It’s deeply surprising that investing in money that isn’t money, at a bank that isn’t a bank, didn’t go well
Source: Why in the hell did we need cryptocurrency? Let me explain, sort of
probably the best explanation of what appears to have happened. simple ponzi scheme:
“SBF still doesn’t understand what happened to all that money he took from people and put into FTX and turned into FTTs or whatever the hell else he turned it into, but I think I do. It was all just another boring old-fashioned Ponzi scheme, you know, where somebody sets up a phony company and takes people’s money and promises them a big no-risk return on their investment, and then he just does whatever the hell he wants with it. Bernie Madoff ran one of those in much the same way SBF ran his. On one floor, he had a company that took in the money. On another floor, he had what he called his “trading” department, where the money was supposed to be invested, like an investment bank does. Instead, on that other floor, he had a whole department that just created phony statements which were mailed to investors claiming that their money had returned a 10 percent profit, or something like that. But when the investors wanted their money back, there was no money, because Bernie had spent it on watches and fancy cars and airplanes and houses.
Think of it this way: SBF had one floor, FTX, set up to take in the money, kind of like a cashier at a bank. And then he had another floor, Alameda Research, set up to invest the people’s money, but that wasn’t what they were doing at all. They were minting a cryptocurrency called FTT, and then sending people statements telling them how many FTTs they had. But the money — you remember money, the green stuff people earn with their hard work — was being used by SBF to donate tens of millions to Democrats right out in the open, and the same tens of millions to Republicans as “dark money,” because, you know, Sam didn’t want all his investors like Tom Brady and Gisele Bundchen and other notables to have to sit at dinner party tables and talk about how their money was being used to elect nasty, distasteful, MAGAish Republicans, did he?”
