The Chaser Report - Crypt-Oh-No!

Episode Date: November 16, 2022

Dom and Charles unpack the latest disaster in the world of cryptocurrency. ChaserCoin to the moon! 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 is Dom Knight. Hello, Charles. You look a little bit glum. Well, I've been going through the accounts, Dom. Oh, yeah. Well, as you know, things are not rosy. No, but we had Fred Shabester in earlier this week, the Crypto King of Australia,

giving us business advice. I'm assuming everything's rosy. Did you buy some Bitcoin for us? That's right. Well, I think, actually, if I'd bought Bitcoin on Friday, I'd be in the black. That's now considered a safe asset compared to, well, compared to anything Chaser-related. No, no, look, it's all fine. It's all completely fine. It's just, there's a little bit of a hole.

It's like only $640 million in the Chaser budget this year. Right. But I'm sure it'll all turn up eventually. And look, it wasn't, it's not really a hole. more of a sort of loan. Alone? Well, it's not so much alone. So just to contextualize, a few months ago, I saw this amazing firm called FTX.

FTX. It sounds cool. Yeah, it's fantastic. They do cryptocurrency, well, they did cryptocurrency trading. And aren't they based in the Bahamas? We're all solid financial ventures. They're headquartered. Exactly.

Run by a very sage, wise old, 28-year-old, and his girlfriend, who runs the research charm. And the other eight people who also run it, who are also employees, are also in a romantic relationship. I didn't even like a thruple but with eight. Yeah. An octah. No, no, no, it's 10 people in total. Oh, yeah. Okay.

And they all live in the same house in the Bahamas and they all have sex with each other. Which I mean, it sounds like a lifestyle. I mean, I reckon, you know, people claim that friends was a bit boring in parts. I'd like to see that as a sitcom. I think you probably will. Start they're looking for work? Yeah, yeah. Anyway, the point is, I found out that FTCS was sponsoring the Cricket World Cup.

Oh, thank goodness. So I looked into FDX because, in fact, their firm actually is very similar to the Chaser. Oh, right. Because we all live in the same house and have sex. No, no, no, which is they don't seem to do anything of any great social purpose. In fact, they don't seem to do anything at all. Yeah. But instead of, like, the Chaser losing a whole lot of money.

Yes. At that point, like, they had raised over a billion dollars from all these successful Silicon Valley startups and companies, including hundreds of millions of dollars from these well-established Silicon Valley firms like Sequoia, you know, really top-tier. The venture capital. Yeah, venture capital thing. And they had holdings of, I think their stock market value,

their valuation was like $32 billion. So they were, and I just saw it. Let's do the same thing that they're doing. Let's follow their business model. What a great idea. So that's what I did with the Chaser, which is, so, the thing is, when you hold a whole lot of people's funds. So if I buy crypto from an FTX, Charles.

No, well, if you buy any crypto from anywhere. Any crypto from anywhere. One option, as I understand it, is that I can actually hold the funds myself. That's one thing I can do. In fact, that is seen by many people as the key benefit of Bitcoin and cryptocurrency is that you don't have to rely on a, a third party to actually hold your funds. You can literally have it in a wallet.

It's encrypted. As long as you remember the password, you can then unlock it and spend it. And you don't need anyone else to hold it. But there is another model, isn't there, Chas? Yes. But the thing is, that's really inconvenient because who wants to hang on to hundreds of passwords for all these? And they're really long, you know, they're 64-bick passwords. They're 64 characters long.

So you've got to hold the coins in one wallet and the passwords in another wallet. It's very complicated. You know, if you hard drive fails, you lose it all, blah, blah, blah. So these firms sort of pretending to almost be like banks started setting up where they'd say, okay, well, send your Bitcoin our way. We'll look after it. We'll hold it for you. In a vault.

You can trust us, yes. In a vault. A very secure server. In the Bahamas. And then a couple of years ago, with all these billions of. dollars lying around in these vaults, these firms started going, well, it seems a bit of a waste to just let these bitcoins just sit here. Why would we just let our customers' funds sit in the wallet like we said we were going

to? Yes. We could make more things happen with this. Yes. And so what FTX did, which I thought was very clever, is that they invented their own cryptocurrency. So the first thing they did was they invented their own cryptocurrency called FTT. Oh, brilliant.

Right. And they mentored, I think it was sort of like, let's say... A gazillion? A gazillion of them. I think it was like $13 billion worth of this currency, right? And then they gave a whole lot of it to their research arm, which was called Alameda. Oh, is that the bit that was run by the girlfriend of the founder? Yep.

Oh, perfect. Right. And they gave that and they said, you can go away and invest that and do fun things with it, right? You know, research. Research stuff. Where to spend this money, right? Where can you buy a bed big enough for 10 people? So, because the whole thing is, you can't just spend people's money, right?

No, that would be shoddy and irresponsible. Yeah, if you're FDX, you can't just go out and go, oh, well, we're going to use this. You've got to back it, like, if you do that, you've then got to have something else on your balance sheet that balances up. Oh, of course. So what they did is they gave all the depositors funds to Alameda, Yes. Who then gave them back the FTT tokens, which were valued at $10 billion. Oh, so fantastic.

So they got $10 billion of their deposit as Bitcoin. Of real coin. In return for this little thing that they just made up and arbitrarily said it was worth $10 billion. That's a brilliant idea, Charles. So a few months ago, I started to do this with The Chaser, obviously. and I sent $600 million worth of real money across to a research arm, which my wife runs. In return, we wintered this new coin called Chaser coin, just one coin.

But it is actually, it's just, it's worth $600 million. Charles, I think people would find this story more possible. He'd said the Chaser had $600 spare and we came it to our research arm. Okay, no, what a brilliant idea. That's fantastic. So, and who owns this coin now? There's only one. Where is it?

Can I have it? So this is the thing, right? There was a run. Well, getting back to the FDX story, at some point in the last week, FDX also then went around and bought up a whole lot of Democrats, right, in the midterm elections. Yes, they've funded a lot of candidates. So they spent $40 million knocking out all the sort of left-wing candidates in the Democrats.

So the AOC, you know. Oh, you're far left. Your far left candidates who wanted regulation over this face. Oh, what a bore, regulation of crypto. And in the primaries, they installed a whole lot of their own anti-regulation crypto-libertarians in the Democratic Party, right? And we did the same thing without taste a coin. Yeah, yeah, yeah.

That's why Matthew Guy is our man in Victoria. So they did that, but the legislation that was being proposed by these new Democrats, who now are going to be able to sort of get legislation up is so squarely not in the favour of anyone other than FTX that it was going to basically drive all the other firms out of American regulatory system, including the really big players. Like there's this other crypto firm called Binance, which is the biggest one in the world. There's another one called Crypto.com, which you might have seen. Yeah, which I sponsor stadiums and stuff.

Matt Damon didn't add for them. All of those were essentially going to be made elite. because FTX had bought the legislators. But Charles, are you telling me that in American politics, rich people can simply buy up political candidates to just pass whatever laws they want? I know. In a democracy? That's never happened before.

Anyway, so then the head of Binance came out and said, well, we actually think that FDX is fucked. We're going to sell all our FTT holdings, right? And that caused a run on the FTT token. And then everyone realized that nobody was buying FTT, the token. And it went from being worth, what did we say, $13 billion, to literally $0 overnight. Well, this is the problem with crypto, isn't it? Yes.

The value of a crypto coin is simply what everyone agrees that it's worth. Yes. And so it's entirely possible for in one second, everyone to go, whoa, actually, that's a dog shit. It's worth nothing now. The Binance guy clearly realized that he'd sort of overstepped the mark and that he was going to actually create a run on all of crypto. Yes. So he then swept in and went, it's all right, it's all right.

We will buy FTX. Obviously, non-binding. We'll just sign an agreement, non-binding agreement. Yeah, we'll just check the books. We'll just check the books. 24 hours later, he goes, nah, fuck that. We can't possibly save it. And that's the story of FTX.

So it's now gone from a $32 billion valuation to $0. It's filed for Chapter 11 yesterday, which means it's bankrupt. And wasn't the founder, didn't the founder lose more money in a shorter time than any other business in the history of literally the world, except for the chaser? Six months ago, he was worth $24 billion. Wow. And he's now worth $0. Literally $0. And he's been, he's allegedly been detained in the Bahamas in some jail in the Bahamas.

Wow. Are you seriously telling me what he did? It was so egregious that it violated Bahamas economic law? Like the one place where you do your business so it can't possibly get you arrested? Well, the thing is that some doubt was cast on that because last night, uh, he, the head of, uh, FDX was seen online playing a whole lot of first person shooter games. Yeah, from his lovely jail. Yeah, very lovely. With an internet connection.

Yeah, yeah. And he's been tweeting, he's been tweeting weird messages like, what? Charles, I'm quite troubled. This story has made me feel for the first time as though crypto is basically a mirage contract, you know, built on a pyramid of an absolute bullshit. And you may as well just burn your money rather than give it, because at least you'll know where it went. No, Dom, I don't think we should be saying that because I've got this. case a coin to sell, and I really think it's worth $600 million still.

But the blockchain is the future, Charles. Web 3.0. Yeah. Well, actually, maybe we should, maybe this is, we should buy the dip. Maybe we should step in and buy FTCS. I mean, it was a satirical cryptocurrency. Can you actually send an offer? Yes. As long as we don't have to buy the liabilities, because they sound quite major.

While we were talking, I looked up the situation of Sam Bankman-Frey. read. Oh, yes, yes. And I'm really, the head of FTCX, which we were just talking about, the CEO who went from 28 billion to zero. Yes.

I'm really sorry to say that Carolyn Ellison, the CEO of Alameda Research, apparently that they're not together anymore. It's very sad. It says here, this is a news.com today. You only wanted me for my $24 billion? They were part of a,

inverted commas, cabal of roommates based in an inverted commas, luxury penthouse in the Bahamas. And look, it's just really sad. It does say that, yes, they did all fuck each other basically,

but they did occasionally date Ellison and Bankman Freed, and it sounds as though it's now really, really over. But on the bright side, look, I've hired an amazing new researcher for the chaser. I think she's going to do some incredible stuff.

It says here she's had a lot of experience in the cryptosphere. So that doesn't ring any kind of alarm bells. So yes, welcome aboard. Unfortunately, we all have to date her and each other at the same time because that's what they do in the crypto world now. So bad news for all, really. But on the bright side, we're now worth $28 billion on paper.

You should see my blockchain. I'll stop Web 3.0. I want to get off. Actually, not like that. Not like that. Stop the podcast. Our gear is from Road. We're part of the ACAS credit network. This podcast is not financial advice. Do not do what Charles says.

He's not. But do buy Chase the coin. It's a wonderful coin and you'll make billions.