July 30, 2026 • 48 mins
Where is crypto going? In the finale final, we conclude the story of the astonishing rise and spectacular fall of crypto entrepreneur Sam Bankman-Fried. Along the way we speak to the investigative journalist whose reporting is credited with triggering his downfall.
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Speaker 1 (00:03):
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Speaker 2 (00:06):
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a time.
Speaker 1 (00:39):
Previously on Red Pilled America.
Speaker 2 (00:40):
By late twenty eighteen, Alimed Research was already in trouble.
Speaker 3 (00:46):
I mean, the company didn't have any lawyer, so I
think my utility there was pretty obvious.
Speaker 1 (00:51):
Hundreds of unscrupulous characters began creating their own cryptocurrencies.
Speaker 4 (00:56):
And the currency that you would use would be these munchies.
Speaker 3 (00:59):
You know, it's so outland as that I'm tempted to
accuse you of just making that up.
Speaker 5 (01:04):
We also recently launched a derivatives exchange called FTX.
Speaker 1 (01:07):
Sam called his new cryptocurrency FTT.
Speaker 2 (01:11):
By the end of twenty nineteen, CZ became one of
the first major investors in FTX.
Speaker 6 (01:16):
They were treating this guy like it us a guru.
Speaker 7 (01:18):
How did you do this so quickly?
Speaker 2 (01:19):
FTX raked in an industry record nine hundred million dollars.
Speaker 1 (01:26):
I'm Patrick Carrelci.
Speaker 2 (01:28):
And I'm Adriana Cortez.
Speaker 1 (01:29):
And this is Red Pilled America, a storytelling show.
Speaker 2 (01:34):
This is not another talk show covering the day's news.
We are all about telling stories.
Speaker 1 (01:39):
Stories. Hollywood doesn't want you to hear stories.
Speaker 2 (01:42):
The media marks stories about everyday Americans at the Globalist ignore.
Speaker 1 (01:48):
You could think of Red Pilled America as audio documentaries,
and we've promised only one thing, the truth. Welcome to
Red Pilled America. We're at the third and final part
(02:12):
of our series of episodes entitled Crypto Revisited. If you
haven't heard the previous episodes, you should go back and
listen from the beginning. We're looking for the answer to
the question where is cryptocurrency going? By telling the story
of the astonishing rise and spectacular fall of crypto entrepreneur
Sam Bankman Freed.
Speaker 2 (02:30):
So to pick up where we left off at the
close of twenty twenty one, Sam Bankman Freed was in
the midst of a power move. The young crypto entrepreneur
had some leverage. He'd just come off an industry record
nine hundred million dollar fundraising tour for his cryptocurrency exchange
FTX and hiss Pitcoin was peaking at nearly seventy thousand
(02:52):
dollars per coin. The price of Sam's FTT token rose
along with it. Sam was climbing to the top of
the crypto world, and his political donations were beginning to
pay off as well.
Speaker 5 (03:04):
Thank you Chairwater, as ranking Member mckenry, and all the
members of the committee for having me here today to testify.
It's an honor to be here.
Speaker 2 (03:13):
He spoke at a congressional hearing on the need for
crypto regulations.
Speaker 5 (03:16):
I think it is important and I think that is
healthy that the industry will be regulated.
Speaker 2 (03:23):
Sam appeared to have something up his sleep, and he
had a trusted sidekick to help him all along the way.
Speaker 3 (03:29):
I think we've always enjoyed working together and thinking together,
at least I like to think.
Speaker 7 (03:34):
So.
Speaker 2 (03:35):
That's Sam's father, Joe Bankman, talking about working with his son. Joe,
a Stanford law professor began helping his son early in
his crypto ventures. Joe would eventually focus on two specific areas.
The first was ftx's charity endeavors.
Speaker 3 (03:50):
That's about half of what I do, and the other
half of what.
Speaker 8 (03:53):
I do is regulation broadly speaking, so it's the bills
moving through Congress, it's whether we'll get approval from a
regulatory agency, things like that.
Speaker 2 (04:05):
Joe Bankman was a lawyer, so the formulation of regulations
aligned well with his expertise.
Speaker 3 (04:10):
In fact, all regulatory changes anytime you work through the government,
that's really legally in KENSIB.
Speaker 2 (04:17):
Regulations also played a pivotal role in the world of finance.
In effect, they act as the gatekeeper of who does
and does not get to enter the playing field. So
how regulations are crafted can mean life or death for
a company. By the close of twenty twenty one, it
appeared that Sam and his father had a plan in motion.
(04:39):
It looked as if they were trying to set up
a regulatory framework that would benefit Sam's array of crypto
companies while hurting his competition.
Speaker 9 (04:46):
They wanted to create a monopoly, there's no question about it,
to match finance that's been.
Speaker 2 (04:50):
Armstrong crypto enthusiast and creator of bitboycrypto dot com.
Speaker 9 (04:54):
So here was the plan. We'll bring in all of
these other companies to cover lending, to cover defive, to
cover exchanges, to cover deriva trading, margin trading. They wanted
to bring kind of one company in that did everything
from every niche in the crypto world, bring them up
under FTX. Then they were going to create the Federal
BIL license.
Speaker 2 (05:15):
Basically a proposed federal license to operate in the US
crypto industry, and.
Speaker 9 (05:19):
They were going to be the only show in town
that had the license, and all their companies would get
the license. Due to being under their umbrella, they did
have such a head start on anybody else trying to
apply to get the license that they would just be
able to win from the ground up. So that was
kind of the plan.
Speaker 2 (05:34):
But in order to have real influence over the parameters
of that license, Sam would need to position himself as
the authoritative voice of the crypto world, so he launched
one of the most audacious branding campaigns that the world
of finance had ever seen. Sam had already signed Tom
Brady and Giselle as FTX folkspersons. He then expanded into
(05:56):
the NBA.
Speaker 10 (05:57):
Crypto exchange FTX, spending one hundred and thirty five million
to rename the home of the Miami Heat.
Speaker 11 (06:03):
This is the first time a crypto firm has won
naming rights to a major US sports venue.
Speaker 2 (06:08):
FTX would eventually sign a deal with Steph Curry and
Shaquille O'Neal. He infiltrated Super Bowl fifty six with an
ad featuring comedian Larry David. Like I was saying, it's FTX,
it's a safe and easy way to get into crypto,
I don't think so. Sam carpet bombed young entrepreneurs with
YouTube influencer endorsements.
Speaker 12 (06:27):
Now, before we get to part two, I have to
give a quick shout out for today's sponsor.
Speaker 13 (06:30):
It's FTX US.
Speaker 4 (06:31):
You've probably heard of them before.
Speaker 6 (06:32):
One of the largest US regulated cryptocurrency exchanges in the world,
trusted by millions of users to buy, solid track and
trade both crypto and NFTs.
Speaker 14 (06:41):
They've been the ones that are going out investing in
and buying other crypto exchanges that are struggling.
Speaker 6 (06:47):
I'll explain just a moment. Right after I mentioned that
if you want to take advantage of buying the crypto
dipp check out our sponsor today FTX.
Speaker 2 (06:53):
Sam also wanted to win over traditional finance who'd been
a bit skeptical about crypto. Investor Kevin O'Leary initially had
a negative impression of the crypto industry, but a long
came Sam bankman Fried, who lathered the Shark Tank star
with greenbacks, and Kevin remarkably did a one to eighty
on the subject for the entire finance community to see.
Speaker 15 (07:13):
I don't know where you are in crypto.
Speaker 14 (07:15):
You were so negative for a while, then you got
totally positive.
Speaker 16 (07:18):
Do you own bitcoin now, Kevin?
Speaker 17 (07:20):
What's your posision at crypto right now?
Speaker 18 (07:22):
You do?
Speaker 14 (07:22):
I have millions of dollars. Twenty percent of my portfolio
is now in crypto currencies and blockchain. Well, you have
to be diversified. I own thirty two different positions, including
equity and FTX, and I have to disclose I'm a
paid spokesperson for that company.
Speaker 2 (07:36):
And Sam pulled in his new spokesmodel, Giselle, to reach
into the world of luxury.
Speaker 4 (07:41):
Today, we're going to.
Speaker 10 (07:42):
Be discussing Giselle and Sam's shared mission philanthropy, which is
the theme of our spring summer twenty twenty two luxury campaign.
Speaker 2 (07:52):
The FTX founder joined Jizelle in a print out that
was published in America's most prestigious magazines, including Vogue, Dandy, Fair, GQ,
and The New Yorker. The two took the stage at
the Bahamas Cryptoconference to announce the campaign.
Speaker 4 (08:06):
And I think it's really important to think about what
are we leaving behind, because either we're going to be
part of the solution or were going to be part
of the problem.
Speaker 5 (08:13):
I think when you start thinking about the trillions of
people who haven't been worn yet who are going to
inherit this or from us, the things that we do
that sort of impact what it is exactly that we're
passing down to them are just incredibly important and magnified
way beyond the scope of almost anything else that we do.
Speaker 2 (08:29):
Sam was attracting some of the most gifted virtue signalers
on the planet. Former President Clinton, popstar Katy Perry, and
former Prime Minister Tony Blair all attended his event. He
amped up his effective altruism message and the media sopped
it up.
Speaker 16 (08:45):
Crypto billionaire Sam bankman Fred is doubling down on his
embrace of effective altruism This is something that he's talked
about so much that he's really in crypto so that
he can give the money away, essentially finding an avenue
where you can make the most money to give away
the most.
Speaker 4 (09:01):
He's fully committed a giveving millions and now billions of
dollars to charities again.
Speaker 2 (09:07):
Ben Armstrong of bitboycrypto dot com.
Speaker 9 (09:10):
Alameda has the greatest propaganda arm we've seen since the USSR.
They use a combination of paid engagement bots, paid influencers,
paid spokespeople, paid media in order to control a narrative.
Speaker 2 (09:23):
The FTX branding effort may have looked as if it
was intended for the general public, but that was a
peripheral benefit. Its ultimate target was really a very small
audience in Washington, DC that included the SEC chairman Gary Gensler.
Speaker 1 (09:38):
In March twenty twenty two, Sam reportedly met with Gensler
to discuss regulations on crypto exchanges like FTX, and Sam
had an inside track with Gensler. The CEO of Alameda Research,
Caroline Ellison, was the daughter of Gensler's old boss when
he worked at MIT. Sam's plan appeared to be falling
into place. What the problem was that a crypto winter
(10:00):
was brewing, and Sam appeared completely oblivious to the coming storm.
Speaker 6 (10:06):
When you've become successful and you buy your own media
and you surround yourself with people who only tell you
that what you're reading on the cover of Forbes is
actually a reality, you begin to believe it.
Speaker 1 (10:16):
That's a representative from Doomberg, one of the most widely
read finance newsletters on subscription based platform Substack.
Speaker 6 (10:23):
Sam Bankmyfree spent a lot of money to buy great press.
When you read it, it's easy to forget that you
paid for it and it's not real. And then anybody
who points out to you that, hey, maybe we have
these religious here and yes, I understand this is part
of your pr strategy, but we should consider AB and
C gets eliminated from your inner circle. And the only
people who remain in your inner circle are people who
(10:45):
are willing to lie to you about how great you are.
So then you come very insulated.
Speaker 1 (10:49):
This was undoubtedly sam situation, and because of it, he
thought he'd built a rock of Gibraltar, but he was
about to figure out that he'd really erected a house
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come alive. Welcome back to red pilled America. So as
Sam Bankman Freed was soaking in the adoration of his
charm offensive, a cryptostorm was brewing. The early signs began
(12:43):
to surface right around the time Sam testified before Congress
in December twenty twenty one. The signal was, of course,
the original cryptocurrency.
Speaker 13 (12:52):
Bitcoin is having a December to forget. Along with the
other major cryptos.
Speaker 16 (12:56):
Bitcoin is hovering just below the fifty thousand dollars level
heading into the new year. That's after hitting seven eight
thousand just last month.
Speaker 1 (13:04):
As the new year got underway, the decline continued.
Speaker 16 (13:07):
Bitcoin now trading below that thirty seven thousand dollars handle,
hitting a one month low.
Speaker 1 (13:14):
At first, people choked up the dip to just the
volatility of the crypto market, but by early May twenty
twenty two, the cracks and the dam burst open, and
many of the companies propped up by the crypto bubble
began to pop.
Speaker 16 (13:26):
Crypto obviously right now getting crushed.
Speaker 10 (13:29):
Tonight, a massive selloff of cryptocurrency, erasing more than two
hundred billion dollars from the entire market in a single day,
the price of bitcoin plunging to its lowest level in
sixteen months.
Speaker 19 (13:41):
Gone down to its slowest point for quite a while.
And that's something that doesn't usually do. Actually going down
to a low pass the year before has only ever
happened once before. This is quite a big deal. More
than three hundred billion dollars was wiped out just in
the last week.
Speaker 20 (13:57):
What has happened?
Speaker 18 (13:58):
What's gone wrong?
Speaker 16 (13:59):
I mean, this is the definition of a black swan event.
Speaker 18 (14:01):
This is the Lehman Brothers coll of crypto.
Speaker 10 (14:03):
The numbers sending some investors spiraling, fearing they could lose
it all.
Speaker 9 (14:08):
One minute, it looks like the market's going to rip.
Speaker 21 (14:10):
The next minute, it looks like the market's going to dip.
Speaker 16 (14:12):
And I don't know what in the world's going on.
Speaker 20 (14:14):
So I'm out, no moss in totally.
Speaker 2 (14:16):
It seems crazy to say, but I'm then around thirty
five thousand dollars.
Speaker 4 (14:20):
I actually lost over half my portfolio.
Speaker 3 (14:22):
I lost one point six million on Luna and then
I put it in another too.
Speaker 10 (14:25):
D can at those trading platform Coinbase now warning that
if they go belly up, customers could lose all their
crypto investments, which aren't technically subject to bankruptcy protections.
Speaker 16 (14:36):
And if you're a retail investor, get you're not protected,
right or does it depend on jurisdiction, You're.
Speaker 19 (14:42):
Not protected pretty much anyway, there's no protections at all.
Just like with the rest of crypts, any money you
put in is entirely at your risk.
Speaker 21 (14:48):
Probably with bitcoin, there's something I underpinning. There's no government,
there's no company, there is no rent, there's something to
actually kind of prop up the value of cryptocurrency. Stories
out of New York of people losing half million dollar fortunes, cars, homes,
literally the whole lot because they punt it on this stuff.
I said, when everyone's everyone's happy. As soon as that
turns around, it can really hurt.
Speaker 5 (15:06):
You may think it sound like a Ponzi scape.
Speaker 6 (15:08):
What we have seen is nothing short of carnage.
Speaker 16 (15:10):
It's quite horrible to watch.
Speaker 12 (15:12):
This event is probably the most destructive wealth event in
the history of crypto.
Speaker 1 (15:18):
By the summer of twenty twenty two, company after company
that either created their own cryptocurrency or had most of
their holdings in some new crypto tooken came crashing down.
How could this have happened? How could an industry that
had been heralded by financial media been celebrated as the
next big thing come crashing down in a matter of days. Well,
(15:43):
a lot of it had to do with those new
types of cryptocurrency tokens entering the market. Remember when Sam's father,
Joe Bankman, learned about initial coin offerings or icos.
Speaker 18 (15:53):
Now, in my own personal opinion, the large majority of
these icos are frauds or they're going to fail.
Speaker 13 (15:59):
I'll totally agree with that.
Speaker 1 (16:00):
By the way, Well, it turns out that by twenty
twenty two, the industry had become littered with these fraud
coins as the crypto winter was slowly building. Sam went
on a Bloomberg podcast and used an analogy to explain
how many of these cryptotokens come into existence.
Speaker 4 (16:20):
Where'd you start?
Speaker 5 (16:21):
You start with a company that builds the blocks, and
in practice this box, they probably dressed it up to
look like a life changing, world altering protocol that's going
to replace all the big banks in thirty eight days
or whatever. Maybe for now, actually pretend it does literally
nothing is just a box.
Speaker 1 (16:40):
Sam went on with this box analogy. He suggested that
the primary function of this imaginary box was for users
to put their currency in it, for which they'd receive
an IOU, and then later they could use that IOU
to pull their cryptocurrency out of the box. As Sam
told it, the controllers of this box then produce a cryptotoken.
Speaker 5 (16:59):
We'll call it what for X token, and they're going
to give them a way for free to everyone uses
the box. So anyone who goes takes some money puts
in the box. Each day they're going to air drop
one percent of the X tokens program amongst everyone who's
put money in the box. That's for now, what X
token does. It gets given away to the box people.
(17:20):
And now what happens, Well, X token has some market cap,
let's say it's twenty million dollars market cap in the
world that we're in. If you do this, everyone's going
to be like, ooh, box token. Maybe it's cool. If
you buy a box token, you know that's going to
appear on Twitter and I'll have a twenty million dollar market.
Speaker 4 (17:35):
Cap it shouldn't have any market cap in Siri, but
practice sale always do.
Speaker 5 (17:40):
Okay, that's right, So X tokens being given out each day,
all these like cisticated firms are like, oh, that's interesting.
Like if the total amount of money in the box
is one hundred million dollars, then it's gonna yield sixteen
million dollars this year in X tokens being given out
for it. That's a sixteen percent return. That's pretty good.
We'll put a little bit more in and maybe that
(18:00):
happens until there are two hundred million dollars in the box.
So you know, sophisticated traders and or people on crypto
Twitter go and put two hundred million dollars in the
box collectively, and they start getting these X tokens for it, right,
and now all of a sudden, it's like wow, people
just decide to put two hundred million dollars in the box.
Speaker 4 (18:18):
This is a pretty.
Speaker 5 (18:19):
Cool box, right, Like this is a valuable box, as
demonstrated by all the money that people have apparently decided
should be in the box. And where we to say
that they're wrong about that? Like boxes can be great. Look,
I love box as much as the next guy, and
so then you know, X token price goes way up
and now it's at one hundred and thirty million dollars
(18:39):
market cap token because of you know, the bullishness of
people's usage of the box, and now all of a sudden,
of course, the smart money. It's like, go, wow, like
this thing's now yielding like sixty percent a year an
X tokens, right, so they pour another three hundred million
dollars in the box and you get a site, and
then it goes to infinity and then everyone makes money.
Speaker 1 (19:03):
The two journalists were a bit stunned by his explanation.
Speaker 13 (19:07):
I think of myself as like a fairly cynical person,
and yep, that was so much more cynical. Yes, I
would have described farming like you're just like, well, I'm
in the ponzi business and it's pretty good.
Speaker 4 (19:21):
And did any of this require any sort of like
economic cases. Just like other people put money in the box,
and so I'm going to too, and then it's more valuables.
They're going to put more money in. And at no
point in the cycle did it seem to like describe
any sort of like economic purpose.
Speaker 13 (19:35):
Can you comment on like the sustainability of that, yeah,
because like you know, on the one hand, you're like, well,
a trillion dollars in social money is going to come
into a bitground. On the other hand, you're like, basically,
there are a lot of ponzis that have done really well.
Speaker 5 (19:47):
Okay, cool, I'll say, on the cynical route, think about,
like cynically, what could happen here? Well, okay, so you've
got things. Box is kind of dumb, but like, what's
the endgame?
Speaker 12 (19:57):
Right?
Speaker 5 (19:57):
His boxes were zero?
Speaker 1 (19:58):
Obviously, Sam Bankman Freed inadvertently described the nature of much
of these cryptotokens. They're built out of nothing. Many of
the boxes or companies were worth zero.
Speaker 6 (20:14):
Again, Dumberg I firmly believe these are all totally unrestared,
wildcat banking ponzi schemes with nothing but thin air backing them.
Speaker 1 (20:23):
By Midsummer twenty twenty two, Sam Bankman Freed was bailing
out cryptocurrency firms left and right. The media dubbed him
the crypto world's lender of last resort, but his actions
were not benevolent. Many believed he was bailing out companies
because of fear the insolvency contagion could spread to his firm.
Sam even began hinting that there were more collapses to come.
(20:47):
In an interview with Forbes, Sam stated, quote, there are
some third tier exchanges that are already secretly insolvent end quote.
Little did anyone know that it was Sam that was
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Welcome back to Red Pilled America. So just as Sam
Bankman Freed looked like the bailout savior during the crypto winter,
(22:34):
what no one yet knew was Sam's companies were teetering
on the edge as well. His crypto trading firm, Alameda Research,
was nearing insolvency. He was no longer friends with cz
of rival Crypto Exchange Finance. Sam had nowhere to turn
but the mirror. But then something happened. In late September
twenty twenty two, one hundred and seventy three million FTT
(22:57):
cryptotokens materialized, and then they were miraculously given to Alameda Research.
At the time, the trading price for FTT tokens was
roughly twenty four dollars each. This fresh minting of FTT
tokens put four billion dollars on Alameda Research's balance sheet.
In one fell swoop, the supply of FTT tokens in
(23:19):
existence increased by a reported one hundred and twenty four percent.
Just like the Federal Reserves dollar printing press, these FTT
tokens were just created out of thin air. As anyone
with an elementary understanding of economics would know, the act
of just printing a currency from nothing could not immediately
(23:41):
add value to a company. The only institution that can
get away with that is the Federal Reserve. Where did
this value come from? How was it that these FTT
tokens were valued at twenty four dollars each?
Speaker 20 (23:53):
Again, Ben Armstrong, FTT was one of the ways that
SBF would pump up the net value of Alameda and FTX.
Speaker 9 (24:03):
They basically wash trade FTT back and forth between the
two companies.
Speaker 2 (24:07):
In other words, they gained the system on Wall Street
wash trading is an illegal way for traders to manipulate
the market. A buyer and seller, for sometimes one investor
acting as both the buyer and seller, illegally collude to
sell a particular stock between each other to mislead other
traders into believing that the trading volumes for the stock
(24:27):
are higher than they actually are. Their goal through this
wash trading is to trick others into trading the same
stock and in the process illegitimately increasing its price. To
wash trade in the crypto world, you just swap out
stocks for cryptotokens like FTT. The process that Sam allegedly
used to prop up the value of his companies was
(24:48):
not a new process. In finance. The scheme looks something
like this. First, you create a stock, in this case,
a cryptotoken, and you retain the majority of those tokens
in your possession. Then you pump up the price of
those tokens through wash trading, or buying them with customer assets,
or through creating propaganda campaigns, whatever you need to do
(25:11):
to drive up the price of the token, and in
a largely unregulated industry like crypto, it wouldn't be that hard. Now,
since you've retained the majority of the tokens. Someone with
a huge batch of said tokens can't lower the price
of them by selling them on the market at a
rock bottom price. Now, with this artificially high value token
(25:31):
on your balance sheet, your company looks like it's worth
a ton of money. So you can go to the
banks asking for loans with the tokens as collateral, or
you can go to investors asking for investments, because hey,
look at my balance sheet, I've got millions upon millions
of dollars. The banks and investors want in because they
don't want to miss out on the chance to make
easy money. They give you real dollars, not cryptotokens, and
(25:55):
now you can use that money to go on a
wild spending spree, like buying the naming rights to stadiums
or locking arms with the biggest supermarket in the world.
The only thing you have to do is keep your
token price high, so the banks keep lending you money
and investors keep buying into your business. But the problem
now is the people that hold your token in the
public want to take advantage of the high prices, and
(26:18):
they sell your token in the market. If enough people
do that, flooding the market would supply. When there was
no real increase in demand, then the token price drops,
as does the value of your company, making it harder
for you to get loans or attract investors. So now
you have to continue the process all over again, pump
up the price of the token through wastch trading, or
(26:39):
using customer assets to buy the tokens at a higher price,
or any other scheme, whatever it takes to raise the
token price. Eventually you run out of money. That's when
you come up with an idea. If you control the token,
you can just print up more of them and place
them in your account to make your company look more
valuable on paper. You basically create cryptotokens out of thin airers.
(27:03):
That that is what Sam bankmin Freed did in this
moment of crisis at the end of September twenty twenty two.
Speaker 20 (27:22):
Again Ben Armstrong, so you just have a long history
of Sam creating money out of nothing, and even there's
a video where he explains how he does it.
Speaker 9 (27:31):
And when they needed more money, they would just print
more FTT and then they would be able to immediately
add value to their balance sheets.
Speaker 2 (27:40):
By late October twenty twenty two, Sam must have felt
like he'd stabilize the businesses because he became a little
bit cocky. At the time, Finance ftx's primary competitor was
apparently in some legal trouble, so Sam decided to sucker
punch Finance's owner CZ. He jumped online and tagged his
(28:01):
old front of me in a tweet suggesting that CZ
wasn't even allowed to go to Washington, d C. Because
of his legal issues. The public potshop must have burned
CZ up. The stage was set for an epic chess move.
In a stunning coincidence, just a few days after Sam
sucker punch CZ, Alameda Research's balance sheet leaked to the press.
(28:23):
Crypton New's outfit Coindesk was the first to publish a
report on it, claiming that Alameda Research had fourteen point
six billion dollars in assets. But here's the kicker. That
value was almost entirely derived from FTT tokens. In other words,
it was Sam Bankman's breed's own token that was propping
up his company, not real US dollars, gold or some
(28:46):
other universally recognized asset, not even bitcoin. The coin desk
report got the ball rolling, but it was someone else
that Dug Deeper, an investigative journalist that goes by the
moniker Dirty Bubble Media, also received the leaked Alameda balance
sheet and he expanded on the coindesk original report.
Speaker 12 (29:05):
Two days later, I published an article.
Speaker 2 (29:07):
That's Dirty Bubble Media.
Speaker 12 (29:09):
That basically took that information, plus the information I saw
in their balance sheet, the actual copy of it, and
basically broke it down in a way that people can
understand it to explain why it was as bad as
it was. Essentially, they were using worthless assets as collateral
for loans and that they were insolvent in very real terms.
Speaker 2 (29:30):
The news of his article spread quickly within the crypto
communities on Twitter and YouTube.
Speaker 7 (29:35):
Newses came out that FTS is actually insolvent, and Dirty
Bubble Media actually went ahead and did a lot of
digging up.
Speaker 2 (29:42):
All The reporting sparked an idea in CZ's mind. Again,
Ben Armstrong.
Speaker 9 (29:47):
So bini Itz and FTX obviously had beef with one
another at that point, but it goes back much further.
When you really look at CZ verse Sam. For about
six months, there was a deterioration of that relationship. Is
I believe CZ found out more and more about what
Sam was doing.
Speaker 2 (30:03):
Caught wind that Sam was trying to monopolize the crypto
industry by influencing federal regulations. This didn't sit well with CZ.
He no doubt felt that it was a direct attack
on his company finance.
Speaker 9 (30:14):
And then at some point he found something out that
was like, Okay, now I can't look back, I can't
turn away. At this point, I got to slam down
on this and do something. That's what he did. He
announced he was doing it, and he did.
Speaker 2 (30:26):
It, and CZ had just the right thing to take
out Sam. Remember those FTT tokens that Sam gave CZ
when he bought out Caz's share in FTX. Well, CZ
held onto those FTT tokens and a little over a
year later those tokens transformed into digital scud missiles on
Sam's business. If CAZ decided to flood the market with them,
(30:54):
the price of FTT tokens would plummet, bringing Sam Bankman
Freed's entire scheme to an end. You see, Sam's company
were holding the majority of FTT tokens. The company's enormous
value was derived from them, so Sam needed the FTT
token price to stay high so that he could continue
to raise money based on their high value. If the
(31:16):
price fell, so would Sam's house of cards. CC must
have seen the opening and he decided to take the
shot again. Dirty Bubble Media.
Speaker 12 (31:27):
The head of the Finance Exchange, which is the largest
exchange in the world and previously an investor in FTX,
announced that they were going to be selling some six
hundred million dollars worth of this token that FTX had
created out of thin air and was using a collateral.
Basically put them between a rock and a hard place.
So that, combined with the resulting panic sparked by my
(31:48):
reporting other reporting kind of led to withdrawal cascade.
Speaker 2 (31:52):
In other words, there was a run on Sam's bank.
Fearing the FTX and Alameda Research were both insolvent, people
began withdrawing their funds from FTX.
Speaker 7 (32:02):
Unfortunately, I have some bad news to report currently, a
bank run is happening on FTX. Its reserves, specifically, Etherium
is being drained off by the hundreds of millions right now.
Speaker 2 (32:16):
Sam took to Twitter to try and calm the market.
Speaker 15 (32:19):
Over the weekend, speculation rose about the solvency of FTX.
This came after a coined Ask report revealed Alimedd Research's
balance sheet is full of ftx's native token FTT so
FTX CEO Sam bankman Free took to Twitter this morning
to clear something up. He said that a competitor is
trying to attack the company with rumors. He then says
(32:40):
in the same tweet, ftx's fine assets are fine.
Speaker 2 (32:45):
Alimeter Research to CEO Caroline Ellison tried to calm the
storm as well, tweeting the Alameda had assets not included
in the leaked balance sheet. To keep the FTT token
price from falling, she publicly offered to buy CZ's tokens
at the then market rate of twenty two dollars each
to keep him from putting in up for sale on
the open market. Cz turned her down. He must have
(33:07):
smelled blood. Cz then proceeded to flood the market with
the FTT tokens he possessed, and the price of ftx's
crypto coin plummeted. In just two days, FTT went from
twenty two dollars a token to just five dollars and
(33:30):
fifty cents a token. A day later, it dropped another
sixty percent. Sam desperately tried to raise over a billion
dollars from Silicon Valley, but no one bit, so Sam
took drastic action.
Speaker 7 (33:43):
Breaking news. It appears that FTX has stocked with draws
for to pass basically four hours the jig was up.
Speaker 14 (33:51):
And some people saying that if they log into FTX,
they have a bounce of zero.
Speaker 12 (33:56):
Now FTX, the Big exchange, has filed for Chapter eleven bankruptcy.
I'm trying to understand exactly how a company, the second
largest crypto exchange in the world, has become.
Speaker 4 (34:08):
Insolvent and followed for bankruptcy in the space of a week.
Speaker 21 (34:11):
The company's controversial chief executive, Sam Bankman Freed, resigning a
CEO and will remain to assist in an orderly transition.
Speaker 2 (34:19):
Sam Bankman Freed was eventually arrested. In addition to the
federal indictments of wirefraud and a list of other charges.
News began to surface it Sam was not necessarily the
effective altruis that he claimed to be.
Speaker 1 (34:31):
The company FTX. Sam Bankmint Freed, himself and his.
Speaker 4 (34:35):
Parents all owned around three hundred million dollars worth of
luxury or real estate out in the Bahamas.
Speaker 20 (34:42):
Well, here's the thing.
Speaker 18 (34:43):
If you're running any kind of currency operation and you're
involved in a polyamorous relationship with seven other people.
Speaker 1 (34:51):
I gotta thank you whack ten ten other people totally.
Speaker 2 (34:54):
What do they do?
Speaker 20 (34:54):
They just were polyamorous living in a house together.
Speaker 1 (34:56):
I'll live together in the same place in the Bahamas.
Speaker 2 (34:58):
And then I'll just bang each other SBF, just thirty
two years old, was sentenced to twenty five years in
prison and ordered to pay eleven billion for its fraudulent schemes.
Sam Bankman freed with the darling of the crypto industry,
considered the man with the master plan for crypto, yet
his company joined the graveyard of crypto companies that fell
(35:20):
during the crypto winter. The turn of events started to
make people wonder where does crypto go from here.
Speaker 1 (35:28):
The dilemma for the cryptocurrency industry is that after more
than a decade, no one has derived a commercial use
for crypto. It hasn't become a form of digital cash
to make purchases, and it's too volatile to be a
digital asset like gold and silver. Crypto technology, especially bitcoin
in the blockchain, was touted as being the technology that
(35:49):
would allow people to bypass the central bank. It was
initially promoted as internet cash used to buy and sell products,
but when experts in the field are asked when will
that happen? Has stubbornly remained the same.
Speaker 11 (36:05):
Are we going to actually see more payment services carried out,
more customers, consumers using things like for example, Bitcoin re event, dogecoin,
if you're Tesla to actually make purchases. Is this the
year and where that actually happens?
Speaker 9 (36:19):
Well, I think that We're going to have to just
see about And the reason I'd say that is I
think people want dollars.
Speaker 4 (36:28):
I think they want to make payments and dollars.
Speaker 9 (36:30):
Well, bitcoin's been around ten years, twelve.
Speaker 1 (36:32):
Years, that's Peter Schiff, famed CEO and chief Global strategist
of Europacific Capital Incorporated. Peter is perhaps the world's leading
critic of bitcoin and thinks the cryptocurrency industry is the
biggest Ponzi scheme of his life. He argues that bitcoin
is no longer in its infancy and yet still hasn't
found a use case.
Speaker 9 (36:53):
It's never evolved beyond a speculative token in the first
twelve years, so why shouldn't the next be any different?
Speaker 1 (36:59):
Dirty Bubble media is skeptical as well.
Speaker 12 (37:02):
Is there any use case for I don't know, I
haven't yet come across a project that seems to actually
be generating positive cash flow and generating something of economic value.
I haven't encountered that yet. So and the thing is,
if this technology was so useful, why isn't Google using
it right? Why isn't Amazon using it? Why isn't Facebook
using it?
Speaker 1 (37:21):
There's a real split amongst cryptocurrency enthusiasts. Many believe the
other new tokens are just fraudulent, get rich quick schemes,
while Bitcoin is the real deal, the one digital currency
that can free citizens of the world from the disastrous
policies of central banks. And there is an argument that
Bitcoin is different than these other tokens. It does appear
(37:42):
that it launched organically, the public couldn't game that system.
It's also decentralized, no one controls it, and bitcoin is
by far the most adopted cryptocurrency of them all. Does
the fact that so many people believe in it give
it some kind of network effect? Or people use it
because so many people use it? I asked Stumberg if
there was any legitimate quality to bitcoin or was it
(38:05):
just a massive Ponzi scheme?
Speaker 3 (38:07):
I would say both.
Speaker 6 (38:09):
So to the first part of your comment, there is
undoubtedly a network effect for the creation of value, and
a quintessential example of that is gold. I mean, gold
is a inert metal that has some interesting chemical properties,
but collectively, over five thousand years, people have decided that
(38:29):
gold is a valuable asset worth owning. And since enough
people have decided that, and enough examples in history of
hyperinflating fiat currencies have proven that those who at the
early stages of a hyperinflationary environment were shrewd enough to
get their hands on as much gold as they could
did very well.
Speaker 1 (38:57):
But in Dumberg's assessment, the jury was still out on
bitcoin reaching the status of a digital pressures medal.
Speaker 6 (39:03):
The Bitcoin network the people who believe in it is
not nearly as big as gold, and it has not
had as enough validation events as a sort of store
of value as an emergent phenomenon as gold has had.
But it's possible. I could say, like, if you ask
me which of the cryptos I had to put a
certain amount of money in, I would select the Climb.
And again, mostly because of the regulatory clarity with which
(39:26):
a US citizen who wishes to remain within the bounds
of the laws can own transact and participate in the
bitcoin world. There is no central party that controls it
that that would be the one exception to sort of
the whole crypto universe.
Speaker 1 (39:39):
Dooomberg believes that if any cryptocurrency survives the crypto crash
of twenty twenty two, it will likely be Bitcoin and
the technology built around it.
Speaker 6 (39:48):
Much like when we had the dot com boom, where
basically all manner of startups rush to put dot com
and their name, and most of them are vs. And
then when the dot com bubble first, I mean, people
forget how violent that was and how many people lost
all of their life savings and their investments. And yet
from that rubble came Microsoft and Amazon, Apple and the
(40:09):
survivors of the catastrophe of the dot com bubble bursting.
It's seductive to imagine that we're about to see the
same thing, Like there's very interesting things going on in
the crypt universe. Not everybody tried to create a ponzi
token out of it. There will be technologies that survived
this crash. There will be entities that survived this crush,
Bitcoin among them. I mean a bigcointwor's going to keep running.
(40:30):
Whether a bitcoin costs you quote seventeen thousand US dollars
today or four hundred dollars a year from now. The
bitcoin network is going to keep running.
Speaker 1 (40:39):
But Doomberg has a rather dark view of what will
happen with the blockchain technologies that survived this crash.
Speaker 6 (40:45):
The technologies that survived this flush and are ultimately taken
over by the government to impose central bank digital currencies
on the world, which we think is a great plagu
on personal freedom. The owners of that technology will be
handsomely compensated.
Speaker 1 (41:01):
Central bank digital currency are basically the government's version of bitcoin.
Think of it as a federal digital coin issued by
the Federal Reserve.
Speaker 6 (41:10):
Central banking digital currencies. For those that aren't familiar, it's
essentially the elimination of physical cash and the elimination of
the Fourth Amendment. And the government can basically see and
control how you spend your money, and so they could
just decide that the only legally accepted currency the United
States is you know, FED coined, and you're not allowed
to buy guns with a FED coin, for example. Are
(41:32):
you're only allowed to buy so many gawns of gasoline
in a week because your carbon footprint has been exceeded,
or you can only buy so many baggs of chips
and sodas with sugar in them, because you know, buy
and large. Healthcare has become nationalized, and you're being an
undue burden to society by living in the way that
you could do. And so it's a very very small
step from a central panking digital currency to what we
(41:52):
have called in a piece we wrote last year called
Dystopia coin, where you cannot hide from the you know,
the eye of Soren, and the government shall see everything
that you do. There's no tipping with cash, know, giving
a few hundred dollars to a friend that you don't
report to the irs. All the way in which most
Americans express their freedom will be removed in such regard
(42:13):
and our fear in our base case and ultimately, you know,
our objectives to trying to analyze the situation unemotionally is
that the technologies that prove to be useful in the
crypto cycle that we've just gone through will be hijacked
and leveraged by central bankers around the world and they're
never rinning thirst for more control over the populace. And
that's coming. But the technology is developed in the cycle
(42:35):
agreed that we've gone through will undoubtedly be sifted through
and hijacked by the world central bankers and their desire
to eliminate cash and by extension, to eliminate privacy and
by extension, to eliminate private property ownership, which is, by extension,
the elimination of freedom, and of that we are significantly concerned.
Speaker 1 (42:52):
Ben Armstrong agrees that central banking digital currencies or CBDCs
are coming.
Speaker 9 (42:57):
Yeah, it's inevitable. There's no doubt about it's inevitable. It
can be stopped. Digital dollars already out, guys. It's called USDC.
Circle is behind it, Coinbase is behind it.
Speaker 1 (43:09):
Jerome Palak, the chairman of the Federal Reserve.
Speaker 9 (43:11):
Back in twenty twenty, said, we're open to the private
sector helping us to create the digital dollar. It's already
been created. They're already working as well with the European
Union on creating the digital euro. I believe we're three
to four years away from digital dollar coming out, and
I think there's no there's no way to find it,
to be honest with you, one thing we want to
turn our attention to very soon is we want to
(43:32):
outlaw the use of a social credit score in combination
with your money, in combination with a digital dollar. So
what we really need to do is figure out ways
to make that digital dollar safer and to protect ourselves
in the future from great reset from the elites, from
you know, whatever you want to call them, the overlords,
whatever you want to call them. You know, we want
(43:54):
to do our best to protect those through legislation and
just accept the fact that it's coming.
Speaker 1 (43:59):
Doomberg agrees that the American public needs to protect itself
from the inevitable adoption of a digital dollar.
Speaker 6 (44:05):
We in the West, who grew up with in cherishire
privacy in our freedom, desperately need a modernized version of
the Bill of Rights, and I would say a digital
Bill of rights. I think that there still exists within
the Western world a thread of freedom loving citizens who
have an appropriate lack of trust in centralized authority, and
(44:27):
pushed hard enough, will demand a new digital Bill of rights.
Donald Trump can't freeze my bank accounts without some due process,
or Joe Biden can't freeze my bank accounts without due process.
And for a politician to be able to inspect my
transactions without any suspicion of wrongdoing should be illegal, and
we should codify this. And perhaps the fear of totally
(44:49):
losing your rights and freedoms might provoke an appropriate political
response that leads us to a place where we can
incorporate the benefits of these technologies.
Speaker 1 (45:05):
Which leads us back to the question where is crypto going?
It appears that the crypto world is developing technologies that
could one day lead to the end of the paper
dollar and the establishment of a central banking digital currency,
and this could be an extraordinary challenge to American freedom.
(45:28):
When we started our inquiry into the world of crypto
in twenty nineteen, we asked the question is bitcoin dangerous
to America? What sparked our interest in that subject was
a statement earlier that year by then President.
Speaker 17 (45:40):
Trump, a crypto is being talked about. The President actually
weighed in and tweeted about cryptocurrencies last night. He wrote,
in part this, I'm not a fan of bitcoin and
other cryptocurrencies, which are not money and whose value is
highly volatile based on thin air. He writes, unregulated crypto
assets can facilitate unlawful behavior, including drug trade and other
illegal activity.
Speaker 1 (46:00):
Rights the president to make this argument, Trump administration and
other politicians claimed that cryptocurrencies were completely anonymous and therefore
would facilitate massive illegal activity. But when we dug into
this claim, we found the argument was flawed. It was
actually the technology underpinning bitcoin, the blockchain, that allowed criminals
(46:21):
to be tracked down. So we concluded that bitcoin was
not necessarily something Americans should fear. But did we get
it wrong? Well, I think it's fair to say that
Donald Trump thinks he got it wrong.
Speaker 12 (46:33):
The crypto collapse does not appeared to be worrying one
major celebrity.
Speaker 14 (46:38):
Former US President Donald Trump, has officially entered the cryptosphere.
Speaker 1 (46:41):
Trump used a cryptocurrency to launch a digital trading card. Ultimately,
technology like bitcoin is just a tool, like Twitter, or
Facebook or a gun. What makes any tool dangerous is
the user operating it. Paper cash is used by lemonade
stand operators and the Mexican cartel. If the experts are right,
an a central bank digital currency is inevitable that Americans
(47:04):
need to demand a digital bill of rights, one that
prohibits a tyrannical government from using a cryptocurrency to dictate
our behavior. And for those of you that think a
federal crypto dollar is a thing in the far off future.
Perhaps you should reconsider your timeline.
Speaker 18 (47:21):
So you might have missed what happened Wednesday afternoon at
the FED. They started their central bank digital currency, so
they rolled it out and it's in its beta test now.
Speaker 2 (47:36):
Red Pilled America is an iHeartRadio original podcast. It's owned
and produced by Patrick Carrelci and me Adriana Cortez of
Informed Ventures. Now. You can get ad free access to
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To subscribe, visit Redpilled America dot com and click join
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(47:57):
click join in the topmenu. Thanks for listening.
This is Red Pilled America.
Speaker 2 (00:06):
Before we start the show, just a reminder to share, like,
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(00:28):
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Pilled America dot com and click support or shop in
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a time.
Speaker 1 (00:39):
Previously on Red Pilled America.
Speaker 2 (00:40):
By late twenty eighteen, Alimed Research was already in trouble.
Speaker 3 (00:46):
I mean, the company didn't have any lawyer, so I
think my utility there was pretty obvious.
Speaker 1 (00:51):
Hundreds of unscrupulous characters began creating their own cryptocurrencies.
Speaker 4 (00:56):
And the currency that you would use would be these munchies.
Speaker 3 (00:59):
You know, it's so outland as that I'm tempted to
accuse you of just making that up.
Speaker 5 (01:04):
We also recently launched a derivatives exchange called FTX.
Speaker 1 (01:07):
Sam called his new cryptocurrency FTT.
Speaker 2 (01:11):
By the end of twenty nineteen, CZ became one of
the first major investors in FTX.
Speaker 6 (01:16):
They were treating this guy like it us a guru.
Speaker 7 (01:18):
How did you do this so quickly?
Speaker 2 (01:19):
FTX raked in an industry record nine hundred million dollars.
Speaker 1 (01:26):
I'm Patrick Carrelci.
Speaker 2 (01:28):
And I'm Adriana Cortez.
Speaker 1 (01:29):
And this is Red Pilled America, a storytelling show.
Speaker 2 (01:34):
This is not another talk show covering the day's news.
We are all about telling stories.
Speaker 1 (01:39):
Stories. Hollywood doesn't want you to hear stories.
Speaker 2 (01:42):
The media marks stories about everyday Americans at the Globalist ignore.
Speaker 1 (01:48):
You could think of Red Pilled America as audio documentaries,
and we've promised only one thing, the truth. Welcome to
Red Pilled America. We're at the third and final part
(02:12):
of our series of episodes entitled Crypto Revisited. If you
haven't heard the previous episodes, you should go back and
listen from the beginning. We're looking for the answer to
the question where is cryptocurrency going? By telling the story
of the astonishing rise and spectacular fall of crypto entrepreneur
Sam Bankman Freed.
Speaker 2 (02:30):
So to pick up where we left off at the
close of twenty twenty one, Sam Bankman Freed was in
the midst of a power move. The young crypto entrepreneur
had some leverage. He'd just come off an industry record
nine hundred million dollar fundraising tour for his cryptocurrency exchange
FTX and hiss Pitcoin was peaking at nearly seventy thousand
(02:52):
dollars per coin. The price of Sam's FTT token rose
along with it. Sam was climbing to the top of
the crypto world, and his political donations were beginning to
pay off as well.
Speaker 5 (03:04):
Thank you Chairwater, as ranking Member mckenry, and all the
members of the committee for having me here today to testify.
It's an honor to be here.
Speaker 2 (03:13):
He spoke at a congressional hearing on the need for
crypto regulations.
Speaker 5 (03:16):
I think it is important and I think that is
healthy that the industry will be regulated.
Speaker 2 (03:23):
Sam appeared to have something up his sleep, and he
had a trusted sidekick to help him all along the way.
Speaker 3 (03:29):
I think we've always enjoyed working together and thinking together,
at least I like to think.
Speaker 7 (03:34):
So.
Speaker 2 (03:35):
That's Sam's father, Joe Bankman, talking about working with his son. Joe,
a Stanford law professor began helping his son early in
his crypto ventures. Joe would eventually focus on two specific areas.
The first was ftx's charity endeavors.
Speaker 3 (03:50):
That's about half of what I do, and the other
half of what.
Speaker 8 (03:53):
I do is regulation broadly speaking, so it's the bills
moving through Congress, it's whether we'll get approval from a
regulatory agency, things like that.
Speaker 2 (04:05):
Joe Bankman was a lawyer, so the formulation of regulations
aligned well with his expertise.
Speaker 3 (04:10):
In fact, all regulatory changes anytime you work through the government,
that's really legally in KENSIB.
Speaker 2 (04:17):
Regulations also played a pivotal role in the world of finance.
In effect, they act as the gatekeeper of who does
and does not get to enter the playing field. So
how regulations are crafted can mean life or death for
a company. By the close of twenty twenty one, it
appeared that Sam and his father had a plan in motion.
(04:39):
It looked as if they were trying to set up
a regulatory framework that would benefit Sam's array of crypto
companies while hurting his competition.
Speaker 9 (04:46):
They wanted to create a monopoly, there's no question about it,
to match finance that's been.
Speaker 2 (04:50):
Armstrong crypto enthusiast and creator of bitboycrypto dot com.
Speaker 9 (04:54):
So here was the plan. We'll bring in all of
these other companies to cover lending, to cover defive, to
cover exchanges, to cover deriva trading, margin trading. They wanted
to bring kind of one company in that did everything
from every niche in the crypto world, bring them up
under FTX. Then they were going to create the Federal
BIL license.
Speaker 2 (05:15):
Basically a proposed federal license to operate in the US
crypto industry, and.
Speaker 9 (05:19):
They were going to be the only show in town
that had the license, and all their companies would get
the license. Due to being under their umbrella, they did
have such a head start on anybody else trying to
apply to get the license that they would just be
able to win from the ground up. So that was
kind of the plan.
Speaker 2 (05:34):
But in order to have real influence over the parameters
of that license, Sam would need to position himself as
the authoritative voice of the crypto world, so he launched
one of the most audacious branding campaigns that the world
of finance had ever seen. Sam had already signed Tom
Brady and Giselle as FTX folkspersons. He then expanded into
(05:56):
the NBA.
Speaker 10 (05:57):
Crypto exchange FTX, spending one hundred and thirty five million
to rename the home of the Miami Heat.
Speaker 11 (06:03):
This is the first time a crypto firm has won
naming rights to a major US sports venue.
Speaker 2 (06:08):
FTX would eventually sign a deal with Steph Curry and
Shaquille O'Neal. He infiltrated Super Bowl fifty six with an
ad featuring comedian Larry David. Like I was saying, it's FTX,
it's a safe and easy way to get into crypto,
I don't think so. Sam carpet bombed young entrepreneurs with
YouTube influencer endorsements.
Speaker 12 (06:27):
Now, before we get to part two, I have to
give a quick shout out for today's sponsor.
Speaker 13 (06:30):
It's FTX US.
Speaker 4 (06:31):
You've probably heard of them before.
Speaker 6 (06:32):
One of the largest US regulated cryptocurrency exchanges in the world,
trusted by millions of users to buy, solid track and
trade both crypto and NFTs.
Speaker 14 (06:41):
They've been the ones that are going out investing in
and buying other crypto exchanges that are struggling.
Speaker 6 (06:47):
I'll explain just a moment. Right after I mentioned that
if you want to take advantage of buying the crypto
dipp check out our sponsor today FTX.
Speaker 2 (06:53):
Sam also wanted to win over traditional finance who'd been
a bit skeptical about crypto. Investor Kevin O'Leary initially had
a negative impression of the crypto industry, but a long
came Sam bankman Fried, who lathered the Shark Tank star
with greenbacks, and Kevin remarkably did a one to eighty
on the subject for the entire finance community to see.
Speaker 15 (07:13):
I don't know where you are in crypto.
Speaker 14 (07:15):
You were so negative for a while, then you got
totally positive.
Speaker 16 (07:18):
Do you own bitcoin now, Kevin?
Speaker 17 (07:20):
What's your posision at crypto right now?
Speaker 18 (07:22):
You do?
Speaker 14 (07:22):
I have millions of dollars. Twenty percent of my portfolio
is now in crypto currencies and blockchain. Well, you have
to be diversified. I own thirty two different positions, including
equity and FTX, and I have to disclose I'm a
paid spokesperson for that company.
Speaker 2 (07:36):
And Sam pulled in his new spokesmodel, Giselle, to reach
into the world of luxury.
Speaker 4 (07:41):
Today, we're going to.
Speaker 10 (07:42):
Be discussing Giselle and Sam's shared mission philanthropy, which is
the theme of our spring summer twenty twenty two luxury campaign.
Speaker 2 (07:52):
The FTX founder joined Jizelle in a print out that
was published in America's most prestigious magazines, including Vogue, Dandy, Fair, GQ,
and The New Yorker. The two took the stage at
the Bahamas Cryptoconference to announce the campaign.
Speaker 4 (08:06):
And I think it's really important to think about what
are we leaving behind, because either we're going to be
part of the solution or were going to be part
of the problem.
Speaker 5 (08:13):
I think when you start thinking about the trillions of
people who haven't been worn yet who are going to
inherit this or from us, the things that we do
that sort of impact what it is exactly that we're
passing down to them are just incredibly important and magnified
way beyond the scope of almost anything else that we do.
Speaker 2 (08:29):
Sam was attracting some of the most gifted virtue signalers
on the planet. Former President Clinton, popstar Katy Perry, and
former Prime Minister Tony Blair all attended his event. He
amped up his effective altruism message and the media sopped
it up.
Speaker 16 (08:45):
Crypto billionaire Sam bankman Fred is doubling down on his
embrace of effective altruism This is something that he's talked
about so much that he's really in crypto so that
he can give the money away, essentially finding an avenue
where you can make the most money to give away
the most.
Speaker 4 (09:01):
He's fully committed a giveving millions and now billions of
dollars to charities again.
Speaker 2 (09:07):
Ben Armstrong of bitboycrypto dot com.
Speaker 9 (09:10):
Alameda has the greatest propaganda arm we've seen since the USSR.
They use a combination of paid engagement bots, paid influencers,
paid spokespeople, paid media in order to control a narrative.
Speaker 2 (09:23):
The FTX branding effort may have looked as if it
was intended for the general public, but that was a
peripheral benefit. Its ultimate target was really a very small
audience in Washington, DC that included the SEC chairman Gary Gensler.
Speaker 1 (09:38):
In March twenty twenty two, Sam reportedly met with Gensler
to discuss regulations on crypto exchanges like FTX, and Sam
had an inside track with Gensler. The CEO of Alameda Research,
Caroline Ellison, was the daughter of Gensler's old boss when
he worked at MIT. Sam's plan appeared to be falling
into place. What the problem was that a crypto winter
(10:00):
was brewing, and Sam appeared completely oblivious to the coming storm.
Speaker 6 (10:06):
When you've become successful and you buy your own media
and you surround yourself with people who only tell you
that what you're reading on the cover of Forbes is
actually a reality, you begin to believe it.
Speaker 1 (10:16):
That's a representative from Doomberg, one of the most widely
read finance newsletters on subscription based platform Substack.
Speaker 6 (10:23):
Sam Bankmyfree spent a lot of money to buy great press.
When you read it, it's easy to forget that you
paid for it and it's not real. And then anybody
who points out to you that, hey, maybe we have
these religious here and yes, I understand this is part
of your pr strategy, but we should consider AB and
C gets eliminated from your inner circle. And the only
people who remain in your inner circle are people who
(10:45):
are willing to lie to you about how great you are.
So then you come very insulated.
Speaker 1 (10:49):
This was undoubtedly sam situation, and because of it, he
thought he'd built a rock of Gibraltar, but he was
about to figure out that he'd really erected a house
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come alive. Welcome back to red pilled America. So as
Sam Bankman Freed was soaking in the adoration of his
charm offensive, a cryptostorm was brewing. The early signs began
(12:43):
to surface right around the time Sam testified before Congress
in December twenty twenty one. The signal was, of course,
the original cryptocurrency.
Speaker 13 (12:52):
Bitcoin is having a December to forget. Along with the
other major cryptos.
Speaker 16 (12:56):
Bitcoin is hovering just below the fifty thousand dollars level
heading into the new year. That's after hitting seven eight
thousand just last month.
Speaker 1 (13:04):
As the new year got underway, the decline continued.
Speaker 16 (13:07):
Bitcoin now trading below that thirty seven thousand dollars handle,
hitting a one month low.
Speaker 1 (13:14):
At first, people choked up the dip to just the
volatility of the crypto market, but by early May twenty
twenty two, the cracks and the dam burst open, and
many of the companies propped up by the crypto bubble
began to pop.
Speaker 16 (13:26):
Crypto obviously right now getting crushed.
Speaker 10 (13:29):
Tonight, a massive selloff of cryptocurrency, erasing more than two
hundred billion dollars from the entire market in a single day,
the price of bitcoin plunging to its lowest level in
sixteen months.
Speaker 19 (13:41):
Gone down to its slowest point for quite a while.
And that's something that doesn't usually do. Actually going down
to a low pass the year before has only ever
happened once before. This is quite a big deal. More
than three hundred billion dollars was wiped out just in
the last week.
Speaker 20 (13:57):
What has happened?
Speaker 18 (13:58):
What's gone wrong?
Speaker 16 (13:59):
I mean, this is the definition of a black swan event.
Speaker 18 (14:01):
This is the Lehman Brothers coll of crypto.
Speaker 10 (14:03):
The numbers sending some investors spiraling, fearing they could lose
it all.
Speaker 9 (14:08):
One minute, it looks like the market's going to rip.
Speaker 21 (14:10):
The next minute, it looks like the market's going to dip.
Speaker 16 (14:12):
And I don't know what in the world's going on.
Speaker 20 (14:14):
So I'm out, no moss in totally.
Speaker 2 (14:16):
It seems crazy to say, but I'm then around thirty
five thousand dollars.
Speaker 4 (14:20):
I actually lost over half my portfolio.
Speaker 3 (14:22):
I lost one point six million on Luna and then
I put it in another too.
Speaker 10 (14:25):
D can at those trading platform Coinbase now warning that
if they go belly up, customers could lose all their
crypto investments, which aren't technically subject to bankruptcy protections.
Speaker 16 (14:36):
And if you're a retail investor, get you're not protected,
right or does it depend on jurisdiction, You're.
Speaker 19 (14:42):
Not protected pretty much anyway, there's no protections at all.
Just like with the rest of crypts, any money you
put in is entirely at your risk.
Speaker 21 (14:48):
Probably with bitcoin, there's something I underpinning. There's no government,
there's no company, there is no rent, there's something to
actually kind of prop up the value of cryptocurrency. Stories
out of New York of people losing half million dollar fortunes, cars, homes,
literally the whole lot because they punt it on this stuff.
I said, when everyone's everyone's happy. As soon as that
turns around, it can really hurt.
Speaker 5 (15:06):
You may think it sound like a Ponzi scape.
Speaker 6 (15:08):
What we have seen is nothing short of carnage.
Speaker 16 (15:10):
It's quite horrible to watch.
Speaker 12 (15:12):
This event is probably the most destructive wealth event in
the history of crypto.
Speaker 1 (15:18):
By the summer of twenty twenty two, company after company
that either created their own cryptocurrency or had most of
their holdings in some new crypto tooken came crashing down.
How could this have happened? How could an industry that
had been heralded by financial media been celebrated as the
next big thing come crashing down in a matter of days. Well,
(15:43):
a lot of it had to do with those new
types of cryptocurrency tokens entering the market. Remember when Sam's father,
Joe Bankman, learned about initial coin offerings or icos.
Speaker 18 (15:53):
Now, in my own personal opinion, the large majority of
these icos are frauds or they're going to fail.
Speaker 13 (15:59):
I'll totally agree with that.
Speaker 1 (16:00):
By the way, Well, it turns out that by twenty
twenty two, the industry had become littered with these fraud
coins as the crypto winter was slowly building. Sam went
on a Bloomberg podcast and used an analogy to explain
how many of these cryptotokens come into existence.
Speaker 4 (16:20):
Where'd you start?
Speaker 5 (16:21):
You start with a company that builds the blocks, and
in practice this box, they probably dressed it up to
look like a life changing, world altering protocol that's going
to replace all the big banks in thirty eight days
or whatever. Maybe for now, actually pretend it does literally
nothing is just a box.
Speaker 1 (16:40):
Sam went on with this box analogy. He suggested that
the primary function of this imaginary box was for users
to put their currency in it, for which they'd receive
an IOU, and then later they could use that IOU
to pull their cryptocurrency out of the box. As Sam
told it, the controllers of this box then produce a cryptotoken.
Speaker 5 (16:59):
We'll call it what for X token, and they're going
to give them a way for free to everyone uses
the box. So anyone who goes takes some money puts
in the box. Each day they're going to air drop
one percent of the X tokens program amongst everyone who's
put money in the box. That's for now, what X
token does. It gets given away to the box people.
(17:20):
And now what happens, Well, X token has some market cap,
let's say it's twenty million dollars market cap in the
world that we're in. If you do this, everyone's going
to be like, ooh, box token. Maybe it's cool. If
you buy a box token, you know that's going to
appear on Twitter and I'll have a twenty million dollar market.
Speaker 4 (17:35):
Cap it shouldn't have any market cap in Siri, but
practice sale always do.
Speaker 5 (17:40):
Okay, that's right, So X tokens being given out each day,
all these like cisticated firms are like, oh, that's interesting.
Like if the total amount of money in the box
is one hundred million dollars, then it's gonna yield sixteen
million dollars this year in X tokens being given out
for it. That's a sixteen percent return. That's pretty good.
We'll put a little bit more in and maybe that
(18:00):
happens until there are two hundred million dollars in the box.
So you know, sophisticated traders and or people on crypto
Twitter go and put two hundred million dollars in the
box collectively, and they start getting these X tokens for it, right,
and now all of a sudden, it's like wow, people
just decide to put two hundred million dollars in the box.
Speaker 4 (18:18):
This is a pretty.
Speaker 5 (18:19):
Cool box, right, Like this is a valuable box, as
demonstrated by all the money that people have apparently decided
should be in the box. And where we to say
that they're wrong about that? Like boxes can be great. Look,
I love box as much as the next guy, and
so then you know, X token price goes way up
and now it's at one hundred and thirty million dollars
(18:39):
market cap token because of you know, the bullishness of
people's usage of the box, and now all of a sudden,
of course, the smart money. It's like, go, wow, like
this thing's now yielding like sixty percent a year an
X tokens, right, so they pour another three hundred million
dollars in the box and you get a site, and
then it goes to infinity and then everyone makes money.
Speaker 1 (19:03):
The two journalists were a bit stunned by his explanation.
Speaker 13 (19:07):
I think of myself as like a fairly cynical person,
and yep, that was so much more cynical. Yes, I
would have described farming like you're just like, well, I'm
in the ponzi business and it's pretty good.
Speaker 4 (19:21):
And did any of this require any sort of like
economic cases. Just like other people put money in the box,
and so I'm going to too, and then it's more valuables.
They're going to put more money in. And at no
point in the cycle did it seem to like describe
any sort of like economic purpose.
Speaker 13 (19:35):
Can you comment on like the sustainability of that, yeah,
because like you know, on the one hand, you're like, well,
a trillion dollars in social money is going to come
into a bitground. On the other hand, you're like, basically,
there are a lot of ponzis that have done really well.
Speaker 5 (19:47):
Okay, cool, I'll say, on the cynical route, think about,
like cynically, what could happen here? Well, okay, so you've
got things. Box is kind of dumb, but like, what's
the endgame?
Speaker 12 (19:57):
Right?
Speaker 5 (19:57):
His boxes were zero?
Speaker 1 (19:58):
Obviously, Sam Bankman Freed inadvertently described the nature of much
of these cryptotokens. They're built out of nothing. Many of
the boxes or companies were worth zero.
Speaker 6 (20:14):
Again, Dumberg I firmly believe these are all totally unrestared,
wildcat banking ponzi schemes with nothing but thin air backing them.
Speaker 1 (20:23):
By Midsummer twenty twenty two, Sam Bankman Freed was bailing
out cryptocurrency firms left and right. The media dubbed him
the crypto world's lender of last resort, but his actions
were not benevolent. Many believed he was bailing out companies
because of fear the insolvency contagion could spread to his firm.
Sam even began hinting that there were more collapses to come.
(20:47):
In an interview with Forbes, Sam stated, quote, there are
some third tier exchanges that are already secretly insolvent end quote.
Little did anyone know that it was Sam that was
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Welcome back to Red Pilled America. So just as Sam
Bankman Freed looked like the bailout savior during the crypto winter,
(22:34):
what no one yet knew was Sam's companies were teetering
on the edge as well. His crypto trading firm, Alameda Research,
was nearing insolvency. He was no longer friends with cz
of rival Crypto Exchange Finance. Sam had nowhere to turn
but the mirror. But then something happened. In late September
twenty twenty two, one hundred and seventy three million FTT
(22:57):
cryptotokens materialized, and then they were miraculously given to Alameda Research.
At the time, the trading price for FTT tokens was
roughly twenty four dollars each. This fresh minting of FTT
tokens put four billion dollars on Alameda Research's balance sheet.
In one fell swoop, the supply of FTT tokens in
(23:19):
existence increased by a reported one hundred and twenty four percent.
Just like the Federal Reserves dollar printing press, these FTT
tokens were just created out of thin air. As anyone
with an elementary understanding of economics would know, the act
of just printing a currency from nothing could not immediately
(23:41):
add value to a company. The only institution that can
get away with that is the Federal Reserve. Where did
this value come from? How was it that these FTT
tokens were valued at twenty four dollars each?
Speaker 20 (23:53):
Again, Ben Armstrong, FTT was one of the ways that
SBF would pump up the net value of Alameda and FTX.
Speaker 9 (24:03):
They basically wash trade FTT back and forth between the
two companies.
Speaker 2 (24:07):
In other words, they gained the system on Wall Street
wash trading is an illegal way for traders to manipulate
the market. A buyer and seller, for sometimes one investor
acting as both the buyer and seller, illegally collude to
sell a particular stock between each other to mislead other
traders into believing that the trading volumes for the stock
(24:27):
are higher than they actually are. Their goal through this
wash trading is to trick others into trading the same
stock and in the process illegitimately increasing its price. To
wash trade in the crypto world, you just swap out
stocks for cryptotokens like FTT. The process that Sam allegedly
used to prop up the value of his companies was
(24:48):
not a new process. In finance. The scheme looks something
like this. First, you create a stock, in this case,
a cryptotoken, and you retain the majority of those tokens
in your possession. Then you pump up the price of
those tokens through wash trading, or buying them with customer assets,
or through creating propaganda campaigns, whatever you need to do
(25:11):
to drive up the price of the token, and in
a largely unregulated industry like crypto, it wouldn't be that hard. Now,
since you've retained the majority of the tokens. Someone with
a huge batch of said tokens can't lower the price
of them by selling them on the market at a
rock bottom price. Now, with this artificially high value token
(25:31):
on your balance sheet, your company looks like it's worth
a ton of money. So you can go to the
banks asking for loans with the tokens as collateral, or
you can go to investors asking for investments, because hey,
look at my balance sheet, I've got millions upon millions
of dollars. The banks and investors want in because they
don't want to miss out on the chance to make
easy money. They give you real dollars, not cryptotokens, and
(25:55):
now you can use that money to go on a
wild spending spree, like buying the naming rights to stadiums
or locking arms with the biggest supermarket in the world.
The only thing you have to do is keep your
token price high, so the banks keep lending you money
and investors keep buying into your business. But the problem
now is the people that hold your token in the
public want to take advantage of the high prices, and
(26:18):
they sell your token in the market. If enough people
do that, flooding the market would supply. When there was
no real increase in demand, then the token price drops,
as does the value of your company, making it harder
for you to get loans or attract investors. So now
you have to continue the process all over again, pump
up the price of the token through wastch trading, or
(26:39):
using customer assets to buy the tokens at a higher price,
or any other scheme, whatever it takes to raise the
token price. Eventually you run out of money. That's when
you come up with an idea. If you control the token,
you can just print up more of them and place
them in your account to make your company look more
valuable on paper. You basically create cryptotokens out of thin airers.
(27:03):
That that is what Sam bankmin Freed did in this
moment of crisis at the end of September twenty twenty two.
Speaker 20 (27:22):
Again Ben Armstrong, so you just have a long history
of Sam creating money out of nothing, and even there's
a video where he explains how he does it.
Speaker 9 (27:31):
And when they needed more money, they would just print
more FTT and then they would be able to immediately
add value to their balance sheets.
Speaker 2 (27:40):
By late October twenty twenty two, Sam must have felt
like he'd stabilize the businesses because he became a little
bit cocky. At the time, Finance ftx's primary competitor was
apparently in some legal trouble, so Sam decided to sucker
punch Finance's owner CZ. He jumped online and tagged his
(28:01):
old front of me in a tweet suggesting that CZ
wasn't even allowed to go to Washington, d C. Because
of his legal issues. The public potshop must have burned
CZ up. The stage was set for an epic chess move.
In a stunning coincidence, just a few days after Sam
sucker punch CZ, Alameda Research's balance sheet leaked to the press.
(28:23):
Crypton New's outfit Coindesk was the first to publish a
report on it, claiming that Alameda Research had fourteen point
six billion dollars in assets. But here's the kicker. That
value was almost entirely derived from FTT tokens. In other words,
it was Sam Bankman's breed's own token that was propping
up his company, not real US dollars, gold or some
(28:46):
other universally recognized asset, not even bitcoin. The coin desk
report got the ball rolling, but it was someone else
that Dug Deeper, an investigative journalist that goes by the
moniker Dirty Bubble Media, also received the leaked Alameda balance
sheet and he expanded on the coindesk original report.
Speaker 12 (29:05):
Two days later, I published an article.
Speaker 2 (29:07):
That's Dirty Bubble Media.
Speaker 12 (29:09):
That basically took that information, plus the information I saw
in their balance sheet, the actual copy of it, and
basically broke it down in a way that people can
understand it to explain why it was as bad as
it was. Essentially, they were using worthless assets as collateral
for loans and that they were insolvent in very real terms.
Speaker 2 (29:30):
The news of his article spread quickly within the crypto
communities on Twitter and YouTube.
Speaker 7 (29:35):
Newses came out that FTS is actually insolvent, and Dirty
Bubble Media actually went ahead and did a lot of
digging up.
Speaker 2 (29:42):
All The reporting sparked an idea in CZ's mind. Again,
Ben Armstrong.
Speaker 9 (29:47):
So bini Itz and FTX obviously had beef with one
another at that point, but it goes back much further.
When you really look at CZ verse Sam. For about
six months, there was a deterioration of that relationship. Is
I believe CZ found out more and more about what
Sam was doing.
Speaker 2 (30:03):
Caught wind that Sam was trying to monopolize the crypto
industry by influencing federal regulations. This didn't sit well with CZ.
He no doubt felt that it was a direct attack
on his company finance.
Speaker 9 (30:14):
And then at some point he found something out that
was like, Okay, now I can't look back, I can't
turn away. At this point, I got to slam down
on this and do something. That's what he did. He
announced he was doing it, and he did.
Speaker 2 (30:26):
It, and CZ had just the right thing to take
out Sam. Remember those FTT tokens that Sam gave CZ
when he bought out Caz's share in FTX. Well, CZ
held onto those FTT tokens and a little over a
year later those tokens transformed into digital scud missiles on
Sam's business. If CAZ decided to flood the market with them,
(30:54):
the price of FTT tokens would plummet, bringing Sam Bankman
Freed's entire scheme to an end. You see, Sam's company
were holding the majority of FTT tokens. The company's enormous
value was derived from them, so Sam needed the FTT
token price to stay high so that he could continue
to raise money based on their high value. If the
(31:16):
price fell, so would Sam's house of cards. CC must
have seen the opening and he decided to take the
shot again. Dirty Bubble Media.
Speaker 12 (31:27):
The head of the Finance Exchange, which is the largest
exchange in the world and previously an investor in FTX,
announced that they were going to be selling some six
hundred million dollars worth of this token that FTX had
created out of thin air and was using a collateral.
Basically put them between a rock and a hard place.
So that, combined with the resulting panic sparked by my
(31:48):
reporting other reporting kind of led to withdrawal cascade.
Speaker 2 (31:52):
In other words, there was a run on Sam's bank.
Fearing the FTX and Alameda Research were both insolvent, people
began withdrawing their funds from FTX.
Speaker 7 (32:02):
Unfortunately, I have some bad news to report currently, a
bank run is happening on FTX. Its reserves, specifically, Etherium
is being drained off by the hundreds of millions right now.
Speaker 2 (32:16):
Sam took to Twitter to try and calm the market.
Speaker 15 (32:19):
Over the weekend, speculation rose about the solvency of FTX.
This came after a coined Ask report revealed Alimedd Research's
balance sheet is full of ftx's native token FTT so
FTX CEO Sam bankman Free took to Twitter this morning
to clear something up. He said that a competitor is
trying to attack the company with rumors. He then says
(32:40):
in the same tweet, ftx's fine assets are fine.
Speaker 2 (32:45):
Alimeter Research to CEO Caroline Ellison tried to calm the
storm as well, tweeting the Alameda had assets not included
in the leaked balance sheet. To keep the FTT token
price from falling, she publicly offered to buy CZ's tokens
at the then market rate of twenty two dollars each
to keep him from putting in up for sale on
the open market. Cz turned her down. He must have
(33:07):
smelled blood. Cz then proceeded to flood the market with
the FTT tokens he possessed, and the price of ftx's
crypto coin plummeted. In just two days, FTT went from
twenty two dollars a token to just five dollars and
(33:30):
fifty cents a token. A day later, it dropped another
sixty percent. Sam desperately tried to raise over a billion
dollars from Silicon Valley, but no one bit, so Sam
took drastic action.
Speaker 7 (33:43):
Breaking news. It appears that FTX has stocked with draws
for to pass basically four hours the jig was up.
Speaker 14 (33:51):
And some people saying that if they log into FTX,
they have a bounce of zero.
Speaker 12 (33:56):
Now FTX, the Big exchange, has filed for Chapter eleven bankruptcy.
I'm trying to understand exactly how a company, the second
largest crypto exchange in the world, has become.
Speaker 4 (34:08):
Insolvent and followed for bankruptcy in the space of a week.
Speaker 21 (34:11):
The company's controversial chief executive, Sam Bankman Freed, resigning a
CEO and will remain to assist in an orderly transition.
Speaker 2 (34:19):
Sam Bankman Freed was eventually arrested. In addition to the
federal indictments of wirefraud and a list of other charges.
News began to surface it Sam was not necessarily the
effective altruis that he claimed to be.
Speaker 1 (34:31):
The company FTX. Sam Bankmint Freed, himself and his.
Speaker 4 (34:35):
Parents all owned around three hundred million dollars worth of
luxury or real estate out in the Bahamas.
Speaker 20 (34:42):
Well, here's the thing.
Speaker 18 (34:43):
If you're running any kind of currency operation and you're
involved in a polyamorous relationship with seven other people.
Speaker 1 (34:51):
I gotta thank you whack ten ten other people totally.
Speaker 2 (34:54):
What do they do?
Speaker 20 (34:54):
They just were polyamorous living in a house together.
Speaker 1 (34:56):
I'll live together in the same place in the Bahamas.
Speaker 2 (34:58):
And then I'll just bang each other SBF, just thirty
two years old, was sentenced to twenty five years in
prison and ordered to pay eleven billion for its fraudulent schemes.
Sam Bankman freed with the darling of the crypto industry,
considered the man with the master plan for crypto, yet
his company joined the graveyard of crypto companies that fell
(35:20):
during the crypto winter. The turn of events started to
make people wonder where does crypto go from here.
Speaker 1 (35:28):
The dilemma for the cryptocurrency industry is that after more
than a decade, no one has derived a commercial use
for crypto. It hasn't become a form of digital cash
to make purchases, and it's too volatile to be a
digital asset like gold and silver. Crypto technology, especially bitcoin
in the blockchain, was touted as being the technology that
(35:49):
would allow people to bypass the central bank. It was
initially promoted as internet cash used to buy and sell products,
but when experts in the field are asked when will
that happen? Has stubbornly remained the same.
Speaker 11 (36:05):
Are we going to actually see more payment services carried out,
more customers, consumers using things like for example, Bitcoin re event, dogecoin,
if you're Tesla to actually make purchases. Is this the
year and where that actually happens?
Speaker 9 (36:19):
Well, I think that We're going to have to just
see about And the reason I'd say that is I
think people want dollars.
Speaker 4 (36:28):
I think they want to make payments and dollars.
Speaker 9 (36:30):
Well, bitcoin's been around ten years, twelve.
Speaker 1 (36:32):
Years, that's Peter Schiff, famed CEO and chief Global strategist
of Europacific Capital Incorporated. Peter is perhaps the world's leading
critic of bitcoin and thinks the cryptocurrency industry is the
biggest Ponzi scheme of his life. He argues that bitcoin
is no longer in its infancy and yet still hasn't
found a use case.
Speaker 9 (36:53):
It's never evolved beyond a speculative token in the first
twelve years, so why shouldn't the next be any different?
Speaker 1 (36:59):
Dirty Bubble media is skeptical as well.
Speaker 12 (37:02):
Is there any use case for I don't know, I
haven't yet come across a project that seems to actually
be generating positive cash flow and generating something of economic value.
I haven't encountered that yet. So and the thing is,
if this technology was so useful, why isn't Google using
it right? Why isn't Amazon using it? Why isn't Facebook
using it?
Speaker 1 (37:21):
There's a real split amongst cryptocurrency enthusiasts. Many believe the
other new tokens are just fraudulent, get rich quick schemes,
while Bitcoin is the real deal, the one digital currency
that can free citizens of the world from the disastrous
policies of central banks. And there is an argument that
Bitcoin is different than these other tokens. It does appear
(37:42):
that it launched organically, the public couldn't game that system.
It's also decentralized, no one controls it, and bitcoin is
by far the most adopted cryptocurrency of them all. Does
the fact that so many people believe in it give
it some kind of network effect? Or people use it
because so many people use it? I asked Stumberg if
there was any legitimate quality to bitcoin or was it
(38:05):
just a massive Ponzi scheme?
Speaker 3 (38:07):
I would say both.
Speaker 6 (38:09):
So to the first part of your comment, there is
undoubtedly a network effect for the creation of value, and
a quintessential example of that is gold. I mean, gold
is a inert metal that has some interesting chemical properties,
but collectively, over five thousand years, people have decided that
(38:29):
gold is a valuable asset worth owning. And since enough
people have decided that, and enough examples in history of
hyperinflating fiat currencies have proven that those who at the
early stages of a hyperinflationary environment were shrewd enough to
get their hands on as much gold as they could
did very well.
Speaker 1 (38:57):
But in Dumberg's assessment, the jury was still out on
bitcoin reaching the status of a digital pressures medal.
Speaker 6 (39:03):
The Bitcoin network the people who believe in it is
not nearly as big as gold, and it has not
had as enough validation events as a sort of store
of value as an emergent phenomenon as gold has had.
But it's possible. I could say, like, if you ask
me which of the cryptos I had to put a
certain amount of money in, I would select the Climb.
And again, mostly because of the regulatory clarity with which
(39:26):
a US citizen who wishes to remain within the bounds
of the laws can own transact and participate in the
bitcoin world. There is no central party that controls it
that that would be the one exception to sort of
the whole crypto universe.
Speaker 1 (39:39):
Dooomberg believes that if any cryptocurrency survives the crypto crash
of twenty twenty two, it will likely be Bitcoin and
the technology built around it.
Speaker 6 (39:48):
Much like when we had the dot com boom, where
basically all manner of startups rush to put dot com
and their name, and most of them are vs. And
then when the dot com bubble first, I mean, people
forget how violent that was and how many people lost
all of their life savings and their investments. And yet
from that rubble came Microsoft and Amazon, Apple and the
(40:09):
survivors of the catastrophe of the dot com bubble bursting.
It's seductive to imagine that we're about to see the
same thing, Like there's very interesting things going on in
the crypt universe. Not everybody tried to create a ponzi
token out of it. There will be technologies that survived
this crash. There will be entities that survived this crush,
Bitcoin among them. I mean a bigcointwor's going to keep running.
(40:30):
Whether a bitcoin costs you quote seventeen thousand US dollars
today or four hundred dollars a year from now. The
bitcoin network is going to keep running.
Speaker 1 (40:39):
But Doomberg has a rather dark view of what will
happen with the blockchain technologies that survived this crash.
Speaker 6 (40:45):
The technologies that survived this flush and are ultimately taken
over by the government to impose central bank digital currencies
on the world, which we think is a great plagu
on personal freedom. The owners of that technology will be
handsomely compensated.
Speaker 1 (41:01):
Central bank digital currency are basically the government's version of bitcoin.
Think of it as a federal digital coin issued by
the Federal Reserve.
Speaker 6 (41:10):
Central banking digital currencies. For those that aren't familiar, it's
essentially the elimination of physical cash and the elimination of
the Fourth Amendment. And the government can basically see and
control how you spend your money, and so they could
just decide that the only legally accepted currency the United
States is you know, FED coined, and you're not allowed
to buy guns with a FED coin, for example. Are
(41:32):
you're only allowed to buy so many gawns of gasoline
in a week because your carbon footprint has been exceeded,
or you can only buy so many baggs of chips
and sodas with sugar in them, because you know, buy
and large. Healthcare has become nationalized, and you're being an
undue burden to society by living in the way that
you could do. And so it's a very very small
step from a central panking digital currency to what we
(41:52):
have called in a piece we wrote last year called
Dystopia coin, where you cannot hide from the you know,
the eye of Soren, and the government shall see everything
that you do. There's no tipping with cash, know, giving
a few hundred dollars to a friend that you don't
report to the irs. All the way in which most
Americans express their freedom will be removed in such regard
(42:13):
and our fear in our base case and ultimately, you know,
our objectives to trying to analyze the situation unemotionally is
that the technologies that prove to be useful in the
crypto cycle that we've just gone through will be hijacked
and leveraged by central bankers around the world and they're
never rinning thirst for more control over the populace. And
that's coming. But the technology is developed in the cycle
(42:35):
agreed that we've gone through will undoubtedly be sifted through
and hijacked by the world central bankers and their desire
to eliminate cash and by extension, to eliminate privacy and
by extension, to eliminate private property ownership, which is, by extension,
the elimination of freedom, and of that we are significantly concerned.
Speaker 1 (42:52):
Ben Armstrong agrees that central banking digital currencies or CBDCs
are coming.
Speaker 9 (42:57):
Yeah, it's inevitable. There's no doubt about it's inevitable. It
can be stopped. Digital dollars already out, guys. It's called USDC.
Circle is behind it, Coinbase is behind it.
Speaker 1 (43:09):
Jerome Palak, the chairman of the Federal Reserve.
Speaker 9 (43:11):
Back in twenty twenty, said, we're open to the private
sector helping us to create the digital dollar. It's already
been created. They're already working as well with the European
Union on creating the digital euro. I believe we're three
to four years away from digital dollar coming out, and
I think there's no there's no way to find it,
to be honest with you, one thing we want to
turn our attention to very soon is we want to
(43:32):
outlaw the use of a social credit score in combination
with your money, in combination with a digital dollar. So
what we really need to do is figure out ways
to make that digital dollar safer and to protect ourselves
in the future from great reset from the elites, from
you know, whatever you want to call them, the overlords,
whatever you want to call them. You know, we want
(43:54):
to do our best to protect those through legislation and
just accept the fact that it's coming.
Speaker 1 (43:59):
Doomberg agrees that the American public needs to protect itself
from the inevitable adoption of a digital dollar.
Speaker 6 (44:05):
We in the West, who grew up with in cherishire
privacy in our freedom, desperately need a modernized version of
the Bill of Rights, and I would say a digital
Bill of rights. I think that there still exists within
the Western world a thread of freedom loving citizens who
have an appropriate lack of trust in centralized authority, and
(44:27):
pushed hard enough, will demand a new digital Bill of rights.
Donald Trump can't freeze my bank accounts without some due process,
or Joe Biden can't freeze my bank accounts without due process.
And for a politician to be able to inspect my
transactions without any suspicion of wrongdoing should be illegal, and
we should codify this. And perhaps the fear of totally
(44:49):
losing your rights and freedoms might provoke an appropriate political
response that leads us to a place where we can
incorporate the benefits of these technologies.
Speaker 1 (45:05):
Which leads us back to the question where is crypto going?
It appears that the crypto world is developing technologies that
could one day lead to the end of the paper
dollar and the establishment of a central banking digital currency,
and this could be an extraordinary challenge to American freedom.
(45:28):
When we started our inquiry into the world of crypto
in twenty nineteen, we asked the question is bitcoin dangerous
to America? What sparked our interest in that subject was
a statement earlier that year by then President.
Speaker 17 (45:40):
Trump, a crypto is being talked about. The President actually
weighed in and tweeted about cryptocurrencies last night. He wrote,
in part this, I'm not a fan of bitcoin and
other cryptocurrencies, which are not money and whose value is
highly volatile based on thin air. He writes, unregulated crypto
assets can facilitate unlawful behavior, including drug trade and other
illegal activity.
Speaker 1 (46:00):
Rights the president to make this argument, Trump administration and
other politicians claimed that cryptocurrencies were completely anonymous and therefore
would facilitate massive illegal activity. But when we dug into
this claim, we found the argument was flawed. It was
actually the technology underpinning bitcoin, the blockchain, that allowed criminals
(46:21):
to be tracked down. So we concluded that bitcoin was
not necessarily something Americans should fear. But did we get
it wrong? Well, I think it's fair to say that
Donald Trump thinks he got it wrong.
Speaker 12 (46:33):
The crypto collapse does not appeared to be worrying one
major celebrity.
Speaker 14 (46:38):
Former US President Donald Trump, has officially entered the cryptosphere.
Speaker 1 (46:41):
Trump used a cryptocurrency to launch a digital trading card. Ultimately,
technology like bitcoin is just a tool, like Twitter, or
Facebook or a gun. What makes any tool dangerous is
the user operating it. Paper cash is used by lemonade
stand operators and the Mexican cartel. If the experts are right,
an a central bank digital currency is inevitable that Americans
(47:04):
need to demand a digital bill of rights, one that
prohibits a tyrannical government from using a cryptocurrency to dictate
our behavior. And for those of you that think a
federal crypto dollar is a thing in the far off future.
Perhaps you should reconsider your timeline.
Speaker 18 (47:21):
So you might have missed what happened Wednesday afternoon at
the FED. They started their central bank digital currency, so
they rolled it out and it's in its beta test now.
Speaker 2 (47:36):
Red Pilled America is an iHeartRadio original podcast. It's owned
and produced by Patrick Carrelci and me Adriana Cortez of
Informed Ventures. Now. You can get ad free access to
our entire archive of episodes by becoming a backstage subscriber.
To subscribe, visit Redpilled America dot com and click join
in the topmenu. That's Red Pilled America dot com and
(47:57):
click join in the topmenu. Thanks for listening.
Hosts And Creators
Adryana Cortez
Patrick Courrielche
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