Linkedin All right I'm Electronics I'm gonna link to Hottest Girl Accomplish in that we are not watching that play What's been going on with FTX which is the largest crash in crypto history and probably the end of crypto. I'm trying to do it as fast as I can. So here's this guy: Sam Bakeman free. He's like 30 years old and he's been described as a as a Wonder kid, he was put on the cover of Forbes as the next Warren Buffett An investment God He's also described as the most generous billionaire. Okay, the guy you see next to me is the most generous billionaire in the world. Hi, my name is Sam and this is my story Sam that is crazy guys you guys. we watch this yet. but I'm gonna be honest with you I'll watch this one because last one I didn't really understand everything I think he's gonna simplify I'm just gonna watch it and give it a chance Sam lives in the Bahamas with 10 roommates Sam is 29 years old only but Sam has 22 billion dollars or so he did because as of today he is worth exactly zero and facing jail time. So let's get into that. Uh, this kid uh Sam Megan Freed went to I believe MIT and while in MIT he graduated and started working at a trading firm and I started trading uh, small amounts of crypto and things like that and eventually according to Legend he found a Arbitrage opportunity which was basically that you could buy Bitcoin at a certain price in Japan and sell it at a different price in America And he did that to make around 20 million dollars. And when he did that thing, he started his own trading firm called Alameda Research which was him and some other friends. Basically these 10 people in the Bahamas doing random crypto trades and at first the crypto trades were going pretty good because in 2017 2018 Krypt is a pretty small space and the real professional Traders don't really want to get involved in it. but as it starts to grow the opportunities for easy money go down because all the great Traders get in and all the The High Frequency Traders get in. So he pivots to a new idea which is instead of being a Trader of crypto, he's going to be the exchange. So he creates FTX which is the second largest crypto exchange you may have seen it in. The Superman makes sense where there was a commercial where Larry David warns you to not miss out on crypto. It's a safe and easy way to get into Crypto? Yeah, I don't think so and I'm never wrong about this stuff. Never was Don't Be Like Larry Don't miss out on crypto on Nfts on the next big thing. Yikes! So you can watch his FDX and for a while things are going. He's starting to get big investment money from people that think of crypto was the next big thing and they want something safe. They know that crypto is becoming this big thing but they don't really remember their character was really understand it. They're afraid of being called out of touch and just saying that. it seems like a scam. So they start investing big money. But they want a safe option. and FTX an exchange Almost like a bank feels like a safe option. Here is an example this is on: Sequoia Capital Guys, he said almost like a bank isn't the training thing. exactly what what a bank is not and what it shouldn't be. Wait a minute. One of the most respected and biggest investment firms in. Uh Silicon Valley They exchange and trade. You shouldn't never hold money into that. It should never be a bank. Ali this is on their website. Actually, they just took it down today. it was up yesterday. They told a story about the pitch that Sam Begman freed had to Sequoia I Want FTX to be a place where you can do anything with your next dollar you can buy. Bitcoin You can send money whatever currency to any friend anywhere in the world. you can buy a banana. Suddenly the chat window on Sequoia's side of the zoom lights up with Partners freaking out I Love this founder said one partner I'm a 10 out of 10. Yes, exclaim to third that's dumb enough. But then you find out in the story I sit 10 feet from him and I walked over thinking oh that was really good and it turns out that was playing League of Legends Throughout the entire meeting, we were incredibly impressed. It was one of those your hair is blown back type of meanings Jesus This dude was rambling about buying bananas in a fictional super app to so-called the Smartest Investors In Silicon Valley while playing bronze level League of Legends and they gave him hundreds of millions of dollars. Let me show you generally and I have to move fast. Sometimes though, the product speaks for itself. No endless how a banquet now imagine you're a customer does with your money. This ain't GT The Bank Works Imagine you're a customer. This is your money. You take it and you give it option one. They take your money, they put it in a vault and then later when you ask for it back they give it to you. That's not how most Bank works. This is how Coinbase works for example, because this is not necessarily a very good business. So what places like this do is they'll charge it. Does they didn't Um, did it did it. Let's say let's say you do this in real life, right? You put like, what's over here, Um, you put like, uh, you put like a 100k. It's not necessarily a very good business. So what places like this do is they'll charge you fees when you trade. For example, Coinbase charges you fees when you trade. Option two is to take your money and they buy things with it. This is what this is what most banks will do. They'll do better Investments than you will and they'll give you a little bit of the extra money they're already making and they're making a lot of money. as long as like everything doesn't go down all at once, they're in pretty good shot if they want to pay you back out. If you need your money, they have enough money from all the money coming in to pay you. And the only way this really will go bad is if you know there's like a major major major market downturn and everything. Okay, that's how a regular Bank works. You know there's definitely some risk here, but in general it's okay. especially because in a real Bank all of your money is guaranteed up to 250 000. It's called the FDIC Insurance. It doesn't matter if the bank goes out of business, the government will make you whole. Yeah, nothing like that. Understand that like there's a variety of things that can be in this basket here. So imagine if instead of buying uh, a house or real estate or things that if people are exchanging it, why the are they keeping the money there once exchanged generally are stable and appreciating value. What if they bought a holographic Charizard Do you know what I'm saying? What if they took your money and they bought a holographic charger? Now this is still something you can invest in. It can still go up in value. It's not nothing. It's worth something that's easy to give them 300 000 and they secretly buy a holographic Charizard and then later you ask for your money back. Now there's an I I I don't think you're getting I don't think you're getting it again. The most of the delaying time it takes for to trade it okay is like dude. for Bitcoin it'll be like 50 minutes. For Ethereum. it'll be like instant right. You put money into their system. You trade it, get it back, You put it back to your wallet. What? What am I missing? Why? Why would you hold it there? Now this thing technically is now worth 350 000. So they have your money. They have more than what you've given them, but they don't have it liquid. So in order to give you your money back, if you're asking for it, they would have to sell the Charizard, collect their money, keep a little bit of profit, and give you your money back. Now if it's one person asking for their money back, that's fine. But what if they've bought a hundred thousand? Charizards And if everybody's asking for their money back at the same time, they can't sell all of these Charizards at once without tanking the value of Charizards. Suddenly, a Charizard is very cheap because they're selling so many at once. Now Imagine if instead Of a Charizard it was a dog crypto token that doesn't even have any. Basic Value to begin with. What if it's even worse than this? That ladies and gentlemen is what FTX is doing. Interrupt in the middle to bring your note from Mr Wonderful of Shark Tank Who had something to say about Sam Beckman Freed big advocate for Sam because he has two parents that are compliance lawyers. If there's ever a place I could be that I'm not going to get in trouble, it's going to be an FTX. So oh, you know what they're doing right here is incredibly stupid buying buying crypto with customers. Uh, money. Already stupid. But the real problem is this that the uh Alameda research which is the other company that he owns was making all of these terrible terrible bets on crypto with their CEO being a 28 year old Harry Potter Fan who also dated Sam Bankman Freed and I've seen interviews with her where it clearly shows she has no idea what she's talking about when it comes to investment, you know, adjusted myself to, you know, Okay, we're farming comp. Uh, and then it's like oh, now we're farming these things that are like foods and then now we're farming these like whatever weird, like meta food. wait, foreign like, wait. let me play. Rust Then you're and you're doing tons of things I don't know. Yeah. I Feel like I did manage to get yeah, Get away from my initial skepticism and end up embracing the mindset of like, great, gonna like, go out and look for like, whatever. Like the weirdest dumbest thing people are talking about today and like that's gonna be the thing I'm working on today. She literally has no idea. And these guys are losing money hand over fist. They're just. they're they're They're investing all sorts of wild things and so Sam Bankman Freed starts taking money out of customer deposits I Remember Remember last time when I told you guys that in in emerging emerging developing markets, right, there's a lot of nepotism and people that know what the they're doing right? Remember I told you guys about OverWatch League right? I wasn't kidding it. it's across the board at FTA It is awesome funding Alameda research illegally. This is illegal. That is where this becomes an Enron moment. This is where it comes like a this guy's probably going to jail moment. They were loaning it to Alameda and they were getting in return something called Ftt token. Ftt token is a dog shade up crypto garbage that was made up by FTX that was basically supported by the profits from FTX FTX Was buying this token regularly to keep it pumped up. It came out recently. Isn't that like a self? Ponzi After a leak that almost all of the money on their books, it's just Ftt tokens. They had a bunch of Ftt token that they said was worth the exact amount of everyone's deposits. and so people realize, wait a minute if we ask for our money back. you can't sell these to get enough value to make all our money back like our money no longer exists in this. Vault it's just a bunch of this token. and so once that leak comes out, the CEO of Binance which is this guy basically says I own a good amount of Ftt token and I'm gonna dump it all and that's gonna make the price of this crash because it already is a shaky investment. It's not really worth what you say 25. once he says that, can you really blame the guy though? If there's like if there's like a scare in their people and there's things are shaky, people are already gonna dump their own Ftt, right? This guy owns a lot of it. it's his best interest to dump that piece of no. Every person who has money in Ftx's Vault realizes this place is gonna go down. So they all start trying to frantically pull their money out. Which of course causes this to start to crash. The whole House of Cards unwinds overnight. literally overnight. FTX collapses as an entity. They just simply do not have the money. And so Finance Originally there's a plan, the shark movement. You can't blame him. It is a sharp move though. I mean I mean if it's if it's possible and logical, you know what's gonna happen. Offers to buy up FDX for like a dollar, just basically buy it up. But then they look at Ftx's books and they realize FTX is in so much debt that if they buy FDX it'll probably bankrupt them. So now nobody is buying FTX Nobody can get their money out uh, including this man Tom Brady who's probably got to play football until he's 59. Now places like TS SM places like the Miami Heat all of which accepted major FTX sponsorship deals that lasted 10 plus years are all not getting paid TSM has built almost entirely on this FTX money which is not getting paid I predict you know we're gonna I Mean it's not legal to communicate like that in a stock market should be considered gambling and in turn have restrictions set like age restrictions. Well, it wasn't gambling though. it wasn't gambling it. That is worse than gambling. These are like okay. also. oh, wait a minute. you can't make it like that. And in stocks, these aren't stocks. They're crypto and it's like not foreign legitimately. Mr Beast might buy TSM I'm not even kidding. uh, why did anyone catch this? Well, all of the audits for FDX were performed by the first ever CPA firm in the Metaverse. This is the firm that Walsh of course it's worse than gambling dude. Not only the price from up and down and you're gambling on the value you can. There's a chance you wake up one day with your all your chips and you go to the cashier and say hey, cash here I Got ten thousand dollars in chips they're called Ftt Casino Chipset I'd like to cash out to buy myself a new car and they say hey man So I do listen. The problem is that oh we're out of money and if we did have the money, um, the the money you had, yeah, it went like it's more like one percent what it's worth. So we could give you 100 bucks if you want to like next week. what the you talking about Street Relied upon to do accurate accounting on Fpx. Now let's talk about Binance Broker before we get on. Because remember yesterday or two days ago I Talked about this and someone said yeah, okay, FTX is dead but Binance is fine and I said puppy laugh Because guess what? As of today, a few hours ago, it shows that Binance's reserves are almost half of its Holdings in its own tokens. It's the same problem. So crypto as a whole. basically every exchange. but maybe buying Bitcoin on coinbase is fraudulent. It's all fraudulent all the way down. It's all a massive Ponzi scheme. And again, this wasn't hard to find out. So Sammy Graffade went on a podcast when he was at the height of his Fame and power and he was asked business questions about what he does and he basically pulled no punches in describing word for word a Ponzi scheme. He said imagine this money as a magic box that you put money into and then little bits of money comes out. I Get it. I Get it. I Get it. They create their own coin. It's completely related. It's not. That's like a raw profits right? Because the coin is worth nothing. Unless unless people give it value, it means that that's for people that are buying into it right? And then what they do is that they kind of pump it and you're like and then they buy it themselves right when all the liquidity is getting the out right? Well, everybody wants to be involved in that block so they keep giving you money to put in there. He basically said that like I'm not even changing too many words Matt Levine on the podcast said this almost I think of myself as like a fairly cynical person and yep, that was so much more cynical. Yeah. I Would have described farming like you're just like, well I'm in the Ponzi business and it's pretty good and nobody call them out and this guy kept on living as a billionaire and crushing it for another like year after this because again, this guy's this guy's absolutely the modern day version of Enron By the way, guess who is appointed as the new CEO of FTX today in order to oversee its liquidation? John J Ray the guy that liquidated Enron 20 years ago. it's a full circle this dude's back. Oh here here's a little Cherry to end it on: Update: as of a few minutes ago: FTX official and FTX Us's wallets have been hacked with over 600 million dollars leaving the exchange late Friday it's convenient hacked I'm sure this is a probably a last minute looting by people that had access in the Bahamas to whatever was left of this absolute Ponzi scheme. Rarely rich people go to jail. Unfortunate byprock of the system, but thankfully thankfully these guards aren't Rich almost I mean Spf's current amount is uh, one dollar of value one group I've really want to call out specifically are people that, uh, took all of Ftx's money and chilled it relentlessly I don't want to name names, but there are many, many YouTubers that I've seen in the space that not Financial Advice: did a ton of Shilling for FTX and including TSM by the one talking about TSM there should be some accountability on on where this money is coming from when you talk about it and sell it into this I didn't think if there's any of this exchanges dude I had money into I have like a little bit I have other than binance that I pulled out like as soon as I got it and I I had some in uh, in Coinbase that pulled out. To people you know, we've done stuff on our side with Coinbase. Since we agreed to it, we had to look in the business model of Coinbase to make sure it made any sense. I Don't think Coinbase is the stock I would buy I'm not I wouldn't invest in it. but I do believe that they have a business model where they at least don't. they hold your money, You give them your response. all my crystal is cold. Dude, all my all my crypto is all cold ain't no dude did even I don't even know where it's at physically I don't even know funny that you hold it and then give it back I don't like it and I hope we get to a situation where people have a little bit of credibility or a little bit of ounce of Shame before taking any possible sponsor that comes their way. but that's it. That's that's sort of the basic coverage of what's going on in the world of FTX and it's going to get lost I Entrusted it I entrusted it with a a trusted individual, right? That's not. even. More Factors lead to a lot of terrible, terrible knock-on effects of the rumors. No, it's a lawyer, so it's like a Lord type of person. Okay, it's like a lawyer. It is a lawyer. Pretty much you have any money in crypto at all that isn't like it was trans idea I thought it was pretty smart so I did that well I don't know Bitcoin on your own wallet I would be very concerned. um I thought it was pretty smart actually. yo this is X x on the video. Anyone knows that boy I don't know. he's just so sorry. anyone knows that boy I don't know, he's just so sorry.