#116 - The Truth About The FTX Scandal - Transcripts

November 21, 2022

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What a disaster. The fall of the one of the largest crypto exchanges in the world has stunned the industry. Today, we break down what exactly caused the collapse of FTX, and reveal some shady behind the scenes dealings and connections that might leave you in awe. There is much more to this story than meets the eye, and the effects are widespread.

Transcript

this is the truth about the

F. T. X.

scandal

we're about to reveal some crazy facts about the ethics scandal that you need to know about

welcome to the bean pod this is your place for all things stocks and crypto from beginner tips to expert picks use this as fuel for your investing journey because when you're in the know your money will grow this episode the beam parties sponsored by club or swap hi Chris what is it dax index aggregator which is built to facilitate all your defined needs in one single platform fast cheap and safe user experience is copper swaps sole focus to make everyone's life better Indy five welcome to the bean pod this is Shane A. K. the jolly green investor

this is Josh the nifty investor

today we're gonna be revealing the truth about the F. T. X. scandal

there are some crazy developments happening as of late we got you crane we got the Bahamas we got sex tapes

there's a lot going on you see Gary Gensler

there's a lot going on here

yeah

so we're gonna at UNC

unpack

what's been happening over the past week but also give you some lessons to be learned so that you don't end up like the people who were on after tax

yeah

I'm losing millions of dollars

is with every mistake you know doesn't matter if you had exposure to F. D. X. personally or if your portfolio got hit from it the most important thing you can't change the past right so it's all about learning from mistakes to happen in the world by yourself or by others and making sure that you go for it with a better mind frame so we're gonna we're gonna talk about what happened and also point out at certain points where red place could've been raised and how we can all be better investors moving for and also talk about some crazy conspiracy connections that we've definitely uncovered about this insane story

yeah it's not so basically you know what's the name Sam bacon fried the founder of FTX controlled some funds that Almeida they use a Ponzi token the FTT token as collateral to borrow billions in real money

that

could be paid back to investors and this end up what ends up happening is there is an article released on point ask about their balance sheet how the assets and liabilities that match up and then CZ this that see the founder of binance stepped in and he's got a really big echo chamber on Twitter this led to a bank run and what end up happening is everybody try to pull their assets off of after tax I didn't really exist then of going bankrupt and allow people lost a lot of money

yeah I mean what what's that bank the the balance sheet thing came out about F. T. acts it was he took a look at that it was just like this is ridiculous you know I I line share of their funds were held in their own token which you know really help no value because the FG token really didn't have any utility in ecosystems just like up on the token right out and then another thing I saw was they had like two hundred and fifty million dollars in this serum token serum was the leading tax for Selanne and the market cap of zero was like eighty million

while

so they're they're showing two hundred fifty million dollars of serum token and the entire market cap of zero eighty million doesn't I does not up right up

so it's just fake money that existed

it was all fake

and then select your withdrawals are frozen then the website went down but if you try to access the website was tall

access

accessible you can still access the AOP what ended up happening was there was like some Trojan horses some hack that existed

yup

so if you went on to it you're more money which I came

taken from your account because then there was another hack that happened in train like the the remaining four hundred million dollars from the platform

that's right

so I mean when you look at what they were doing they were taking customer deposits customer funds to say I'd put five thousand dollars and F. T. extract that will go to Alameda research immediately not even after the axe and they would use that money to do their crazy investments and loans and go high leverage schemes on Alameda so after you've never even really got any of that money was just a massive scheme to get money to their alma mater research who then they would use to by other tokens and dump them on retail or do crazy leverage positions it was this

yeah there are a lot leveraging

yeah it was just a crazy scam

yeah sell sell that end up making billions but then they lost everything

yeah and not once that you know the dominoes started falling and now you know you see these connections so there's SPF and then there's this Caroline girl who was like is that the the person who ran L. Mehta the twenty eight year old girl you know yeah I'm sure you've seen some of the crazy quilt that she said where she's barely using yet using elementary school math like no risk tolerance don't set stop losses

she

I think her dad was Gerry gamblers boss

right

that the chairman of the SEC

yeah

so there's this massive chairman the FCC who is

supposedly out there too protective masters

right to Caroline's dad is that was the boss of Gerry Gansler and Caroline is right there it literally in bed with SPF so there's this connection here between them and I mean just the fact that you've seen all this go down and Sam is not locked up he's in the Bahamas grocery grocery shop is plain legal legends he's tweeting ridiculous cryptic tweets

there's

there's this goes deep there's a connection here yeah government like

so I the one thing one quick takeaway from that is it something you just mentioned there about her language and I believe is the all made a pitch deck that came out so this is one take away what will convert them into at the epicenter at the end or something like that we're just waiting to hear

yep but

the fact that there is spelling mistakes in the pitch deck

I

in addition to the fact I believe that that it said that there is no risk guaranteed returns of fifteen percent so

that

is a take away for me

yes hundred percent that's a red flag so next time

you're investigating a crypto project and your whether it's the website or the white papers like this just goes to show you that you need to spend a little bit more time actually researching and seeing where where does something seem too good to be true where them spelling mistakes whether errors because if they're making them there the poly making them elsewhere

absolutely and you know something we preach all the time in the show when doing your due diligence in crypto projects check the website out check the team out check the telegram out if you see things that don't looks that don't look right spelling mistakes making false claims about guaranteed investment returns of red flag get out right so you know people were just you know bamboozled by salmon Caroline but if you really looked at what they were doing and what was on their website to pitch deck you could see the signs were there but because they had they had a meteoric rise in the industry and all the venture capital firms are and you know Kevin o'leary literally everyone so it's like oh well you know what we're just going to ignore that but the lesson there is don't ignore red flags regardless of how many people are propping someone up right exactly

and then to your other point about being in bed with this act actually opened up a lot Doris like what is actually happening here you know we have inflation spiking all around the world we have interest rates you know being hyped we have a Connie's pretty much collapsing at the moment it seems as though the whole world right now is fighting for a new currency and it's like who is going to control it because so much up for stakes right now you know and we have to start what really caught my attention was the fact that SPF is still just like you said walking around every fight he ripped ten plus billion dollars off of people right there's a lot of money is it it's insane that the to the tornado cash guy one of the developers was in the Netherlands and got arrested for suspicion of not hitting it's not even it wasn't verified at the time but was suspicion of money laundering

and he just made the code

they just did the code this guy is literally on Twitter saying that he what he did and he's just walking around like everything **** find it bullshit

and then at the same time you were talking about this earlier is now the fed is rolling out this fat dollar picked this bad dollar project a day a day later at the same time

right and then these things are happening

it's almost like it was planned from the start although I I don't I don't think it was planned out

that

you know cesium finance we're gonna take them down

not

because I think CZ economy operates on his own I don't I'm not sure let me check who knows yeah but I don't think they would have planned for C. easy to do that bank run on F. T. action for them to take it down like that but there is a connection here between the government the S. E. C. F. T. acts SPF Alameda research and I don't know if this fed dollar coming rolling out at the same time is a coincidence but there's a lot of coincidences

so it is impeccable because of MasterCard Wells Fargo Citi group they just lunches twelve week experimental dark dollar twelve weeks goes to when the next review of the next spot there crying ETF is gonna come out there hasn't been approval first publicly but they lined up on the exact same day as when this comes to an end what's more is also moved the swift migration to the ISO twenty oh two two standard has also been moved back to March and what are supposed to happen this month right so that's not happening so there's a few like funny little things that are occurring and then you have the Wall Street journal The New York Times routers all coming out and painting SPF look like this this king like this beautiful man who just made made a mistake or something like that

yeah just a gigantic fluff piece today

and he was one of the largest crypto contributors who is trying to push for crypto regulation he had the largest about donations of forty million dollars to Democrats

and

and his parents who are these law professor at Stanford are also in bed with the SEC chairman

yeah

there's there's a

and then

so

continuing to go down the conspiracy theory rabbit hole this is obviously an unconfirmed thing but we've we've started to hear people talk on Twitter about this is the connection between government funds F. T. X. and the Ukraine war so as we know the United States been sending billions of billions and hundreds of billions to Ukraine and war eight right and a lot of people have been questioning this money and they're been accusations of money laundering coming out **** nilly but now what we're seeing is rumors

that

when people are now going through the F. T. X. books you're seeing proof that the U. S. and the government to Ukraine a US was sending money to Crichton and Ukraine was sending it back to that two American government through F. TX so the US is saying that they're providing aid to Ukraine but really they're washing dirty money and then it goes back through an anonymous crypto exchange blockchain you know you can't tell where it who's coming from block back to the American government wallets now if that story is confirmed true I can only imagine the massive fault that we'll have like that is that is a crime of historic proportions

it's not because you yeah you do so you see these reports is like White House aspirin are twenty seven died yesterday ask for another twenty seven billion dollars to sandy crying what the **** does a lot of money what you just send a hundred billion dollars that Weiss in R. twenty seven billion

it's crazy

you know it is actually not so another report that came was the Bahamas government ordered SPF to hack the after tax system and transfer assets to the Bahamas government

I saw that yeah that that's

what is that and this came from the court filing so this is documented so all the money that got stolen just got sent to the Bahamas government

it's ridiculous and if you know if you if you follow our show you're probably wondering why we did do the steps of sooner but it's because new news comes out every day that we are only the start of uncovering this massive onion of corruption and and scandal so you know we might even do a part two of this in a month and and visit back but there's just so much stuff coming out like the conspiracy theorists are probably having a field day and for good reason there's too many coincidences too many people that knew too many people all things happening around the same time to eventually put these regulations and fed dollar into place right around the time that the F. T. X. crash happens it's the boy was my skin I don't know

if it's if it's the thick with what's problem what the problem here is now is that everything's got lumped into one basket so crypto is now associate with the coin to coin associate with exchanges it's an it's a now associate with checkpoints and now that they have all these projects and and bitcoin and crypto and blockchain everything just to to one basket now big because of this

you know

so now it's gonna take forever for regulations again place and you know it's just a credit to your cost effective because of this one yeah and again it's really weird that the guy still not arrested

it's it doesn't make any sense I I it's gonna be very engine to see how this all plays out over the neck of the coming months

yeah you're right

so maybe we can move into some some major lessons that we learned and that people should take from this entire corruption scandal right so the first thing that I can think of it's the it's the easiest one never hold all your funds on one exchange and a centralized exchange specifically

right

you know we saw people lose hundreds of millions all their net worth because they had on F. T. X. two you know before this you would have thought if you're gonna have all your funds in one place binance F. T. acts Coinbase pretty good places they're not gonna go down right but that's a a just a massive take away so if you have crypto either spread it out through exchanges or don't hold a lot of it on centralized exchanges you know that's that's a huge takeaway

yeah I mean I'm let ledger has seen an all time high in sales now for the for the hard wallets you know whether using metamask or somebody that where you have custody of your own tokens in exchange is literally in is what it exchanges the word is an exchange is a place where it's not bank it's not something it's not called a store of value

yeah

it's a place for you exchange whether it's fiat for crypto or in altcoins or fiat I'm sorry or an altcoin for fiat or talking to talking that's all it's used for there's no reason to be storing your assets therefore it for good and if you are going to be making these changes exchanges you're better off using a decentralized exchange because it can't be shut down where halted withdrawals halted so if you're gonna make a fiat swap to an altcoin use at a decentralized exchange for sure and and yet

it's exactly what you just mentioned there brings me to my second point which is use cold storage get a hard wallet get a nano ledger acts or whatever it is whatever hard hard what what what you think is the best if you have significant amount of crypto and you don't plan on trading in or selling it anytime soon there is now no reason for you not to buy a hard wallet get your crypto off of hot walls into into your cold storage keeping your apartment it is safe there might that is if you've ever needed a reason this crash is the reason to get your crypto off changes

into cold storage hard walls such as this same process you know you just attach to computer swap it out and boom it's there

yeah

the problem is a lot of people can't complete look after themselves so they kind of all there was need some that really basic and simple and that's why I said like if you treat like a bank I I go in there and I put my credit card and over my debit card and I get my money out why am I just doing exactly that thing on a central exchange for sure for sure it's got title you don't think binance affects us like I'm walking into TD Ameritrade whatever like yeah so I think another thing that so I made some videos about you know what could possibly be what's happening in the space and sometimes I think peoples the time frames in their mindset is just way too tiny so I made an electric telecom is like be cautious because what they're doing right now it's kind of shady they we highlight highlighted this in the previous up so they're sending money accidentally from from their exchange to gate dot I owe why would you be doing that that is pretty shady something's up and withdrawals were halted for our cardinal users those are two red flags

and

yes it could be treated as five and yes it could end up being not true but why are you can take the risk

yeah

right so I do not hate comments I received on the on this video is just like Hey look don't take the rest sold my lesson learned it treat it as true and so otherwise proven guilty or sorry that the exchange could be guilty and yep right so don't take the risk

yes

if there's some sort of fight right now just walk into a deeper and treated as though it it's real

yeah for sure and that leads into another point I have which is don't trust

what

massive leaders and founders and CEOs say on social media because you saw SPF right before they collapse at assets are fine we've not been using customers assets to trade everything's fine two days later it's he literally lied through his teeth and we saw that happen with Luna and Kwan we saw that happen with three arrows capital into

sues you

and we saw that happen with Celsius and Alex was in ski all of them went to the same pattern saying everything's fine assets to secure users funds are fine withdrawals not be halted and forty eight hours later in almost every case the exact opposite of what they said so when you see the crypto dot com founder of publicly defending the exchange as you said maybe he's right maybe they're not going to be halted withdrawals maybe the exchange will go down but

you

can't trust anything those guys say because they're acting in self interest so if there is smoke there may not be fire but there may be fire so you have to take those red flags and

act

quickly get your funds out of those exchanges because there is no reason to risk your money

exactly then to that point diversify your risk you know like you said don't don't have all your money on one exchange they hold across multiple exchanges or you keep someone a hard wallet but keep them on a cold start like you never know what is gonna happen maybe you know don't go all in on the FTT token because clearly we can see what happened are even salon at which is now attached to Allah made and you know the venture capitalists there so you want to diversify your risk yeah and

don't be all in on any one project a hundred percent that was one of my next point as well as is make sure your your crypto portfolio is diversified enough that if one ecosystem goes down you know the Alameda salon ecosystem you no matter if you were such a big salon a person that you never listen to our doctorate about salon app celery said get rid of that and you held F. T. T. Selanne zero Aptos all these solar projects that all got obsolete decimated in a forty eight hour span because you didn't diversify your portfolio enough you know that is a sign that you should always never go all in on one token or one ecosystem or one research investment portfolio because you can see how fast contagion can happen and when the dominoes fall you don't want to be said hold left holding the bag so definitely make sure your your coins are diversified enough that you won't be completely ruined

end if you're diversified and you're not all in the you haven't lost anything keep some cash on hand

yeah

so another lesson learned is always have whether to stable coin or just fiat you can transfer it in you know then how to be a stable coin just have something on the sidelines for when these blacks one events occur because the people sitting cash right now are looking at potentially an opportunity

of

a lifetime

yeah

on a per cent

always have cash on hand because in this this is taught us more than we have ever thought you never know what's gonna happen you know there's been some insane stuff that's happened over the crypto industry over the past six months always have cash on hand to buy the dips which leads me to my next point there's no rush to catch a falling knife you know I think a lot of people soft what happened the code crash it was just this mass of the recovery so now when we see crashes subsequently you think oh no I have to go all in now because it's gonna bounce back well it's not you know we talked about this in another episode this is now crypto winter we're gonna see a long accumulation phase because retail in institutions have both been alienated so there's no rush to catch a falling knife slowly dollar cost average accumulate because these things don't after such a massive collapse and scandal it's not bouncing back anytime soon don't catch a falling knife and don't use leverage as well like you don't need to be leveraged up in these situations this is not the time to be using leverage

and to to the point is not catch your point what catching a falling knife is pay attention because and that's what we try to do for you guys is like put together the pieces to identify what's gonna be happening next out what ended up happening with Luna went under it took over a month before we really start to see the after effects in the aftermath of that before we saw the coin take another massive dive a month later because three AC one under Voyager Celsius so what's gonna happen now with the tactics follow it's going it could take I mean we're already seeing block five excel file for bankruptcy and genesis which holds tons of capital your seen Tom Brady these guys get sued yep it's only a few days in just like their storm report facts to be had here over the next month to month so don't worry about catching the I don't catch a falling knife and just wait

yeah

take some time because it is

an inexact Essex he one thing you just said there is important one highlighted as pay attention because I feel like a lot of people now they will see what's happened in the industry and they will run away and it will stop paying attention there said octopuses gambit coins going to zero the whole industry sham well it no it's not everything is cyclical and if you stop paying attention now when everything is cheap you're gonna miss the next opportunities you're gonna miss the next ball run because you stop paying attention at literally the worst possible time now is actually the time to pay attention the most because you get off if you pay attention and you do your research you're gonna find the really good projects that are gonna survive and it will do a tax a hundred acts from their generational bottoms which we will likely see over the next twelve months so as as hard as the market is right now and has bloody and terrible and skinnies everything looks now is not the time to tune out now is the time to tune in make sure you're following the bean pod jumping the discord were always talking about great projects this is the time to make generational wealth at the bottom the scariest part of a bear market right

and I think it also highlights why you and I are always looking for like hidden gem all points from the corporate side of things is because this is when products can rise up from the ashes this is when this is when the generational opportunities are are born and create it so I made a post on the discord today for it so if people want to jump in there and check it out I'm still looking at like high quality low cap altcoins and there's a few reasons for this and a high highlights everything that we just discussed so first of all the opportunities for a huge potential for growth is there you're not gonna get that with the Selanne salon is already sitting at thirty billion dollar market cap what how much revenues actually generate to be worth that right pretty much nothing their low caps are primarily only available on decentralized exchanges so you're avoiding the centralized exchange aspect you're not you're not the low cops aren't affected the same way that the algorithms affect the large caps when this news of SPF it's it's like boom all set there in tanks big coin tanks Kahlo caps rather chug along the chilling nothing's touching them and the last point is there the low capital have venture capital backing so when you have Alameda tied up with Selanne and something goes wrong then you know there's a cascading effect what's more as all these venture capitalists always trying to make a **** ton of money so they get in the seed round talking price goes up pumps dumps yeah everybody loses Y. as lo capital necessary how that so if you look at a lot lower calf talked about like Aventis it's up some percent still you know the past ninety days yeah more peace network up eight percent still somber network up like three hundred percent yep there's a few other ones at like RVF and Janice those are up to eighty percent so the low cap with quality are they projects at I still want to keep looking

yeah hundred percent I think it it's a great point that they're not affected by by the prize a big one you know you see price a bit going up and down all the top two hundred projects just follow it like blind blindly follow it but the low caps that we always find they move on their own because people don't have to panic sell them from cap from venture capital firms to cover these cascading effect of a of a crash so yeah if you're if you're looking for interesting opportunities and cool projects and names that are going to be necessarily affected by the cascading effect of this FTS crash jump in our discord make sure to follow because we're always looking for these quality quality low captain Jamaal clients

will continue covering them on so it's a mixture of like scribe recent comments about maybe what other podcast you like to see and then to enter the next

episode is that one's going to be a banger

all views expressed by speakers on the B. potter solely their opinions you should not treat any opinion expressed in the hottest specific inducements make a particular investment or follow a specific strategy only has an expression of their opinions this podcast is for informational purposes only

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