The Chaser Report - A Small Crypto Loan of A Billion Dollars

Episode Date: November 22, 2022

Charles dives even deeper into the FTX crypto scandal and finds all the ways the company was corrupt. Meanwhile Dom connects the dots and finds all the similarities FTX has with how The Chaser's business is managed. Hosted on Acast. See acast.com/privacy for more information.

The Chaser Report is recorded on Gadigal Land. Striving for mediocrity in a world of excellence, this is The Chaser Report. Hello and welcome to The Chaser Report. I'm Charles Firth. And with me, yet again, is Dom Knight. Hey, what a lack of variety in our guest line-up theories this week. Is anyone else going to pop up at any point this week? Maybe Hanson. Hansen, Hansen. I'm going on tour.

If you want to catch the war on 2022, you can. Just go to chaser.com.com. You slash live. We're coming to 11 cities around Australia, starting on Wednesday this week. So, you know, especially if you're in the Gold Coast. Everywhere else was sold pretty well. Gold Coast, fucking...

Only about half the tickets sold. I mean, they're very discerning in the Gold Coast. We're sold out in Melbourne. We're sold out. We almost sold out in pretty much every city, except for the fucking Gold Coast. Do they know that you're bringing Gabby Bolt? Because I think that's the difference, isn't it?

Well, people in the Gold Coast don't like Gabby Bolt. No, I just think the reason why you're selling out. You might have communicated to people on the Gold Coast that you've actually got someone fresh and exciting. I mean, as good as Mark Humphreys is, and he is good. We've seen his schick before. Tall, bit awkward. It looks like a ridiculous version of a powerful figure.

It has been. It's a good pitch. Yes. And I reckon it's, the point where Barnaby Joyce was no longer Deputy P. And what did he even have to say anymore, Mark Humphreys, with no more Brabius loins? No, exactly. So we brought in Gabby Bolt. She's brilliant.

I think the problem with the Gold Coast is it's on the night that schoolies starts. Oh. Is that why you booked it? Are you a Toole? I'm a Toolee. I'm going to be a Toolee. No, no, this is the problem. We, look, if anyone is from the Gold Coast and listening to this, we are desperate.

We can't get hotels. All hotels are like 800 bucks a night. Like, I'm not going to fucking do that. I don't know what we're going to do. It's just a complete disaster. I mean, my general rule in life is don't go to the Gold Coast. I've only ever been there once. Yes.

And it was a very messy night. Yes. And the best thing about it was I didn't have to watch you and Mark Humphrey's perform. So it was a terrible night, but at least it was free of your show. Although, if Gabby Bolt's there. I mean, I would just call the show Gabby Bolt and then in very small letters plus the war on 2020. Plus the war on 2020. Well, actually, I'll tell you what, though, because she's written all these new songs for it.

And they are so fucking hilarious. And she sends, like, I keep on saving them because I know that she's going to one day be incredibly famous. And I've got all these voicemail recordings of her going, oh, I've got this idea for a song, you know, and singing it out through the voicemail. And you're going, that's, like, that's like a Beatles tape or something like that. In 30 years time, I'll be able to turn it into an NFT and cash in. Isn't it amazing to get to work with such young, talented people and just realize, that we were never anywhere near as good as they are now and that it's just it's all downhill from us.

It's just really reminds you that you were lucky to get as far as you did, which wasn't nearly as far as they are now. It's just good that white men had their times to shine and we were part of it. Yeah, in a time when you didn't actually need to shine to do it. Yeah, it's just sort of be there. Times are still mediocre. There were no alternatives, so you got jobs.

Yeah, it was good. It's good. I enjoy that. Well, it's very good. No, the Gabby box, so it's coming to a theatre near you plus some other old guys. Talking of mediocrity, I thought we should do another deep dive into the FTX scandal. Oh, yes. People who don't listen religiously to this podcast, FTCS was one of the largest cryptocurrency exchanges in the world, right? And I know when I say to you, Dom, cryptocurrency, you just think, oh,

reliable, you know, I think integrity, I think the future. I think here are all my savings, Mr. Bitcoin. On Friday, FDX filed its bankruptcy court filing. Like, you've got to actually explain exactly what's happened to the court shortly after you filed for bankruptcy. And I'll just give you a list of some of the things that have come up in this filing. So the first one is, so the first, the top line.

thing is the guy who's taken over, who's the guy who actually took over after Enron collapsed, right? Oh yeah. He's got a good job. He takes over these sort of steering firms. He reckons that the FDX is far worse than Enron. Yes.

Well, yes, because didn't the people who created Enron at least get some of their money out whereas these poor idiots have a zero dollars now? Oh no, no, no, no, no, no, no, no. Yes. But no, but yes. And this actually, I think we should apply this to the chaser, Dom.

If you were an employee and you'd incurred some expense, you know, that you'd spend some money somewhere. The way you would get your reimbursement from the company is you would hop into the Slack or DM one of your managers. Yeah. And a random manager would then pop in and accept or reject those reimbursements with an emoji. Is that how it works at the chaser? I would have to, you know, file your property.

a receipt to accounts and there'd be a sort of an audit trail. I didn't know that emojis were part of, you know, financial good practice. Emojis are just as good as, you know, expense reports, aren't they? Is it up, is it a thumbs up or thumbs down or do they occasionally send things like, you know, eggplant? Or what if your emoji, does that mean yes or no? Because in some of cultures, you know, pointing your thumb down means yes, doesn't it? Does it?

Yes, I think so. I think, you know, there's a very racist movie based on that exact problem. That would have been very awkward at the Roman Coliseum, wouldn't it? When the emperor gave a thumbs down and the gladiators were going, yes, and then got killed. Yeah, well, I think actually that is true. I think in Rome, in ancient Rome, thumbs down meant thumbs up and thumbs up meant thumbs down. Yeah. And it was actually, I think it was thumbs sideways was like thumbs down or something.

No wonder, the empire fell. Yeah, well, no, but that's why in Gladiator, it was. It's actually historically inaccurate. I mean, it's also not true. But, yeah, no, I'm pretty sure thumbs down meant thumbs up to us, you know, sort of thing. So anyway, point is that you're right, the thumbs up emoji, like, probably what was happening is people were going, oh, good, my expense report has been accepted. I just fact-checked that because you're Charles, and yes, according to a professor at the University of Virginia, thumbs up meant kill the gladiator.

Yes, that's right, yeah. So actually maybe that wasn't a misinterpretation. And if you gave a thumbs up but you put the thumb flat on your hand, that means live. So some lying down meant lives and the thumb being upright meant die. That makes sense at all. Anyway. That's it. That's the way it. Well, no, there's cultural differences, Dom.

Sure. Get with the program. Not everything has to be a white man's view of the world. Yeah, it could be a different white man from Rome's view of the world. So the next thing is There was a little bit of a personal loan situation going on Oh yeah Alameda research which is of course

The sort of trading arm of FTX It was the sort of a hedge fund Gave the CEO This is Sam Bankman-Fried Gave him a little personal loan of One billion dollars Oh Yeah

And then the director of engineering Got a 543 million dollar Personal loan Imagine getting a personal loan for a billion million dollars. Imagine going along to St. George Bank or something and going, I'd like to take out an unsecured personal loan. Just a bill.

How much do you want? A billion? Do you have a billion? Yeah, sure. If a billion is too much, 543 million. It's very specific. I won't take 542, but 543, I think I can make that work. What do you need?

A billion. Like, I want to renovate the kitchen. I want to get a new car and... I want to buy Twitter in a week. I just looked at FtX.com, by the way. It didn't work. So I don't know where that money went, but weren't they all flatmates too, though, right? So we've done this on the thing.

Yeah, I know, we talked about it. But just to remind everyone of that, that means you're asking your flatmate for a billion dollar loan. Yes. Down through the company. Presumably they're all high when those loans got applied for. And, hey, let me a billion dollars, bro. Okay, bro. That is.

That's what happened. Because they actually had a virtue of being on drugs. drugs the whole time. Iowa. That was, that was Sam Bankman-Fried's whole philosophy was,

you know, you have uppers to go up and downers to go down. Gosh, his company's taking some pretty powerful downers.

Those things really work. The Chaser Report, now with extra whispers. They didn't actually make any records of any of this. Oh. The other problem was, so very few records were kept.

Most decisions were made over chat, and then the messages were automated. automatically deleted after a certain amount of time. Hey, have we put that on the chase of Slack? Can you switch that on now? We've now got the free version of Slack.

I think we were on a paid plan. Oh, we were. Yeah, yeah. We can't afford the paid Slack, yeah. Yeah, and so I think it does. It deletes. I think you only get, like, the last 6,000 messages, which coming out of the interns is about, you know,

three minutes worth of Slack messages. Yes, okay. FTCX, a company valued at $32 billion, never had board meeting. Well, but they had piss up. back at the apartment, that was a board meeting, wasn't it? Oh, does an orgy count? Like, if you get quorum in an orgy, is that counted as a board meeting?

I think it does. I think... I reckon an orgy would be the opposite of being bored at a meeting. Oh, God. It wouldn't be a board meeting. It'd be an interesting meeting, eh? Thank God the Chase had never worked on that place, so that's all I've got to say. I mean, this could literally describe the Jason, except for the quantity of numbers.

FDX had no cash management system. That does sound familiar. Management had no idea how much cash was on hand at any given time or even where their cash was. Can you imagine having the problem of there's being so much money sloshing around, so many billions of dollars, you lose track of it. And someone lend someone a billion dollars. And there's no record. It's just, oh, whatever, billion here, billion there doesn't really matter.

We've got so much coming in. Thumbs up emoji. Oops. Sorry, killed that guy. But no, no, but the thing is, so can I tell you an anecdote about the early days of the Chaser when it was still at my house? really early on. We got broken into because back then, you know, lots of junkies sort of housebreaking all the time.

Yeah. And they went through... They went through all the Chaser's sort of stuff. Didn't steal any of our old shitty computers we laid it up on. Went through our petty cash box, right? And they left the petty cash in there because it was about 40 cents. They left even the cash. Like even the robbers, even...

The only thing they took was, we bought this really nice pan of hot chocolate powder and they stole that. What an insult to our business that someone cased it and the only thing worth

worth anything was a hot chocolate powder. I must say if we got someone like an external auditor to do that it would have been much... They should just have to note saying just to be clear your company is worth nothing you should shut it down right now. Imagine that how many years

that would have saved us of dodgy Asic decoration. But at least we had a petty cash box. That is a cash management system. Yeah. FDX didn't even have that. Okay, anyway,

so FDX didn't keep any records of who they employed. Employees and contractors co-mingled throughout the different companies without any proper documentation on how they spent their time. Certain employees can't even be located, which could mean that some employees

were actually fake. Right, or they're the ones who've got the 32. billion dollars it's quite yeah right okay next one corporate funds were used to purchase personal real estate and employees and executives

put their names on homes purchased with company funds yeah so they bought a whole lot of sort of houses in the Bahamas as you do using company funds but put them in their name I mean but surely the point where you set up your business in the Bahamas you assume this is all going to be okay you can't tell me that

oh goodness it went against the well-known you know, strict Bahamian corporate law. I think you're being a bit racist there, Don. No, I'm just saying, if you said that. I think you're assuming that just because the Bahamas is a nation of 9,000 people, smaller than, say, Wagga or Orange or Bathurst, but it doesn't have strict financial laws. It's the bathest of tax haven't.

No, but isn't the whole point of the Bahamas that they've deliberately set it up with no rules? It's like Thunderdome. Oh, really? Yeah, that's how they bring all the companies there. How is the Chaser not headquartered in the Bahamas? What have we... I did actually. I once tried to do that.

Back in the days of the double Dutch Irish sandwich, I did a whole article for the Chaser quarterly on how to avoid tax, just like your prime minister does, because it was back when Malcolm Turnbull was... Oh, Matt & Turbul. Yeah, that would have been very tough. And it is surprisingly easy. It would only cost a few thousand dollars to set up a hollow shell of a company in the Bahamas.

Instead of setting up a hollow shell here. But surely we should have set up an entity to run the website that has no connection to Australia whatsoever. So I can publish whatever it wants without having to apologise to, you know, certain MPs. I think that is a complete misreading of defamation law, Dom. Is it? Yes. I think if you publish something, you've published something. Like, and if you publish something and somebody in Australia can read it, you've published something.

But, okay, but trust me on this one. So what if we all resign from it? and then mysteriously the following day a Bahamas based Chase website pops up and starts publishing things they would have no idea who to serve they would have no idea who to sue

it would just literally be the chase of Bahamas trust we could probably buy FTX.com it's down we could buy FTX.com and use that to publish articles about Australian politicians wouldn't you just serve us and assume that you know you just say to the judge judge clearly they've done it and the judge would go yeah you're right and that would be the end of that that would take about half an hour okay well let's see if there's any consequences for ft x as directors

having absolutely no audit trial because it i mean it sounds hilariously chaotic but it may also be brilliant because there's going to be no way that anyone can prove they even worked for the company you're right maybe ftx never existed yes or maybe it did exist in such a brilliant way this was all part of the plan. Yes. They might not have screwed it up. That's my culmination of the geniuses. Yeah.

As Sam Bankman, Fred keeps on claiming that he's a genius. I just think the chase needs to be a lot more like FTX. Okay. And then, finally, I'll just give you the last run, which is that the crypto deposited by customers. So the whole business model was, deposit your crypto with us. It's safe with us.

We won't invest it anywhere else. It's just, we're just holding onto it for you. It's just, that's what we're doing. Safe as houses. You explicitly give us permission to then, um, to lend it on to something else. Yeah, so safe as houses, specifically the houses we will buy in our names, using your money. But the crypto deposit by customers weren't even recorded on the balance sheet. Presumably all crypto assets just went into one central slush fund and used for whatever they wanted.

Wow. It was a lie, Dom. I mean, can you believe it? Crypto, you know, it's always seemed like a scam, like a fraud, like it was really dodgy. You always seem that way. Yes. But to hear that it actually is as simple as you buy your crypto through us and we own it now. Yeah.

That's amazing. I mean, you've got to have, you got a dog your hat to them, don't you? If you still own a hat, I've sold it. But also, like, whenever I come up with a scheme like that, you all poo poo me, you'll go, oh, no, you can't do that. No one's going to buy that. These are the greatest satirists of our age. They have created a satire of a corporation. Of a corporation.

A living, breathing and will now dead. But while it was there, what a magnificent example of the utter folly of capitalism. It's absolutely genius. Anyway, this episode's been sponsored by FtX.com. If you want to get your crypto... It's down. FtX.com is down. Just send us your money and we promise we'll invest it in crypto.

I just can't believe they invested in the T20 World Cup. The T20 World Cup only like that. lasted three weeks. They didn't even make it to the... The company did not even last the three weeks. The FDX tournament last... Well, I suppose there was a natural synergy in the T20 games

to last for a very, very short time. Yeah, yeah, yeah. It was the T20 of Banks. Yeah. I just wish we'd thought of it first. Our gear is from road. We're a part of the A-Cast Creator Network. That's you tomorrow.