The Strange Details of the FTX Scandal

Speaking of shame, this uh... Now, I'm just getting... This is the per... You and I are the perfect people to talk about this crypto collapse. Because we're scientists. Oh, okay. Economists. Yes. We have strong opinions and no information. Which is a great combination when you're dealing with the fact that people have lost billions and billions of dollars. But what... So Jamie's been filling me in on this over the weekend. And he also is an economist. Yeah, I am not... Jamie... The source is our go-to expert on this. I'll just find interesting links and say, hey, check this out. Which is fine. Yeah. That's journalism. Yeah. And as a journalist, what's your... It seems like... Well, here's the thing. If you're running any kind of currency operation and you're involved in a polyamorous relationship with seven other people, I gotta think you're wacky. Nine. Nine other people? Ten. Ten other people? Ten total. What do they do? They just wear polyamorous, living in a house together? They all live together in the same place, the Bahamas. And they all just bang each other. Hey. So wait, set this up because you're kind of starting in the middle. What are we talking about here? Fun. Talk about a lot of fun in the Bahamas. With billions of dollars, other people's money. Woop, woop. Someone called that a tax haven. Tax haven. Yeah. So this fella was running this exchange and they also had tokens. Someone explained it. Someone did a really good job of explaining it. And we could play that video but it might take too much time. It's like a 12 minute video. But he was explaining how these tokens are like, they're essentially unregulated but it's almost like you're owning stock. Or almost like owning coin. It's very confusing. But it's one of those classic examples of people trying to cash in and then the whole thing came down. Yeah, the term Ponzi scheme has been thrown around. Yeah. Quite a lot. Well there's not just that. There seems to be money missing, like a lot of money missing that got moved from one corporation to a sister corporation. So this is FTX, right? Yes. Yeah. And apparently they reached out to Coinbase. I read that they reached out to Coinbase and Coinbase was like, we can't help you. This looks bad. Like, what's going on over here? And then now it's sort of imminently collapsing and tons of people have invested tons of money over there. And they don't know what the fuck is going on. And people are trying to pull their money out by buying NFTs for ridiculous amounts of money in the Bahamas. Because apparently people in the Bahamas still have access to the thing, to the exchange. Is that the case? Yep. Then they would imagine that they were reaching out to the person and buying this NFT that would have yesterday been worth $9. And now it's about like $10 million. Right. To then make like a currency exchange. Like you can keep 10% of that. Yeah. They jack up the value of it, right? So they basically say, look, I'm going to buy your NFT for $10 million. I'm going to give you a million dollars. And then you give me the nine back. And so that's how they're exchanging money and trying to just draw it out of this account. Right. And who knows how that's going to work out. Right. Where the people are going to be like, fuck you. I'll get you money. How does that work? Right. But all of it is run by this guy who they were in the middle of profiling him. Who sent me this? I did. Michael Lewis is the guy's name. He's the writer of Moneyball and the Big Short, many books. And so he was in the middle of profiling this guy when everything collapsed, which is wild. Right. Wild. That is very wild. Wild. Yeah. Like what are the odds that that happens at the exact same time? Because this guy was this wonder kid who had developed this thing was worth $15 billion and was wearing pajamas and shit, like one of those eccentric cats. Didn't all the crypto kind of take a big massive hit though? I think all of crypto did take a big massive hit. But I think this is a lot crazier than that. Right. This isn't just that crypto took a hit. Everybody's business is fucked. This is like shenanigans, some high level, serious shenanigans. The most generous billionaire. Yeah. That's part of... Like, yeah, this has been unfolding in real time on Twitter, which has been an interesting place to be for the last few weeks. But this guy apparently during this used a PR... I don't know if this would be a scheme, but a YouTuber was paid to make this piece about him and the way he gives away money, which adds to... Well, we wanted people to know. We wanted people to know he's a good guy. Correct. Elon apparently, while Elon was buying Twitter and offered to chip in $3 billion, he said... Elon said that said his bullshit meter off. Because Elon's a serious dude. You say, he's like, this guy has $3 billion liquid? Or a billion rather. $3 billion liquid? Does he have that money? Right. That's a lot of money. Right. Say, we're going to buy Twitter for $44. I'm in for $3. Right. $3 billion? Right. That's a crazy amount of money. Yeah. And so Elon said that said his bullshit meter off. Right. Because where do you get the $3 billion? You can't just say that to that guy. Right. He's like, oh cool. He's not going to just say, oh cool. Right. He's going to know basically what you can and can't. He's the fucking... He's the richest guy in the world. Right. He understands money. Right. And he knows who really has that money and who may be laundering. Yeah. Well, who might be just kind of a crazy person who probably can't believe he's in where he's at. When you find stories about him from before, he was like, the world's youngest billionaire happened super fast. The richest person under 30 committed billions, the vast majority of his fortune, to tackling the most pressing problems facing the future of humanity. Where did he get his money though? Click on that. What are those most pressing problems? Click on that link. What is that link up there? This is on Reddit. Oh, it's on Reddit? Yeah. Interesting. Like, I understand where Elon made his money. I think like all things, he's probably not all bad. It just didn't work out the way he thought it was going to, and it was for so long. And he probably thought he could get away with doing what he was doing. And he probably also thought he was doing good. So if he really is like super charitable, he probably also thought that he was way smarter than he was. Right. Because he's under 30 and he's a billionaire already. He probably thinks he's the fucking shit. Could you imagine if you were worth 15 billion and you were 28, you would think you're the shit. You think you could do whatever. And also you're banging nine people in the house together. Yeah, I'd be doing bad stuff. That's too much money for a 20 something year old kid. You're not playing by any rules. Anybody's rules. Fuck off. And I'm going to give my money away to everybody. And I'm also going to move 10 billion over here. New York Post is reporting this stuff too. Okay. Cryptocurrency billionaire broke the bank for Dems. Okay. So this might be real. So amid the jubilation and gloating by Joe Biden, Chuck Schumer, and pals over Democrats, better than expected showing in the midterms comes a disturbing story that may explain something about how they won such a curious election. Biden's second biggest donor, cryptocurrency billionaire, Wonderkind. Wonderkind or Kind? Wonderkind. Wonderkind. Sam Bankman Fried. Is it Fried or Fried? Fried. Fried. Sam Bankman Fried, AKA SPF. I like that. Saw his business file for bankruptcy days after the election, but not before pumping 40 million into the Democratic Party to spend on, get out the vote, and other shadowy ballot harvesting mechanics for the midterms. Is it Shambolic? That's a new word. What's that mean? Don't know. What does that mean? Let's find out what that means. Shambolic. I'm confused. Shaman-like? What do you think it means? Shambolic? Maybe shaman-like. Chaotic, disorganized, or mismatched? Chaotic, disorganized, mismatched. Oh, I would say, yeah. Definitely. Shambolic. That's a new word. 30-year-old whiz kid once said to have been worth 16 billion had spent 10 million in helping get Biden elected in 2020. SBF's mother, Stanford law professor Barbara Fried, also the co-founder of left-wing political action committee, Mind the Gap, which has raised a reported 140 million to help Democrats win elections through the same get-out-the-vote grift. A more unlikely billionaire you could not find, and of course, his money was built on thin air. A math genius with poor social skills, SBF reportedly lived in a polycule, a polyamorous relationship with multiple people in a luxury penthouse with about 10 coworkers in the tax haven of the Bahamas, where his collapsed crypto exchange, FDX, was headquartered. Wow. This is bad. This is crazy. It's crazy that a person like that got to where he was. New Reuters is reporting that between ... Now Reuters, excuse me, is reporting that between 1 billion and 2 billion of customer funds have vanished from FTX, conveniently after the Democrats safely spent his money. At the very least ... This is a New York Post. Yeah. At the very least, it's the same negligence and lack of due diligence that the celebrities that endorsed companies like this didn't do. How could they know? If you're a celebrity, just like play devil's advocate. If you're Matt Damon or whoever, Tim Kardashian, people are making money with Bitcoin, there's Bitcoin billionaires, there's Coinbase, which is apparently doing very well, there's Bitcoins that are sponsoring sports, they sponsor arenas, they name arenas after them. Actually, I think they have to change one of the arenas. This is one of them, yeah. Yeah. Yeah. Oh, it did? Which one? Which one? Yeah. Partick. That's the main economy of that town. So how would they know? Well, I knew. I mean, I don't mean to say that, but it's like I always questioned it and I knew, so how come they didn't know? Maybe if they turned off their greedy fucking hat for one second and asked some fucking questions about what's actually going on, they would have known. Been like, what actually is this? But they didn't. They said, oh, he's offered me $30 million, so I can endorse them. That'll make people believe in it more and they'll invest in it and then we'll take that money and all your money that you're hoping is going to turn into more money when this thing blows up. We'll take that and fund the fucking Democratic. We'll fund the political party. Yeah, it's slippery. It is definitely slippery. There's something weird about it. That's what happened. There's something very weird about it. It's the same thing. Like, what's the cult again? I keep forgetting all of me. Next example. What they did, what he did with the Seagram's daughters, they funneled all the money into his little cult and with that money, he was able to get the Dalai Lama and a couple other people that gave it legitimacy and then other people going like, it must be legitimate if this person's in it and they started giving them all the money and all he was doing was branding women and fucking them. What did they think he was doing though? They thought he was doing this self-help thing and empowering women and teaching them how to be more rigorous and teach them. I'm very ignorant to this cult. Oh, it's incredible. When I found out it was involving Hollywood people, I was like, yeah. I just gave up on them. The actress from Smallville, there was a few other people, but it was all over the world. It wasn't just LA and it was based in Albany. First of all, that's how you know people are stupid because if you're buying into a cult that's in Albany, you're stupid. Then they went to Albany to attend his little weekend retreat. It's a bad place to live. It's Albany. It's a shit hole. People from Albany are mad at you right now. Do you understand that? Well, they know I'm right though. It's a dump. It's the fucking capital of the state of New York, you son of a bitch. Yeah, I know. I don't know why. It's a shit hole. It's a fucking dump. They did the same exact thing that these crypto people did, specifically this kid freed. It's definitely not the Bahamas. It's not the Bahamas. He got it right. The kid got it right. He got the billions. It's like Bahamas. He just went to the Bahamas. That is a pretty wild thing to do though, to be living in the house, banging all these people you're working with, raking in billions, funneling some of it to the Democratic Party, doing all this philanthropy work, probably thinking you're a fucking gem of a person. Until it all comes crashing down. But if it didn't come crashing down, that's like the Bernie Madoff thing. If it wasn't for the 2008 crash, would Bernie Madoff have been able to keep that hustle going? Oh, he was so good at it. He was so good at it. Oh, he was so good. He used to show up at his client's son's baseball games and answer their phone calls. Of course he did. He really was a good con artist. Of course he did. He showed great attention to them so they didn't look at the stealing hand. But you know the Democratic Party should have done a little due diligence, been like, what is this? They didn't ask questions either. Or not. They just took the money. They took the money. It's not their fault. What the fuck are they supposed to do? If this lady set it up with her son and he's fucking funneling that money, yee-haw, let's go. You don't have to go and do an audit on their business and make sure it's running right. Give me that money. I don't care where you got it from. I don't know nothing. When people come to see your show, how much of it is cocaine money? How many people are coming to see Giannis Pappas that are secretly coke dealers? I would say probably zero percent. More than one. Maybe one. Yeah. Come on. All the shows you've ever done. 100 percent, man. All the shows you've ever done. How many people paid for your ticket and they were involved in illegal activities? That's different though. I'm not the government. I'm not claiming to be good. The government is just accepting a little money. We don't have time. We're running a campaign. We're trying to overturn this Roe v. Wade bullshit. Come on, man. We're trying to codify Roe v. Wade. We need money. That's what I love when they turned over Roe v. Wade. The first thing it is. Give us money. Give us more money. We're going to get donations. You don't know if we're going to fix this. Yeah. And then, yeah, no. The article says that they used them, like Greta Thunberg. Oh, like Greta Thunberg. The teenage eco-evangelist SPF was manipulated into serving a useful purpose. Isn't that kind of editorializing though? It could be. You don't exactly know what was going on there. In other words, FBF's analytical IQ and social ineptitude made him a prime recruit for the cause of hijacking capitalism to divert money to left-wing causes. Whoa. It was a nerd sniped. The article describes Bankman Freed's recruitment into the EA cult when he was a young man at MIT as being nerd sniped, which is the practice of attracting brain power by presenting problems as puzzles. Whoa. EA is effective altruism for those who don't know. Interesting.