Erik Voorhees and Cobie on Why FTX Loaned Out Customers’ Assets - Ep. 419
Explicit content warning
11/11/22 • 66 min
1 Listener
Erik Voorhees, founder of ShapeShift, and Jordan Fish, aka Cobie, crypto investor and host of UpOnly, talk about the collapse of FTX.
Show highlights:
- the links between FTX and Alameda
- what kickstarted the blowup of FTX
- why Erik and Cobie think that Bankman-Fried's behavior was “sociopathic”
- why the $10 billion hole is so shocking to Cobie considering the advantages that FTX had as a company
- whether this would have ever happened if the prices hadn’t plummeted in the bear market
- the tension between advocates of privacy and those who want to limit criminal activity
- why Erik believes that SBF’s donations to both political parties are bribery
- whether regulators can prevent an exchange from collapsing
- whether Changpeng Zhao did a better job at investigating FTX than anyone at the SEC
- the likelihood that this will result in criminal charges
- how blockchain technology is the solution to the problem of centralized exchanges doing things in the dark
- Tether’s decision to freeze USDT owned by FTX
- Erik’s response to Bitcoin maximalists who say FTX was caused by altcoins
- whether it is a mistake for exchanges to issue their own tokens
- how big the contagion could be in the industry
- why nobody should leave a significant amount of their net worth in a centralized exchange
- Erik’s message to regulators
- whether SBF was aligned with the values and the ethos of crypto
Thank you to our sponsors!
Erik:
- ShapeShift
- Previous Unchained episodes:
- Why ShapeShift’s Erik Voorhees Thinks Toxic Bitcoin Maximalism Is Bullshit
- Shapeshift’s Erik Voorhees on How Crypto Will Separate Money and State
Cobie:
- Substack
- UpOnly
- Previous Unchained episodes:
- Cobie and Chris Burniske on How to Navigate a Crypto Bear Market
Episode Links
Previous coverage of Unchained:
- Sam Bankman-Fried on How to Prevent the Next Terra and 3AC
- The Chopping Block: FTX: The Biggest Collapse in the History of Crypto?
FTX Collapse:
- FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall
- SBF’s video talking to regulators
- Unchained coverage:
- FTX May File for Bankruptcy After Binance Walks Off the Deal
- FTX Needs $8B to Meet Investor Withdrawals: Report
- Tron Founder Justin Sun Says He Is Working With FTX on a Solution
- US DOJ Joins SEC and CFTC Probe of FTX
- FTX-Issued Wrapped Solana Tokens Could Add to DeFi Contagion: wBTC Creator
- Sequoia Capital Writes Off $214M FTX Investment to Zero
Binance’s dropped deal with FTX
- CZ’s
Erik Voorhees, founder of ShapeShift, and Jordan Fish, aka Cobie, crypto investor and host of UpOnly, talk about the collapse of FTX.
Show highlights:
- the links between FTX and Alameda
- what kickstarted the blowup of FTX
- why Erik and Cobie think that Bankman-Fried's behavior was “sociopathic”
- why the $10 billion hole is so shocking to Cobie considering the advantages that FTX had as a company
- whether this would have ever happened if the prices hadn’t plummeted in the bear market
- the tension between advocates of privacy and those who want to limit criminal activity
- why Erik believes that SBF’s donations to both political parties are bribery
- whether regulators can prevent an exchange from collapsing
- whether Changpeng Zhao did a better job at investigating FTX than anyone at the SEC
- the likelihood that this will result in criminal charges
- how blockchain technology is the solution to the problem of centralized exchanges doing things in the dark
- Tether’s decision to freeze USDT owned by FTX
- Erik’s response to Bitcoin maximalists who say FTX was caused by altcoins
- whether it is a mistake for exchanges to issue their own tokens
- how big the contagion could be in the industry
- why nobody should leave a significant amount of their net worth in a centralized exchange
- Erik’s message to regulators
- whether SBF was aligned with the values and the ethos of crypto
Thank you to our sponsors!
Erik:
- ShapeShift
- Previous Unchained episodes:
- Why ShapeShift’s Erik Voorhees Thinks Toxic Bitcoin Maximalism Is Bullshit
- Shapeshift’s Erik Voorhees on How Crypto Will Separate Money and State
Cobie:
- Substack
- UpOnly
- Previous Unchained episodes:
- Cobie and Chris Burniske on How to Navigate a Crypto Bear Market
Episode Links
Previous coverage of Unchained:
- Sam Bankman-Fried on How to Prevent the Next Terra and 3AC
- The Chopping Block: FTX: The Biggest Collapse in the History of Crypto?
FTX Collapse:
- FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall
- SBF’s video talking to regulators
- Unchained coverage:
- FTX May File for Bankruptcy After Binance Walks Off the Deal
- FTX Needs $8B to Meet Investor Withdrawals: Report
- Tron Founder Justin Sun Says He Is Working With FTX on a Solution
- US DOJ Joins SEC and CFTC Probe of FTX
- FTX-Issued Wrapped Solana Tokens Could Add to DeFi Contagion: wBTC Creator
- Sequoia Capital Writes Off $214M FTX Investment to Zero
Binance’s dropped deal with FTX
- CZ’s
Previous Episode
The Chopping Block: FTX: The Biggest Collapse in the History of Crypto? - Ep. 418
Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi and Tom Schmidt were joined by Nic Carter, reformed Bitcoin Maxi, and Laura Shin, CEO of the show, to chop it up about Binance’s buyout of FTX.
Show topics:
- Haseeb's tl;dr of Binance's possible acquisition of FTX
- whether Alameda is the new Three Arrows Capital
- the implications of FTX's collapse for regulators and lawmakers
- what will happen to all the companies that lent money to Alameda
- Sam Bankman-Fried's emergency effort to raise billions of dollars
- whether there could be criminal charges against FTX
- why FTX was not as profitable as other derivative exchanges
- what the probabilities are of Binance actually buying FTX
- whether the enterprise value of FTX is negative
- Tom's concerns about the concentration in the industry
- how FTX's implosion will impact crypto venture capital firms
- whether Solana can survive without SBF's support
- how the lack of transparency kicked off this situation and how blockchains help solve this issue
Hosts
- Haseeb Qureshi, managing partner at Dragonfly Capital
- Tom Schmidt, general partner at Dragonfly Capital
Guests
- Nic Carter, reformed Bitcoin Maxi
- Nic’s proof of reserves
- Laura Shin, author, host of Unchained
Episode Links
Previous coverage of Unchained:Acquisition of FTX- CZ’s announcement
- SBF’s announcement
- Binance’s merkle-tree proof-of-reserves
- Unchained coverage:
- Binance Set to Buy FTX Amid Liquidity Crisis
- SBF’s Net Worth Plummets 94% In One Day: Report
- There are Rumors that Alameda Went Down With 3AC in Q2
- Alameda Owes More Than $30M in DeFi Debt
- Coinbase and Genesis Declare No Exposure to Collapsing FTX
- Binance Might Have Triggered a Liquidity Crisis as FTX’s Main Wallet Lost 290K ETH in Two Days
- Binance to Liquidate Millions Worth of its FTX’s Token Holdings
- FTX’s Stablecoin Reserves Hit One-Year Low
- Alameda’s Balance Sheet Sparks Controversy
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Next Episode
Will FTX Customers Ever Recover Their Assets? Two Insolvency Experts Weigh In - Ep. 420
Wassielawyer, a lawyer specializing in restructuring and insolvency, and Thomas Braziel, founder and CEO of 507 Capital, talk about the bankruptcy of FTX.
Show highlights:
- what the bankruptcy process of FTX is expected to look like
- why FTX got to the the point of filing for bankruptcy protection
- why Wassie thinks Alameda is dead
- why FTX filed for bankruptcy in the US given that it's a Bahamian company
- how FTX's balance sheet is composed and whether it includes Alameda
- whether Justin Sun will be dragged into the bankruptcy
- how FTX's terms of service differ from Celsius’s and Voyager’s
- how the $600 million hack affects the bankruptcy proceeding
- whether it's worth it to spend millions of dollars in law firms to go after the hacked money
- what's the impact of the 192 million FTT tokens that were printed Saturday night
- what will happen with the fork of Serum and the forked tokens
- the consequences for all the projects that FTX invested in
- why Wassie thinks that tokenizing the liabilities could be a good potential solution
- how the FTX's bankruptcy affects Voyager's proceedings and customers
- whether FTX’s bankruptcy has put BlockFi in trouble
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Thank you to our sponsors!
Wassielawyer:- Thread on community buyout
- Previous Unchained episodes:
- Why the Messy 3AC, Celsius, and Voyager Bankruptcies Will Drag on for Years
- Three Crypto Bankruptcies: 3AC, Celsius and Voyager. What Happens Now?
- 507 Capital
- Previous Unchained episodes:
- Will Celsius Survive the Bankruptcy Process?
Episode Links
Previous coverage of Unchained on FTX:- Erik Voorhees and Cobie on Why FTX Loaned Out Customers’ Assets
- The Chopping Block: FTX: The Biggest Collapse in the History of Crypto?
- Sam Bankman-Fried on How to Prevent the Next Terra and 3AC
- FTX filed for Chapter 11 bankruptcy protection
- Sam Bankman-Fried built a "backdoor" to his FTX exchange to change financial records and move funds without alerting others.
- $600 million hack
- Unchained coverage:
- The Bahamas Loophole: FTX Users Buy KYC Accounts to Withdraw Crypto
- Could FTX’s Bankruptcy Trigger a Domino Effect?
- FTX May File for Bankruptcy After Binance Walks Off the Deal
- FTX Needs $8B to Meet Investor Withdrawals: Report
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