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They burned the cryptocurrency. Now they want a comeback


On Wednesday, Vox published a blockbuster interview with former FTX crypto exchange CEO Sam Bankman-Fried, where the 30-year-old crypto trader almost revealed that he was, in fact, mixing client funds with his hedge fund. myself, Alameda Research. That would be a problem in itself, as it already violates FTX regulations. terms of service as well as potentially falling within the range of wire or securities law.

Bankman-Fried’s Crime, which “doesn’t quite lend” [customer deposits] out” but something “messier”, “more organic” and “more sensible” than that, was combined after his exchange activity left a million FTX users without access to their funds. Billions of dollars worth of cryptocurrencies are missing – and the “cluttered accounting” at FTX and Alameda is still being sorted out.

This article is excerpted from The Node, CoinDesk’s daily compilation of the most important stories in blockchain and crypto news. You can register to get the full newsletter here.

He is now try to improve 8 billion dollars in financing to make the whole client. What that will look like is anyone’s guess, (Bankman-Fried did not respond to a request for comment). But the amount is much larger than the company, once valued at $32 billion and now bankrupt. Chapter 11 Bankruptcy, had grown up. SBF has also resigned as CEO.

The fact that Bankman-Fried thinks he can reverse his fortunes shows a profound disconnect from reality. He has repeatedly lied to the public, to customers and investors – his trust has been burned, and he is likely to face criminal charges. And while he thinks he was once “one of the greatest fundraisers in the world,” his success is built on charm attack and misdirection.

See more: How Sam Bankman-Fried’s ‘effective’ altruism blew FTX | Idea

FTX has considered a number of white-glove funds as investors, including Sequoia Capital, Lightspeed Ventures, and Coinbase’s corner fund. Apparently no one did any due diligence – Sequoia even committed after finding out SBF was playing League of Legends during the meeting. That level of lax oversight won’t happen again.

There are exceptions, of course, said Kevin O’Leary, a well-known investor and paid spokesman for FTX. bet back on SBF. And that’s the scary thing: while Bankman-Fried has the potential to end, he has colleagues who are trying to do the same thing – regain their reputation, maybe raise money, and start the “round” all over again. their hero bow” – and just maybe.

In particular, Terra creator Do Kwon and Three Arrows Capital co-founders Su Zhu and Kylie Davies recently ran the media circuit, billed as experts to comment on the ups and downs of Bankman-Fried. Zhu and Davies, who have made billions of dollars, are even said to be in the market to raise new crypto investment funds.

All three are on the run law, have been accused of not cooperating with authorities and have ended up in non-extradition countries. The three seem to have come up with a story that Bankman-Fried burst the unsustainable LUNA bubble that eventually involved the Three Arrows.

But there are already signs that this attempt to victimize yourself is minimal. Zhu wrongly called former FTX employee turned whistleblower Zane Tackett for conspiring against 3AC, wrong important details. He also promoted conspiracies that the Democrats were conspiring with Bankman-Fried (who had a great sponsor) to evade justice.

See more: ‘Down Infinite’: Do Kwon Recovery Effort | Idea

The disgraced Terra co-founder made a surprise appearance on the popular podcast Up just last weekDo joked that he was the wrong person to take advice on “crisis management”.

Do appeared next to the convicted felon Martin Shkreliwho noted that Bankman-Fried and Do could end up in jail, though not too worried about it. not bad. Shkreli, a.k.a. Pharma Bro, a name he earned after raising the price of a life-saving drug, could serve as the template for reinventing himself, after being released from prison, into an “electrical money brother.” death” comprehensive.

It would be one thing if Do, Davies, Zhu or Bankman-Fried had also served a post-conviction sentence. And, to be sure, they all deserve a fair trial. But until then, they really should be gone.

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