padraig (u.s.)
a monkey that will go ape
I think FTX should have its own thread, which I might make later if no one else does
it fascinates me in a way none of the long list of previous crypto hacks and outright scams have
I think in large part bc while so many of those were simple Ponzi schemes and/or, like OneCoin, basic grifts a Depression-era conman would have no problem understanding, FTX strongly echoes like every major traditional financial scandal of the last quarter century - the hubris of Long-Term Capital Management, the shady accounting and reality denial of Enron, the lack of regulation and disastrous intermingling (via mortgages) of retail and investment banking in 2008, the messianism and fraud of Theranos - all wrapped up into one incredible package
the idea that the exact same people could be simultaneously running a trading exchange doubling as a custodial bank (already a terrible idea) AND an investment firm at the same time, with zero questions asked, is mindboggling. It's exactly the kind of thing Glass-Steagall was designed to prevent and repealing Glass-Steagall was so disastrous that it wound up almost collapsing the world economy, and required even more stringent new legislation to set it right.
(nb: before anyone says it, yes I'm aware neither FTX nor Alameda are U.S.-based so U.S. laws and regulation wouldn't apply even if they did exist, the point is that commercial and investment sides should be separated for this exact reason)
it fascinates me in a way none of the long list of previous crypto hacks and outright scams have
I think in large part bc while so many of those were simple Ponzi schemes and/or, like OneCoin, basic grifts a Depression-era conman would have no problem understanding, FTX strongly echoes like every major traditional financial scandal of the last quarter century - the hubris of Long-Term Capital Management, the shady accounting and reality denial of Enron, the lack of regulation and disastrous intermingling (via mortgages) of retail and investment banking in 2008, the messianism and fraud of Theranos - all wrapped up into one incredible package
the idea that the exact same people could be simultaneously running a trading exchange doubling as a custodial bank (already a terrible idea) AND an investment firm at the same time, with zero questions asked, is mindboggling. It's exactly the kind of thing Glass-Steagall was designed to prevent and repealing Glass-Steagall was so disastrous that it wound up almost collapsing the world economy, and required even more stringent new legislation to set it right.
(nb: before anyone says it, yes I'm aware neither FTX nor Alameda are U.S.-based so U.S. laws and regulation wouldn't apply even if they did exist, the point is that commercial and investment sides should be separated for this exact reason)
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