cents on the dollar. So this is what's crazy about some of these crypto bank lending institution failings, right, is you had Celsius Alex Machinsky that's going to bankruptcy court. People aren't getting their money back anytime soon. If they do, it'll be penny cents on the dollars after years of proceedings. You know, another comparison is Mount Gawks. You've been Machinskyed. You've been Mount Goxed.

Starting point is 00:42:04 With some of the crypto bank failures like BlockFi, for instance, there was a bailout for depositors. But David, guess who bailed them out? Tell me. Who bailed out BlockFi? You remember this. Oh, yeah. It was FCX.

Starting point is 00:42:20 What do we do? Oh, my God. Chat, can you link the Wall Street Journal post in chat? Yeah, we need to get to the source on that. Look at this, David. As we're kind of getting the source and confirming that a little bit further, there was a tweet from Depression BTC. Bro, he even said there might be an effing air drop for people that leave their funds on his exchange.

Starting point is 00:42:50 Dude, it's so bad. It's so bad. He didn't actually say it, but SBF retweeted a tweet that said, I can't wait for my FTX AirDrop for not moving any of my. my funds and SBF retweeted that. I hope that's actually the SBF account. It could be, that could be wrong. But like if that people are saying it is and everyone's saying it. So I'm kind of running with it. On the seventh, trying to prevent bank run doing it by any means necessary. If you're willing to tweet something about a prospective air drop, what else are you

Starting point is 00:43:16 willing to do? Are you willing to like lend Alameda FTX depositors funds in order to try to keep them solvent for some temporary period of time? I think to answer that question is yes. the Alameda research site is also gone completely wiped off the internet right now. Yeah, Alameda Research, that website is dead. We can, I think, say, we were speculating on this when I said when the FTT token fell below $22, that was the death of Alameda Research. I think that now that the website's gone, I think that we can confirm that. David, we're looking at the Wall Street Journal.

Starting point is 00:43:55 The team just dug up the link here. Bynet says it will walk away from the job. deal to buy FDX. Crypto exchange decision come as it conducts due diligence on FDX. The fact that it didn't take them that long to make that decision, it took them, what, 24 hours, maybe a little bit more, 24 hours implies the hole is big. The hole is too big. Yeah.

Starting point is 00:44:16 Real big. This isn't just a flesh wound, a gunshot. This is like a cannibal to the chest. Okay, I think, unless you want to go into something else, we can go into that tweet thread, Ryan, that explains the connection as to why. and how that hole got so big? You want you ready to go down that rabbit hole? Are you talking about, was it Lucas's tweet?

Starting point is 00:44:34 Or who did this? That was, let's see. Lucas. Yeah, this one. This one. Yep, yep. This is the one. This is speculation that, but, but.

Starting point is 00:44:43 It's pretty good speculation. Yes, yesterday. And it seems to be like the evidence is coming out that this, this theory could be more correct than not. So, yeah, what's the theory of how all of this happened and how, yeah, the whole got so big? So this is, when we. started the live stream yesterday, I kind of proposed this question as to like, why didn't Alameda research blow up like everyone else after the Three Arrow's Capital Contagion?

Starting point is 00:45:11 Like, why were they different? Because that did kind of stick out. Why was three, why was FTX able to buy up everyone while everyone else was bleeding? We didn't mean back in, back in May, like when we thought we flushed all the crap down the toilet. Yeah. And all the leverage and all the DGen was kind of flushed out of the system. And Bitcoin dropped to what? Definitely under 20K. Right. ETH dropped to like triple digits. 800. Yeah, right. You would have thought Alameda would have gotten flushed out in that whole process, along with the rest. Yeah. Another DGN hedge fund like through everyone got addicted to leverage in in 2021. And so everyone that was on leverage, Alameda was supposed to get flushed out. Yeah, Alameda didn't.

Starting point is 00:45:56 Why didn't Alameda get flushed out? So again, this is just speculation, but this Lucas newsy guy throws in a very good thread of some on-chain snooping that we'll go ahead and read out here. And he begins and says, I've found evidence that FTX might have provided a massive bailout for Alameda in Q2, which now came back to haunt them. 40 days ago, 173 million FTT tokens worth over 4 billion USD became active on chain, and a rabbit hole appeared. And so this is the rabbit hole that Lucas goes down.

Starting point is 00:46:26 That day, September 8th, over $8.6 billion of FTT was moved on chain. That was by far the largest daily move of FTT in tokens existence and one of the largest ERC20 daily moves we have ever recorded at Coin Metrics. Oh, if this guy works at Coin Metrics, yeah, oh, he does. He did. Yeah, he's a great, great snoop. Tweet 3, I went through all the transfers that happened that day using Coin Metrics Atlas and ranked them.

Starting point is 00:46:49 I found a peculiar transaction that interacted with a contract from the FTT ICO. this 2019 contract automatically released 173 million FTT tokens from the token's ICO address. The recipient of the $4.2 billion worth of FTT tokens was no one but Alameda research. So what, question mark. Alameda and FTX were intrinsically connected from day one and Alameda obviously participated in the FtX ICO, but what happened next was interesting. Alameda then sent the entire balance to the address of the deployer of the FTT ERC20, which was controlled by someone at FTX.

Starting point is 00:47:22 In other words, Alameda auto-vested $4.2 billion of FTT just to immediately send it back to FTX. Here's what I think happened. Alameda, as a conclusion of this, Alameda blew up in Q2 along with Three O's Capital and others. It only survived because it was able to secure funding from FTX using the collateral of the 172 million FTT tokens that was guaranteed to vest four months later. Once vested, all tokens were sent back as repayment. Remember, the FTT ICO contract Vest Automat. had FTCX let Alameda implore in May, their collapse would have ensured the subsequent liquidation of all FTT tokens vested in September. It would have been terrible for FTCS, so they found a way to avoid this scenario.

Starting point is 00:48:03 Before you go on, David, so what he's saying is the theory of how Alameda survived past three hours capital and the big blowup of all of the leveraged margin funds that were taking undue risk, which Alameda is probably part of that cohort, was they got funding for, from FTX using FTT tokens. And remember, that is the loyalty token, pseudo equity asset of FTX, which I believe entitled FTT owners to some portion of trading fees, something like this. So it's like this weird pseudo equity thing that's supposed to go up in proxy with the value of FTX.

Starting point is 00:48:44 That's the only reason they survived. So they would have been blown out of the water like all of the rest if it wasn't for Daddy FTX. that lent them some funds based on the value of FTT tokens. It's like a huge self-dealing kind of, I don't know, shady practice here. Right. And I'm assuming, this might be speculation on my part, but just to understand this, Alameda had FTT tokens vesting, $4.2 billion of FTT vesting. So they had that, but they didn't have that available.

Starting point is 00:49:22 So, and they needed money to not blow up. And so I'm assuming FTX sent Alameda like dollars under the contract. I might be speculating here. Under the contract that they, that FTX will get FTT tokens that Alameda will vest in the future. And then when Alameda did vest the FTT tokens in the future, they immediately sent them to FTX. And so I'm assuming that those were the customer deposits that people needed fact check me. this. The customer deposits that got created the hole in FTX that we see today, where

Starting point is 00:49:55 the money was the money that was sent to Alameda so Alameda wouldn't blow up. And Alameda signed an agreement with FTX to give them their FTT tokens once they vested. I think that is what's going on. Does that make sense? Yeah, it does. Let's continue. Okay, I'll go on to tweets. Let's see. Yeah, tweet number seven. The timing makes sense. Alameda and FTA FTCX essentially put all the chips on the table in Q2 and use that cash to bail others out. The solidified FTC's image as a solvent and responsible institution, which helped FTT's price. And that, honestly, that's what we were saying on bank this, Rand. That's like, yo.

Starting point is 00:50:34 Yesterday, our speculation. No, like, for the past, like, six months. Like, FTCS bought Block 5. They bought, like, Sam Bankman-Fried won the bear market because FTCX was so solvent and so profitable that it was able to buy up all the blood. Yeah, they were looking good. saying. Yeah, they looked like the responsible players left were like you know, of course like, you know,

Starting point is 00:50:55 Gemini, they're doing fine, Crackens doing fine, but the big the responsibles with deep pockets were like Coinbase, Brian Armstrong, but they weren't in acquisition mode. Binance and SBF. And Binance and SBF were kind of the bailout kings consolidating all of these things and they looked pretty clean.

Starting point is 00:51:14 Alameda looked like, looked like the fund that didn't blow up. Right, right? Exactly. You know, even in these chaotic market conditions, but it looks like maybe they did. And that was the start of SBF using depositor funds, training some FTT type tokens. The co-mingling kind of like continued there because he didn't want Alameda to go under at that point in time. Yeah, so this is why the price of FTT was so important to Alameda research.

Starting point is 00:51:44 They were like, we'll buy it all at $22. Guess what it's at right now, Ryan? I'm going to look. Are we talking about FTT tokens? FTT tokens. Okay. $22. $5.

Starting point is 00:51:56 Yeah. Yeah, it's $310 on your chart. It's $2.2.2 in a quarter on FTX. Look this. Look at this job. This is post, is this the market, this most recent candle here, is this the market figuring out about. Yeah. No one's coming to save FTT.

Starting point is 00:52:15 Yeah. I mean, this is what the chat is saying right now. By the way, should I be using something other than Coin Gecko for Life? Yes, you should. But it's, I find it endearing, Ryan, that you're not a charter. That's cute. That's cute. All right.

Starting point is 00:52:29 Yeah. Okay, so back into the, back into the Lucas, sorry, just to finish this thing off. The Alameda bailout likely put a dent on FTC's balance sheet to the point where it was no longer solvent. This would be fine if the price of FTT didn't collapse and a bank run would ensue. This is why Alameda tried to their best to protect FTT's price. And then it does continue. And then here's where things get crazier. There's a chance the folks from Binance knew about this arrangement between FTX and Alameda,

Starting point is 00:52:57 an opportunity emerge. This is where we're kind of like getting into the idea that CZ was a mastermind playing 4D chess, which he, when he made his memo, was like, no, I'm not a 4D chess mastermind. I'm just a guy making deals. But if you believe that CZ is a 4D chess playing mastermind, you might be into this. So there's a chance that the folks from Binance knew about this arrangement between FTX and Alameda, an opportunity emerged. As large holders of FTT, they could start deliberately tanking the market to force FTX to face a liquidity crunch, which is ultimately what happened

Starting point is 00:53:28 in the last 48 hours. Long and behold, Binance comes to FTX rescue. Did CZ just walk out with one of his largest competitors at the expense of a relatively large FTT bag, which he was going to unwind anyways, huge if true. And so then, all of the, this thread is basically 24 hours later, 21 hours. Four hours ago, Lucas adds to the thread saying, evidence that supports this hypothesis keeps coming out. FTX U.S. President Brett Harrison steps down a day before the September 28th transfer of FTT tokens and speculates that maybe he wasn't on board with a transaction that might look like outright fraud.

Starting point is 00:54:03 Wow. Okay. So I think the base of this theory checks out. The last part, I'm not sure, that checks out, is this all part of CZ's 40 chess move to take out FDX? I mean, I think part of that could be true. But, I mean, this doesn't serve the interests of finance or CZ. If they walk away from this deal, crypto prices are down real bad. This sets the industry back by 18 to 24 months.

Starting point is 00:54:29 We take a major black eye with regulators. Like, that's not in CZs and finance's interest. Am I wrong about that? Yeah, I think that's right. None of us want that to happen. Right. Yeah. I mean, even kind of like, shark business motivated CZ,

Starting point is 00:54:44 If that's your model of him, he wouldn't want that to happen either. Right. And just to tie this thread off, we'll skip to tweet number 14, the very last one, and then click the tweet that that is retweeting. Because that tweet is retweeting SBF saying, SBF, rotating a few FTX wallets today, mostly non-circulating. We do this periodically. Might be a few more coming.

Starting point is 00:55:06 It won't have any effect. So he's just saying, hey, we're doing some wallet stuff. The FTCX exchange is doing some wallet stuff. and this was the transfer of FTT tokens to Alameda. And so this is what that was. And so he was on Twitter saying, hey, we're going to send some FTT tokens around normal operations,

Starting point is 00:55:23 nothing to look, don't look beyond the curtain. How long ago was that? That was in September 28th. Yeah, crazy. Guys, there's more to talk about, we got to talk about some more of the contagion. I think we want to talk about like the emotions and the market.

Starting point is 00:55:38 Like the market reaction. Oh my God. No, the contagion is so crazy. Ryan, 10% of multi-coin capital had their fund on FTX. And so that's a fund that is related to all of their investments. And that's not just like the contagion conversation is huge. All right. Well, don't jump too far ahead of us because, David, it's a bear market.

Starting point is 00:55:57 We have to pay for the show. Guys, we'll be right back. We'll talk about all this. Talk about Salana a little bit more. Maybe talk about some of the regulation as well. But before we do, we want to thank the sponsors that made this episode possible. In all of my years in crypto, I've never been hacked, scammed, or lost money to a thief, and a lot of that credit goes to my Ledger Hardware wallet.

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Starting point is 00:58:37 Polygon, Arbitrum, or Boba Networks. Hey, guys, we're back. We got to talk about some of the contagion, talk about some of the response from around the space. There's also been some breaking news coming out of Binance that we want to cover. Just a tweet. New tweet just dropped.

Starting point is 00:58:53 Maybe nothing breaking from this. New Binance just dropped. Yeah. I think before we get to that Binance tweet, the other thing I was reading the chat logs during the break here, and people were upset about the NXO commercial that we just put on. Yeah. Let me just comment on that, guys.

Starting point is 00:59:09 So I have used crypto. Is this a confession time? I have used crypto banks and exchanges in the past, including centralized lending companies. Not very much, mostly just to test. Nexo has been among those. So is Celsius. So is BlockFi. I had my funds.

Starting point is 00:59:30 Like, I'm never getting my funds out of Celsius, just to test, right? NXO is a company that came out of the, you know, three hours capital contagion. Three hours capital contagion. They seemed strong, okay? They seemed like they were in a place to be able to weather the storm. But I just want to emphasize that we have no idea if it's a centralized exchange, if it's a crypto bank, if it's a lending and borrowing facility.

Starting point is 01:00:01 Neither David nor myself, no for sure, whether it's solid. I don't know if Wells Fargo is solvent. I don't know if Chase is solvent. I don't know if the banks I use in my everyday life are solvent. So this is a risk any time you give up your private keys and custody it with a third party. It's a risk. If you have funds in Coinbase right now, there is a risk. I trust Coinbase.

Starting point is 01:00:27 I trust Gemini, but I don't, I do the public bathroom thing. I don't keep my funds in there. I go in, I'm in and out, okay? And so I just want to make it clear that we are not sure where the next contagion to happen is. We sign these sponsors kind of like three months in advance. And so we have to finish our commitment with NXO. We'll definitely be reevaluating what we do with centralized companies in the future. And as far as we know, everything's fine with NXO, but like we don't know for sure.

Starting point is 01:01:04 And this is the beauty of DFI. Whenever possible, guys, we're going to put sponsors in front of you that are 100% defy aligned and 100% bankless tools. But sometimes they won't be. And so next day is an example of like, you can use it, choose cautiously. I would recommend not keeping a lot of your funds on exchanges at this point in time in general. And so just if you ever choose to do that, just enter it with caution, small part of your portfolio. Right. And we all have to remind ourselves like banklessness is a specific.

Starting point is 01:01:35 spectrum, some people are not ready to take on private keys. That is also a risk that I think if you're watching this live stream, you're probably ready to take on that risk, but many other people are not ready to take on that risk. So they're all tools and we consider them all. I mean, my dad, David, he's like, I think it's a greater risk for like some people, like my dad to custody his own private keys and like risk losing it versus holding on somewhere like Coinbase, for example. So we have to take that to into account. Okay, what is this tweet for Binance that just dropped?

Starting point is 01:02:09 $16,000. Okay, sorry. We'll get to the charts later. You need to learn how to use Trading View, dude. Okay, it's fine. It's never failed me. Yeah, okay. All right.

Starting point is 01:02:21 Back to Binance. Just tweeted this out. New Binance just dropped. As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. investigations, we have decided that we will not pursue the potential acquisition of FTX.com that dropped seven minutes ago, almost already has 10,000 likes. Well, that's that.

Starting point is 01:02:44 No one's coming to save us. That's, that'll be the end. So when banks fail, there's no bailout for us. We don't get bailouts, yeah. We don't get bailouts. And that's what we signed up for, isn't it? No bailouts. Yeah.

Starting point is 01:02:59 That's what we signed up for. Yeah, we don't get bailouts. That's the rules. It sounds like you're contemplating that. You're like, I was just like, well, if you're a centralized thing, you get bailouts sooner than a defy thing. No one ever is ever going to bail out MakerDAO or Uniswap or Avey. What I'm saying is when I say bailouts, it's not like a private company bailout. That makes sense to me.

Starting point is 01:03:25 That's a business decision. I think when people think of bailouts in the way I just used it is like 2008 financial crisis bailout. where you socialize your losses. So, okay, so like socialize your losses like printing money, right? We printed money to save the banks in 2008. You know what? Remember, Ryan, like two weeks ago, we were talking about how FTX was teasing, dabbling with a new stable coin.

Starting point is 01:03:47 Yeah. They were going to mint their own stable coin and bail themselves out because they knew they had a hole in the balance sheet. Don't tell me that. That's what they were going to do. They had insolvency. They were going to mint their own stable coin and print their stable coin. All this is coming out.

Starting point is 01:04:01 Does it, okay, so did it seem more? weird when we were doing that live stream with SBF and Vorhe's like two weeks ago. Now that you think about it now you look back on it, right? Did we talk to SBF before? Did he seem like off his game? Yes. Nervous to you? Did he seem like.

Starting point is 01:04:16 And everyone saw it. Everyone saw that like Sam felt cornered. And like on, you and I were both like, you know, props to Sam for like being public and engaging this conversations publicly. But like I think he was like running out of tools. the tool belt like he was running out of ammo well imagine if you like imagine the stress that he'd be under right yeah at that point in time just like the pure and like um he just seemed very distracted uh there was like decent amount of kind of like movement jittering that sort of thing and now that

Starting point is 01:04:50 i look back on that conversation um which by the way some people have said kind of kicked this whole thing off i don't know if that's true or not but um it was a different sam than the sam we talked to I don't know, back in March of last year, whatever. All right, so let's talk about contagion. Oh, yeah. What's that? Crypto condom, this is actually a Twitter account that we've actually used before. So despite the less than professional name, we don't really care about professionalism.

Starting point is 01:05:17 He's a good Twitter account. And he goes, calling all researchers threat incoming, but this contagion, this is a contagion we know of so far. Please provide info in the replies if you know of any other so I can compile and share. A lot more contagion will come out. entities with FTX and Alamedo exposure will be short targets. And so he goes through a list of all entities or things that are should be considered when we talk about contagion. Coup coin has some exposure. Galaxy Digital for 76 million. Salana is $6 billion market cap right now. I'm pretty sure that's less. FTT, the token is now less than $4. It's a little bit above two.

Starting point is 01:05:53 Stargate allegedly bought a bunch of FTT tokens. Voyager. Ooh, Voyager again. Series C investors jump capital, multi-coin. Wait, what's multi-coin? What happened to multi-coin? They just had a ton of FTX exposure. And in addition to that, we'll talk about this next. They had a lot of assets on FTX itself. A 10% right?

Starting point is 01:06:13 Yeah, 10% of their fund. So their fund is down 10%. Okay. Aptos had investment from FTX in their series A. Suey had FTX investments from their series A. Tezos, like, so all these people, what this crypto condom is doing is saying, hey, calling all researchers, go. investigate these things. Go snoop. Go see how bad the contagion is. Hopefully the cancer isn't that

Starting point is 01:06:35 bad, but FTX was at the very epicenter of a lot of just crypto-C-Fi. David, did you see that the headline? Tom Brady was like a headline 650 million or something of their their net worth tied up in FTX and related investments. Yeah. And he like doubled down on FTX over and over and again. Yeah. FTX arena? So quick comment in the chat. Guys, what's going to happen to FTX US. Probably nothing, I think, two separate entities. And honestly, you have to capitulate. And this is what the other frustrating thing, Ryan, is about.

Starting point is 01:07:10 It's like, FTCS is probably fine because it's a regulated onshore exchange that is not connected to FTS. People don't know those things are separate. They are separate. Right. And so FTCS is largely solvent as far as we know in the same way that Coinbase is because of regulations. David, David, they're going to need a rebrand. after this. Yeah, that's for sure. Yeah, I think. But when you look at this list, right, it's interesting,

Starting point is 01:07:36 is we got nothing really affecting Bitcoin and then kind of fallout, price fallout, like the liquidity slippage. Bitcoin is being liquidated to pay for insolvency, yeah. Nothing really like affecting like the Coinbase of the world. Right. Not too much in the Ethereum community. Yeah. It's kind of, this is a question of like, after the dust settles, how do we rebuild and what communities come back? stronger and faster. I know we're going to get to this, but I mean, it's been a rough times for Solana. We'll pull up some Solana charts later.

Starting point is 01:08:07 But this is what you were talking about, multi-coin capital, hit by FDX collapse. They had 10% of their funds, A-U-M, stuck on the exchanges. Wow. Right. What does that mean? The tokens still exist. No, no, no. They're funds.

Starting point is 01:08:24 They're A-U-M. Right. Okay. So, Samani's, what, what's multi-coin worth? Billions. Billions, yeah. Now, I mean, what, not today, maybe? 10% less.

Starting point is 01:08:33 10% of that investor funds was locked inside of FDX. We're not talking about, like, down from all-time high. We're talking about money that's not recoverable, money that's lost. Right. Just with, like, the other depositors. I'm confused about. Like, Alameda was, like, this hedge fund that was, like, playing trading games and, and, like, liquiding people left and right and making a ton of money.

Starting point is 01:08:56 And then, but, like, okay, then. Where's their money? Like, where did it go? David. Who's got all the money? The money went somewhere. Who liquidated Alameda? Kyle Simani didn't know about this.

Starting point is 01:09:09 All right. Like, do you see the tweet? He tweeted out, I think is like on a Sunday or a Monday. He was like, I'm paraphrasing. Ignore the FUD. And it just like. Also an investor in FTCS. So if he doesn't know, he's got his, his multi-coin funds on FDX, right?

Starting point is 01:09:28 And he's part of that kind of inner investor circle of, like, FTCS. I'm not going to sell on in this, but FDX. Like, he should be in the know here. Right. And he's got exposure. Yeah. Galaxy Digital reveals $77 million of exposure to FTCS in Q3. So these are not only people being hit by contagion, but also creating contagion as well.

Starting point is 01:09:52 So when somebody is hit by contagion, they pass along that contagion. What a year for our friend, Novo. Yeah, sorry, Novo. brutal that's rough uh Mike Dovergratz uh so Frank Shapiro out of the block uh just lists out of all the ftx investors who you know spent money on something that is worth significantly less now black rock Sequoia paradigm tiger global soft bank circle multi-coin banek Ontario pension fund this is pension years money in this thing that's bad that's that's what triggers the regulators we don't like that geez how long is it going to be until pension

Starting point is 01:10:26 Do you remember the meme of like the pension funds are coming? That's what's 2000. Oh, God. Yeah. So this is what Vitalik was saying was like, hey, let's not like try to go for the ETF thing because of stuff like this. Like let's not integrate ourselves with TradFi too soon because, yeah. The CFI regulations are coming, my friend. Right.

Starting point is 01:10:48 Big time. Big time. The drums are beating. So here's the tweet. Not only does FTX have the salon exposure that they have to upload, but they also have led the series A round for both. Aptos and Sui, so Apthos and Sui are going to have a hard time keeping their token valuations propped up when they have a persistent seller. I can't believe the audacity of leading these seed rounds when you have like, if what

Starting point is 01:11:09 really happened is Alameda's like went broke back in May and like, and you're still doing this? Yeah. Wow. Yeah. This is FtXUS saying it's not impacted by the liquidity. Yeah, separate entities. But it has got to be impacted, right? everyone's got to be withdrawing from FTX US as well.

Starting point is 01:11:28 I mean, like, I wouldn't keep my funds in there. This is back to like the sad versus mad. So here the crypto Twitter takes. What's this one from Fubbar? This is a Xer Fubar. Real talk. And these are the sort of the takes that I like woke up to this morning, Ryan. And so I was like, oh shit, we have to clean this up.

Starting point is 01:11:47 So Fubar says, real talk. The FtX news is the saddest I felt about the industry since joining. Previous blowups were either obviously failed mechanisms or prop shops with a series of bad bets. That's Terra Luna and then Three Ours Capital. Even Celsius gave sufficient warning with their fake yield products, saying like, well, the writing was on the wall for Celsius. And he continues, whereas SBF and company had a clear ride to the top, one of the best products around, drawing, drawing, everyone knew about the Alameda commingling, but it was assumed it was a small blot on an otherwise successful business. And that Ryan is the part where I realized

Starting point is 01:12:22 that like this isn't just like popcorn time where you watch billionaire war games happen. FTX, one of the best products around, created a ton of value, made useful services and useful products for many, many people. And then because they leverage their customers' deposits and they took risky bets, those products and services will be destroyed. This is a capital destruction event. You know, you know, the metaphor of like the broken window of capitalism, or like if you go and break a window, do you create economic activity because you go and spend money at the repair shop and you spend money for the contractor? This is that fallacy. Like, if you break one of the biggest exchanges, this is a capital destruction event. The world is off in a worse off place because we do not

Starting point is 01:13:07 have access to the good products and services that FTX produced as a result of this. And then Foo-Ber continues and goes, then the lying, the cheating, the stealing comes out. That level of losses doesn't happen on accident. Why the need for such greed? Yes. Why? Why the need for such greed? Why?

Starting point is 01:13:24 He's saying like SBF won. He won. He made one of the biggest exchanges in the shortest amount of time, but he kept on rolling the dice. Billionaire status like confirmed. Right. That wasn't enough. Yeah.

Starting point is 01:13:38 And I think he finished that and says, I got tricked. And I think that is what a lot of people in this industry feels like. You want to read this one? Yeah. This is from Kobe. Speaking of getting tricked By the way, we're doing a bankless Plus up only live stream

Starting point is 01:13:55 Never thought possible Therapy session, live stream Therapy session, yeah, cope room Definitely coping together at 10 p.m. Eastern tonight So come back for that It's going to be a different flavor. I mean, in this episode we're going through the day's events In that episode, I don't know what we're going to be talking about

Starting point is 01:14:11 It's up only, so it could be anything. But Kobe's saying, Arthur can't do a show today I guess he's talking about Arthur Hayes. I'm going back to bed. My decade of crypto, this exchange rug is by far the worst ever. Almost no time to react. And lots of long-term and smart crypto people impacted by it. Almost no time to react.

Starting point is 01:14:30 This is exchange rug is by far the worst ever. All right. So he's saying this is worth three hours capital. It's worse than Luna Terra. It's worse than Mount Gox. It's worse than all of them. What do you think about this take? Do you feel like this is worse?

Starting point is 01:14:45 When Kobe says that, this is the worst rug of all time. That is something to sit and reflect upon. I don't think he's just shooting from the hip with this take. I don't think Kobe does that. When Kobe says that this is the worst of all time, and he's been in crypto longer than you and I have, Ryan, he's seen it all. He's been since before Mount Cox. And he's saying that this is the worst of all time. Why do you think that? So I don't know if it'll have quite the impact in terms of total supply or like total market cap, like, I mean, percentage of market cap destroyed. But I think in, you know, I guess there's one element of, I think people thought that they could trust FDX.

Starting point is 01:15:23 Right, that was like, he was brought to an Algo St. All over San Francisco, bro. Yeah. At a time, he's on sports arena. Yeah, he bought a goddamn arena. That's the problem here. Yeah, I mean, if you were doing the Algo Stablecoin thing, right, that's one thing. You kind of, like, you're doing some, back in 2013, Mount Cox.

Starting point is 01:15:40 I mean, what do you expect? We're like three years into this crypto experiment. It's a magic they get, like, what do you expect? Right. This is different. I mean, this was, again, the professionals who were supposed to be doing the right thing here. This was the guy that was in D.C. This is a three-hour's level capital of irresponsibility, and he was also lobbying.

Starting point is 01:16:00 He was our interface to the regulators. Can you believe that? Today was the most depressing day I've seen. This is Tom Shawnessy of Delphi Digital, so take that into account where Delphi Labs had a significant exposure to Terra Luna. And so that's what Tom's like... Bad day. bad day. And he is saying that this day is the most depressing day he's seen in his three crypto bear markets. Oh, wait, no, that's Tom. I mix up Tom's. I mix up Tom's. That's not right.

Starting point is 01:16:26 Wrong Tom? No, no, no. This is, are you sure? That's Tom from Delphi. Oh, that is Tom. That is Tom. Okay, never mind. Yeah, you didn't. You got the right Tom. He said it's the most depressing day. If affected, you will recover. Outside of the toxicity, remember that there are smart, high integrity people building the space forward. David, we will recover from this. Yeah, we always will. I'm not worried about crypto, like, in the long run. But, yeah, I think a lot of people got hurt today. The most depressing day, I guess, I don't know, I understand why a lot of people feel that way,

Starting point is 01:16:58 particularly those affected. This is Larry Sermak from the block who's also replying to a crypto and-on account, a cat-themed crypto and-on account. Do you want to scroll up, Ryan? Assuming FTX funds are gone, this is the biggest one-day loss in cat's life. You need to do it in Cat Voice, David. I don't know what a Cat Voice is, right? Maybe the saddest part is Cat may no longer sponsor streamers,

Starting point is 01:17:23 art software, open source projects, because Cat lost a million dollars in year. Money was always a number. Cat will still live in nice hotels is okay. And Larry Siramack from the block says, biggest one day loss for me as well. Funny, since I actively said people should withdraw even if sub 1% chance that FDX would be insolvent,

Starting point is 01:17:41 but I was too lazy to do it myself, and actually naively trusted Sam and multiple employees who all said everything was above board, we'll bounce back, we'll bounce back cat. So these are our people. These are the crypto-tritter tribes. These are the people that got duped by Sam's like error of trustworthiness. People that knew better and will admit that they knew better, but they were still smashed by this. And this is where I have to say is like, um, uh, there, again, we said this about, kind of lunatera there should be no grave dancing about this uh i mean it you are just fortunate that something like this didn't happen to you you may think it's because you're smarter you may

Starting point is 01:18:23 think it's because uh you listen to the right advice you went bankless sooner all of those things can be partially true but also i mean like we really mean it when we say crypto is risky it's not for everyone right you could lose what you put in that can happen to you on this crypto journey and And we can try to minimize our risk in lots of ways. But I think it's important that we just remain compassionate to those on the journey that just got wrecked today as we take some of the learning. For their own. Yeah. So here's Tensai Capital.

Starting point is 01:18:58 He's saying, looking to sell my FTX balance, DM me if interested serious offers only because his balance is a million dollars plus. So this guy had a million dollars on the exchange and he's taking offers for somebody to give himself pennies on the dollar. Here's Eric, Eric Connor retweeting an article that is talking about FTC's, excuse me, Sam Bankman's Reeds' loss in net worth. So Sam Bankman's Freed's, 53% stake in FDX was worth about $6.2 billion before Tuesday's takeover, which is now happening. So that actually might be worth zero, according to Bloomberg's Billionaire's Index, based on that funding round and subsequent performance of publicly traded crypto companies. FTCS wasn't Sam Bankman's Street's most valuable asset, though. His crypto trading from Alameda Research, which I believe he owned 90%

Starting point is 01:19:41 of Ryan contributed $7.4 billion to his personal fortune, which might also be at zero now. The Bloomberg wealth index assumes existing FTCS investors, including SBF, will be completely wiped out by Binance's bailout, and the root of the exchange's problem stemmed from Alameda. As a result, both FTCS and Alameda are given a $1 value. Might as well call it zero. That leaves FSPF's net worth to be about $1 billion. Down from $15.6 billion heading into Tuesday, the 94% loss is the biggest. one-day collapse ever among billionaires tracked by Bloomberg.

Starting point is 01:20:15 Great vote of confidence for crypto. Still got a billion dollars, though. For now. I mean, we'll see. There could be lots of legal fallout from this, of course. This is tweet. What are we looking at here? Yeah, so the section of tweets that we have next is all about the Solana ecosystem

Starting point is 01:20:33 because Solana is caught up in the crossfire here. Look at the chart real quick for Solana. Pull up in the chart. You can do. Start there. Yeah. Eat a chat. I'm using coin gecko. Sorry, I suck.

Starting point is 01:20:47 He's just told the chat to eat it. I'm sorry, it's me. I suck. All right. What are we looking at here? Should I do seven day? Yeah, I might as well do seven days. Scroll down a little bit so we can see the down badness in the percentage. If you scroll down, it'll show you how bad it's down over seven days. Oof, down 60% in seven days. This is just like association. SBF was a big salon investor. Remember SBF's... I'd bags.

Starting point is 01:21:11 Sell me all your soul at $3 and then F off tweet. And so, you know. By the way, if anyone ever says that, just for future bear markets when you get, you know, all drunk on kind of the upward price movements. If anyone ever says something like that, just run. Head to the exit. That is at $3. So he's still up 5X on all of that sold.

Starting point is 01:21:32 We'll see. Well, he's liquidating it. Do you know in this in this Salana community, too, there's some massive. of unlocks that are happening, like concurrently with this? It's like massive investor unlocks. Yeah. Hang on. In chat saying FDBF is filed for bankruptcy.

Starting point is 01:21:49 I'm going to Google search that. What? Guys, get us a link if you can. No, I don't think that's right. I don't think that's right. Okay. Well, I mean, we'll see. I'll think that's right.

Starting point is 01:22:01 All right. So back to Seoul community. Solana is just like caught in the Crossfire, right? Because like multi-coins down bad has a bunch of soul on the balance sheet. FTCX is down bad, has a bunch of soul on the balance sheet. Sam himself, personally, probably own soul. So there's a bunch of just like cell pressure for Solana. And so that's unfortunate for Solana. However, Ryan, I think there's a big question right now is, is Solana mutually sufficiently independent from all of the people that own soul? And will the Solana ecosystem survive? I think

Starting point is 01:22:35 yes. Yes, I think they'll survive. I think Salana will be fine. It will take a long time to repair and price may never like it may take years if ever for it to reach all-time highs um this is a this is a massive event i mean i know a lot of people who are in salana just because sbf supported them uh salana so much it was kind of like spf's pet uh you know layer one right um what's this uh so this is the data nerd saying 47 million uh sold tokens which is almost a billion dollars uh at the previous price so that's less now will be unstaked by the end of epoch 370 up from 18 million reported earlier. I think this might have already happened by now. But basically, like, Seoul is being unstaked now as the price is going down.

Starting point is 01:23:22 A billion dollars unstaked by the end of epoch 730. That's like today, right? Yes, that's today. Can you, Ryan... 13% of the supply. Yeah. Yeah. Can you open up Trading View?

Starting point is 01:23:35 And we'll guide you through some charts. because ether is about to break through $1,100. Okay, there's your ETH BTC. Just, yeah, type in ETH. ETH and do the Coinbase, fourth down. That's the market cap of ETH. And then you zoomed in. Okay, so go back up to the ticker in the top left.

Starting point is 01:23:57 We don't want this one. Yeah, type in ETH, fourth one down, ETHUSD, Coinbase. One more, one more. There we go. Ooh, yeah, here we go. Okay, so, you know, this is new lows for Ether. We'll pull up Bitcoin in a second. So Ether about to break through $1,100.

Starting point is 01:24:15 Let's pull up Bitcoin. It's new lows. It's not lows, lows. Can we just scroll out? Like, what is Lowe's Lowe's? Yeah, so go up to and hit the one hour thing. You guys, do you see what I have to deal with when Ryan has to chart? David is teaching me real time.

Starting point is 01:24:31 Do you want one day? Yeah, give me one day. Yeah, so here we are. And then we can zoom in a little bit to like 2022, just, just 20 2020. There it is. Here it is, right. So, yeah, this is, this is getting down.

Starting point is 01:24:42 And then, okay, so go, go back up and see the volume below in the top left corner. You can hit the eyeball with that if you hover a little bit lower, a little bit lower. A little bit higher. Right what? Yeah. Someone's also saying check Bitcoin, check Binance Twitter. I wonder if. Hey, Dave. Dave in the chat. Can you see if CZ or Binance to read anything? Yeah, Binance or Bitcoin, ooh, below 1600.

Starting point is 01:25:21 That is a low. That is a low. That is a low. That is a low sense it crossed that. We're almost all-time lows. Not for, no, right. We're bull market lows. The cycle lows for Bitcoin, for ETH. And then we are. We've exceeded lows. Last low was, I guess, around the 1700s. Mm-hmm. Mm-hmm. And now we're at 1600s.

Starting point is 01:25:43 Wow. Could you imagine, David, seeing 10K Bitcoin again? Yeah, that's... How low do we go? 10K, God, strike fear into my heart. Dude, we're close. 50% off. I mean, that's real close. Yeah.

Starting point is 01:25:54 You want to... Can you pull up... I'm sorry to do this. Can you pull up ultrasonic.money? Oh, God. I don't know. Should I? Why? I mean, this is not...

Starting point is 01:26:04 You should qualify this. So we're just burning a ton. So there, oh, we know that. I'm just not happy about this right now. I put a tweet out. I was like,

Starting point is 01:26:14 oh, like Ethan is finally ultrasound and Udi Werthheimer was like, not now, David. I'm sorry. I feel that way, David. This is the one nice shining light

Starting point is 01:26:22 on the week of, a week of shit. Yeah, depends on you are. I just think this is, it's okay. It's a paint chart. All right.

Starting point is 01:26:32 David, David thinks it's okay. I say, give it some space. Yeah. All right. So what about, I guess, other crypto prices? Anything else we should look at? We can go back to the FTT token, but that's about it. Can I just look at market cap? We are $873 billion, so down from a trillion. Big time. I don't remember seeing it below $900 billion before.

Starting point is 01:26:53 I think this might be lowest on the market cap, crypto market cap cap. I think this could be market cap lows. Yeah, significantly. My goodness. Okay. What about regulatory, David? Maybe that's one other thing we should have before. I don't really know too much. much right now because regulators are like they're like the fed they're a lagging indicator not a leading indicator um and so it's like oh sweet the feds have finally showed up great um i just think the big meta question is is spf in legal trouble um which we do not know okay so uh sum this up for us david um i think because um we're going to close this out your screen yeah um um So what happened over the last 24 hours for people late to this? Right.

Starting point is 01:27:41 To summarize, what's happened now? I mean, and by the way, at the beginning of this live stream, we're in a different place than we are now. It does look like finance has definitively walked away from the deal. So I guess what are the implications? Where are we now? And what can we look for in the next 24 hours? I'm sure Sam and FTX are going to go and solicit other. investment. I'm not optimistic about anyone else coming to the rescue because like I said earlier,

Starting point is 01:28:14 if finance isn't doing it, then who else is going to? They are the most relevant company. Tell me what that means for depositors. Even Brian Armstrong was like it doesn't even make sense for us to do it. Depositors, maybe there's some fumes left in the tank, but I think there's going to be a moment where SEC, CFTC steps in and says, all right, we're taking over, freeze everything. We're going to the courts, and there will be a liquidation event of FTCS's remaining assets to pay off creditors. There's going to be a squeeze to get into the door to get money back, whether you are an FTCS investor trying to get your money back. If you are a depositor into FDX, you are in line to get your money back. Everyone, it's like 2008, Ryan.

Starting point is 01:29:00 Everyone is lining up to get whatever remaining funds are available, and it's going to go to the court because people are want to get in the front of the line to get paid back first and it's going to be the courts that decide that. And so this is this is the story that when markets break down, we end up back in courts. And so that is what's going to happen. I think the most, the first thing, Ryan, that people will need to pay attention to is lawyers are going to step in and they're going to start giving their opinions as to whether if you are a customer depositor into FTX, where do you stand in line. Are you first or are you after investors? I think that's the most important information that I could see kind of coming out in the near term. I think that's the thing to pay attention to

Starting point is 01:29:44 next. Guys, I think that's all right. And I don't want to sugarcoat this. Neither David or nor I do. This is a pretty big deal. This is more than a flesh wound. This is a cannibal to the chest. It's going to take a while to recover from this. So I'll say that on the bright side, because don't look for weeks for these charts to recover, maybe not even months. It could take a very long time. On the bright side, I think, David,

Starting point is 01:30:19 this could be the final capitulation we need out of this bare market. I had a feeling. I had a feeling there was still some. some nastiness left. Nothing quantifiable, but like intuition telling, tell me it's like whether it was Mac or something, I had a feeling we would visit triple digit ETH again. And like, we're on the press,

Starting point is 01:30:40 but we're probably visit that. We're $132 away. We're going there, okay? You buying? Triple digit, absolute freaking loot. 900? Or are you going to wait for 800? I'll probably start 900.

Starting point is 01:30:54 Here's the thing. A lot of you guys will be tempted, to leave right now. Right? Throw up your hands in frustration. Even Kobe was like, hey, I've been here for a while and like I'm kind of done. All right. If you're still here, you're doing it right.

Starting point is 01:31:11 Bare markets are the time you make the money. Yeah. Not the bull markets. That's the feel good. That's kind of the carbs and sugar, right? Bear markets are when you're actually making money. These are when your buys at these low, low prices, when it's super painful, they will turn green.

Starting point is 01:31:29 when the bear when the bull market uh they will be the most green does this end like when the words sound hollow and when it sounds cliche and at some level when you don't want to hear it because you're like ryan shut up this is too painful right that's when you should be looking to buy and i'm not saying right now i'm not saying all lump sum you could dollar cost average you can do different things but this is how you play the crypto market and the bear market right as you buy when there is What is Buffett say? Blood in the streets. There's lots of blood.

Starting point is 01:32:03 There's blood. And it might flow for a while longer. We don't know. We don't know when the bleeding is going to stop. You got to stay here. If you're not staying here, you're not playing the game. Right. You know, so I guess that's what I would say.

Starting point is 01:32:17 And David, I know we've got kind of a moment of Zen, something to leave folks with as we exit. But remind us to what else is happening in Bankless because we're doing a live stream tonight. There's another time we're going to talk about this. First, the chat wants to remind you that that wasn't financial advice. But I would like to ask the chat. All right, you, chat, you give me financial advice.

Starting point is 01:32:40 I want to know what price that you're, yeah, where are you buying? So I can layer in my bids perhaps just before. Yeah, can we crowdsource some Bitcoin and Ether prices? But, okay, so tonight we're doing our live stream with Up Only. I think we probably won't be sharing tweets. I don't think we're going to be screen sharing. But yeah, Kobe and Ledger, we're going to live stream with them at 10 p.m. Eastern time. And so stay tuned for that.

Starting point is 01:33:05 That is in five and a half hours. Yeah. And so, oh, yeah, wow. Okay, people are talking about $600. Oh, God. Ow, ow, I don't want that number. Don't say it. I didn't want to delete the chat.

Starting point is 01:33:16 That's too low. That's too low. So, okay. Anyways. Where can people catch that live stream, David? Right here. Right back here. So we will see you guys in five and a half hours.

Starting point is 01:33:23 We're going to talk to Kobe and Ledger. We're going to get Kobe's perspective as to why he thinks this was averse, worst exchange. drugpole in his time being here. Maybe we'll throw in and try and get some other people here. We offered the invitation to CZ. He didn't respond, but if CZ wants to show up, that is an open invitation, bankless after dark. I am going to be drinking a drink. I will have a drink with me. I don't know about you, Ryan, but I'll be drinking some whiskey. I could say I will no longer be drinking coffee at that time. We'd be drinking something. Even that is too late for me. We'll see. We'll see what I show up with. Maybe a VB special, something like this.

Starting point is 01:33:56 A VB special. Well, bankless. after dark. We haven't done that before. You know what? We appreciate you. You sticking with us in bank lists. Like, we're not leaving. We're going to be here in the bear market with you. This is the time we do the best. We build the best things. I'm going to leave risk and disclaimers. And then I think, guys, stick around.

Starting point is 01:34:15 Like and subscribe. Like and subscribe. Then we have a moment of Zen. After these risks and disclaimers. None of this has been financial advice. It never freaking is on bankless. Never ever. Never has been.

Starting point is 01:34:25 Never will be. Eath is risky. Bitcoin is risky. You could lose what you put in, but we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. David, let me tee up this moment of Zen and hope it works. Did you share a screen with sound?

Starting point is 01:34:41 There we go. Like I was saying, it's FTX. It's a safe and easy way to get into crypto. I don't think so. And I'm never wrong about this stuff. Never. If you don't laugh, you'll cry. Take care, guys.

Starting point is 01:34:57 We'll see you in the stream tonight. Goodbye, everyone.

Bankless - The Collapse of FTX | 24 hours later

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