SBF & FTX – The Fraud Of The Century?

FTX, one of the world’s largest cryptocurrency exchanges, which was recently valued at $30 billion, declared bankruptcy this week. There were reportedly over a million users of FTX, and they risk losing all of the funds they had stored or invested on the exchange. Sam Bankman-Fried (“SBF”), the 30-year-old CEO of FTX, was arguably the establishment leftwing media’s biggest crypto darling. However, many are now wondering how SBF’s scam went undetected for so long and what the implications will be for the whole crypto industry. To answer these questions, let’s start by taking a look at the man himself.

SBF’s Origins

The origin story of SBF, which is obscure and nonsensical, is the first red flag that should have been spotted if we had an honest and competent media in this country. Before launching FTX, SBF reportedly made billions of dollars through Bitcoin arbitrage trading. Bitcoin traded at a premium in markets such as Japan and Korea several years ago. SBF asserts that he was able to purchase millions of dollars worth of Bitcoin in one market and resell it in East Asian markets for a premium. Nonetheless, no one, including him, has ever tried to explain how he gained access to the extremely restricted Japanese markets and where he obtained the capital to make such massive trades, which netted him approximately $10 billion in three years.

Building on this meteoric success, SBF establishes the FTX exchange in 2019 and, within three years, somehow develops FTX into the second-largest cryptocurrency exchange in the world. SBF was able to overtake his competitors despite the fact that they had several more years of expertise and substantially more engineers and employees than FTX did. SBF also acknowledged that he could not code, which raises the question of who turned FTX into such a formidable organization.

Crypto’s Golden Boy

SBF did have one secret weapon his competitors lacked. He (and his family) were very adept at building connections with some of the most powerful people in the country. SBF established contacts with virtually every Democratic power broker imaginable and often participated in events alongside power players such as Bill Clinton, Tony Blair and the like.

In addition, during the midterm elections of 2022, SBF spent $40 million on campaign contributions (second only to George Soros) to support Democratic candidates. This made him a darling of the left-wing news media establishment. SBF’s massive campaign donations also provided him access to the White House. He frequently met with members of the Biden White House to lobby for regulations that would 1) destroy his competitors; 2) undermine the virtuous aspects Bitcoin brought to the industry; and 3) enable FTX to become the dominant company in the crypto space.

SBF also developed links with the globalist power players, such as the World Economic Forum, which appointed FTX a corporate partner and commended its excellent ESG and leadership scores. If you had any remaining doubts about how much of a scam ESG is, here is example number 1,000. The WEF, of course, is one of the biggest cheerleaders of the ESG movement (and “the Great Reset”) and it famously predicted that by the year 2030, “you’ll own nothing and you’ll be happy.”

Nevertheless, all of SBF’s attempts to entrench his image and business turned out to be in vain as the scope of his nefarious activities is now being exposed.

SBF’s Dark Secret

Unbeknownst to everyone outside of Sam-Bankman-Fraud’s inner circle was the interconnectedness between FTX and Sam’s Alameda Research hedge fund. SBF appointed his girlfriend, Caroline Ellison, as the CEO of Alameda Research and the two of them ran it together when they weren’t conducting apparent orgies in their $40 million Bahamian mansion. You’re welcome for that mental image.

Several problems existed with this arrangement. For starters, Alameda Research had full access to FTX’s order flow, allowing the hedge fund to front-run FTX customers’ trades. In addition, due to the intimate relationship between the FTX and Alameda Research, the latter was able to participate in pump-and-dump schemes. When a major exchange like FTX lists a token, its value typically increases dramatically because it is considered a sign of success and respectability. Alameda possessed inside information regarding when tokens would be listed on FTX, and it allegedly used this information to purchase tokens before the listing announcement and sell them at a greater price after the news broke.

Yet, even with these enormous advantages, Alameda Research still lost a substantial amount of money during the most recent crypto crash. This ultimately led to the demise of FTX, as SBF attempted to save his failing hedge fund by utilizing client funds stored on his FTX exchange to cover Alameda’s losses. In essence, SBF stole customers’ money while spending tens of millions of dollars to support Democratic politicians, acquire stadium naming rights, and purchase Super Bowl ads.

FTX’s Unravelling

Still, SBF’s scam was going well until a crypto media company, Coindesk, obtained and published Alameda’s balance sheet. Alameda’s seemingly precarious financial situation spooked many people. One of them was Sam’s primary competitor, “CZ,” who runs the world’s largest cryptocurrency exchange, Binance. Upon seeing the Coindesk article, CZ announced via Twitter that he would be selling all of the FTX- issued crypto tokens that he had (“FTT Tokens”), prompting many others to withdraw their funds from FTX.

Within hours, FTX was forced to come clean and acknowledge that they did not have the funds to fulfill their customers’ withdrawal requests. The lauded crypto exchange with over one million users and a valuation of over $30 billion has now filed for bankruptcy. Consequently, any of FTX’s customers who had their money on the exchange are going to be fleeced and they are now furious.

But it’s not all bad news. At least not for the leaders of the World Economic Forum. They can take solace in the fact that their famous prediction turned out to be partly correct.

You will own nothing, but you may not be too happy about it.

So what is the moral of the story? SBF needs to go to jail, we all need to stop complying with anything the globalists say, and assume that everything in crypto other than Bitcoin is probably a scam.

Ashton Cohen is an attorney, investor, writer, and host of Ashton Cohen: The ELECTile Dysfunction Podcast.