1:05Bryce WeinerSo, if, if Sam gives them $11 million, that’s like a drop in an ocean of money. That’s 2020. So, you can like write that off instantaneously. Virtually no impact on 2020. On 2022, we don’t know how much anyone spent yet. Nobody is releasing those numbers. So, we don’t know if it was, you know, know, 10%, 1%? What’s the percentage of impact this $40 million had on the 2022 elections? We have no idea. Nobody’s releasing any numbers. In fact, the only thing that we know about this money so far is that 2 people have given it back, one of them a Democrat, one of them a Republican.
1:05Bryce WeinerSo trying to -- and that’s what really is kind of like nerfing some of this conspiracy theory naturally. Because a Republican already came out and gave the money back. So you can’t talk about Democrat money without asking how much do the Republicans get. Sure, they got half as much, but what percentage was that? Was that, you know, did the Republicans spend more money than Democrats? I don’t know.
3:01Kamal HubbardSo then this also brings in, uh, the question or The question of SBF’s mother and father being Democratic political organizers or bundlers, money financiers to a certain extent.
3:23Bryce WeinerAnd that’s when you kind of have to broaden your viewpoint a little bit because SBF’s politics are not those of his parents. And, you know, these kids are under 20, and I call them kids because they’re all under 30. So they’re like barely adults. And that puts them at the ass end of the millennials and makes them like elder Gen Z, right in that middle ground, right? So, you know, they grew up in a world with nothing but social media, where social media existed. Cryptocurrencies were a thing as they were entering junior high school, so it’s always been in their consciousness. This particular generation is what you have to look at.
3:23Bryce WeinerTheir politics are off the hook. There aren’t a lot of alt-right Gen Z, but there are a lot of disaffected, do not care, nothing matters, a really nihilistic mindset. That’s where these kids fall in. They’re like other nihilists. That’s where things start to get dark. That’s where it starts to get a little twisted. The relationship between FTX and this other company we’re going to talk about called Alameda is that they were one, they go hand in hand. One was an exchange platform, the other one was a trading company. You have an exchange and you have this big company trading on your exchange. The big company trading on your exchange brings money from the rest of the ecosystem to your platform.
3:23Bryce WeinerThey worked hand in hand, and that is why SBF owned both of them. This relationship between them and the relationships between the people who operated them, that’s where that really starts to tell you that the political donations were meaningless. These were narcissistic, nihilistic rich kids with nothing better to do. They were stealing other people’s money, and they were given permission and empowered to steal other people’s money by everyone around them. by some of the greatest VCs in Silicon Valley -- VanEck, Sequoia, Sino Capital. And now these kids are like, oops, I’m sorry. Please forgive us. We’re going to try again. Do-over. Like, they just want a mulligan.
3:23Bryce WeinerIt’s amazing. They don’t realize they’re going to jail. Finally, I was crying for like, God, someone take his phone. Because he kept tweeting and kept giving interviews. And, and one interview was so damning, and it was conducted via DMs on Twitter with a Vox employee, that the, that the reporter, she was like, I don’t even know this kid, you know, I interviewed him once, don’t really have a relationship with him, but I DM’d him when all this shit went down and he just got back to me last week and here’s what he said. And she didn’t even Like, you can’t even -- she just posted the screenshots of the conversation verbatim, and then they were later confirmed to be legitimate.
3:23Bryce WeinerBecause when you read it, you can’t -- there’s nothing to report there, you know? It’s much better just to let the man have his own words because it’s -- he’s going to jail. He’s going to jail. the first-day filings that the bankruptcy attorney -- the new CEO was the guy they called in when Enron collapsed. And so, they’re, you know, when you have billions of dollars, you call in all these special guys who know how to disassemble this stuff. And so, they called in the guy who was the CEO of Enron and oversaw the dismantling of Enron. And he said he’s never in his entire career seen anything worse than this.
3:23Bryce WeinerThis is the absolute worst-case scenario for the collapse of a company worth billions of dollars. Worst case. His filings actually included the DM conversation that was published in Vox. Yeah, it’s already a matter of court record. This isn’t even a criminal, this is just a bankruptcy. So, so now he’s got his own statements versus what’s being submitted as court record by experts. And not only are they understandably and expectedly drastically, uh, uh, miles apart, um, he just won’t shut up. He keeps talking. He’s going to jail. Anybody who was involved in this, in the million -- you know, we had no -- I had no exposure. I don’t believe you had any exposure.
8:26Kamal HubbardNo.
8:27Bryce WeinerAgain, this was just a click in crypto. If you’re watching this and you did have some exposure to this, my heart does go out to you, but we’ve all been through this. I made a joke about the Venn diagram of the people who lost money in Mt. Gox and the people who lost money in FTX, and it’s just 2 circles that don’t even touch. Because this happens. Bitfinex happened to them. We’ve seen exchanges collapse and people steal money out of this industry for as long as this industry has been around. It’s grown and matured to this point because everybody learns and everybody gets wiser every time it happens. This time, it’s big. Now, we’re going mainstream on this and we don’t get a choice. The story is too sexy.
9:24Kamal HubbardRight. And so I think maybe to kind of put a tail end on this whole deep state psyop, uh, conspiracy theory is that we’re gonna get a bevy of new regulation when it comes to crypto that comes out of this, that is reactionary to this.
9:46Bryce WeinerUh, well, Let me say, because there is a very -- because you have to understand, the regulators that are responsible for this, the CFTC and the SEC, they are responsible for a lot more than crypto markets. The reason why we have not seen regulation is because anything they say applies to the whole market system. They have to be very, very, very careful. We have almost threading a camel through the eye of a needle on this. However, however, there is a way to do this by placing some new regulation on spot exchanges, which are involved in lending practices. Around that, That would come from probably the CFTC.
9:46Bryce WeinerBut other than that, there’s not really much regulators can do here without an act of Congress. They just don’t have the power to do it. And if they did have the power, they would have. The reason why the SEC is regulating by enforcement is because they don’t have a choice. And a lot of folks who don’t understand the American system of civics, or, or even how the SEC and CFTC relate and integrate into our markets, as well as the government itself, Because it is confusing. They aren’t attached to any branch of government officially. So it’s like a 4th branch of government. That sort of lack of the understanding of the nuance is leading to people being very frustrated with it.
9:46Bryce WeinerAbsolutely. And, you know, everybody just needs to take a deep breath and calm down. And when we look at what really went wrong here, It was a lack of any control over lending. Institutional lending is that way for reasons, which of course helps the economy move, but we track it. It is reported. Intrabank lending rates are something that -- and interbank lending rates are something that are published. We can see those numbers. We don’t see those numbers in the cryptocurrency industry because there’s no reporting of it. If there were reporting of it, number one, it would make this industry a lot stronger, because then we would really all know what we’re investing in.
9:46Bryce WeinerThere’s enough here, we don’t have to pretend anymore. I get it. There was a time when we didn’t have very much, and the order books were a lot thinner than they appeared to be. And we all sort of had to like shuffle things around to make it look a lot bigger than it was. But we’re way past that, guys. We don’t have to do that anymore. We are in fact worth trillions of dollars. And let’s open up the books. Let’s allow some visibility into these lending practices. And that way we can, you know, we can trust but verify. That’s, you know, one of the mantras of this industry.
9:46Bryce WeinerLet us do that with crypto-SIFI, systemically important financial institutions, SIFI. Crypto-SIFIs should report their lending practices, because then everybody knows how much debt everyone has, and we will never have anything like this ever happen again. It is a very simple solution. It has nothing to do with blockchains or You know, retail investor access or anything like that. This is regulating the companies to report how much debt they have. That’s all. How much debt do you hold? How much debt do you owe? That’s all that we’re looking for here. And that would end all this fuckery all at once across the board. And it wouldn’t -- all you have to do is just report it.
9:46Bryce WeinerNobody is going to hold you to anything, you know. Just report it. If you’re doing your accounting the way you should anyway, it shouldn’t be a problem. You hit a button on SAP and it prints out your liabilities. If it’s not like that, then this industry needs to grow up a little bit because that’s how adult financial institutions operate, and we’re there. If we’re dealing with billions of dollars, you should ask them, Excuse me. Beep. You should have some accounting practices. And FTX and Alameda had none. That’s why I’m so agitated about this. I can’t believe that Silicon Valley gave these clowns billions of dollars in investment, investment money, investment money, with no bookkeeping, no accounting, no records of any meetings of board of directors, no records of any decision-making, no records of employees, no records of anything.
9:46Bryce WeinerThey just didn’t even keep them. It’s not like they deleted them. It’s like they don’t exist. So every time they had to present, you know, you pitch a company -- this is the part that amazes me -- when you pitch a company, you have to show financials to the investors. It’s basic due diligence. Which means every time they went and pitched somebody, they made the numbers up on the fly. And nobody ever double-checked it. Not anyone ever double-checked them.
15:20Kamal HubbardWhat do you think that is a function of? Greed.
15:26Bryce WeinerGreed, and in cryptocurrency, it is not the tokens that are worth the most, it is trust. Because if you do not have to trust anybody, then the most valuable thing is trust. Trust relationships are what enable money to move from point A to point B, even on a blockchain. These -- it is clear, it is clear, if you have any, even a glancing blow to the tech sector in Silicon Valley, in San Jose, and San Francisco, and you see the people who invested, you know that it was just introduction after introduction after introduction after introduction. Because this person vouched, and this person vouched, and this person vouched, and this person, and this person, it was just a vouch system.
15:26Bryce WeinerLike anything else, like there’s literally nothing new under the sun, and people wanted to believe it, and their greed got the better of them, and I I people just didn’t ask any questions, not even the wrong questions; they just didn’t ask any questions. How do you get a billion dollars? Like when when this was one of the crazy things. The Sam was the darling of the financial media. They called him the new J. Morgan or the new Carnegie. And they were just falling all over themselves trying to compare him to these great financial titans, everybody with Madoff. And it was hilarious because at the end of the day, these are the people that enabled him to do all this.
15:26Bryce WeinerAnd he got paid. They said, oh, he’s a billionaire. He is worth billions. Everyone knew Sam was a billionaire. Where did he get the money from? Was it owning FTX equity? When people said Brian Armstrong was a billionaire, it is because he owned all that Coinbase equity. That is what made him a billionaire. We know what made Brian Armstrong a billionaire. We did not know what made Sam a billionaire, and it turns out it was everyone else’s money.
17:35Kamal HubbardWell, and I think this is a good Time to hit another fork in the road and now begin talking about Alameda, right? This is the company that, uh, SBF put together prior to the incorporation of FTX. And it was, like you said, it’s a hedge fund, a crypto hedge fund that came together. Or maybe you can describe what Alameda Research was.
18:06Bryce WeinerAlameda Research was -- if you think about an exchange like the engine of a car, Alameda is the fuel supply system. It’s the fuel pump, the filter, the gas tank, and even the guy that pumps the gas into the tank that makes the whole engine run. Having every exchange in crypto, and actually every exchange, period, it does not matter if it is fiat currency exchanges, it does not matter if it is a stock exchange, equities, any exchange, there is always the people who own it, and then this company like Alameda that does the trading. And they do borrowing and lending and they bring in money and they’re the ones who sort of help customers interface with your products for a fee, of course.
18:06Bryce WeinerAnd these -- this is like, if you’re familiar with the movie Trading Places, which to me is like my favorite Christmas movie, that the brothers in that movie, the old dudes, the white guys, actually run a hedge fund trading company, but they also have seats on the exchange. So they own the exchange, and they have this trading company where they help people buy and sell the assets traded on the exchange. Same thing. So you can look at this movie from the ’80s and see the exact same setup that FTX and Alameda had. That’s what Alameda is. They just trade. They help clients, big money clients who don’t want to go in and push the buttons themselves, move money in and out of the markets and trade in various assets.
20:05Kamal HubbardI guess in other words, they were the market maker for FTX, right? They made the markets for the various tokens that were listed, and they were going outside of FTX to get other folks, uh, or other assets, typically at a discount so that it could get listed, or get a listing fee to list and to, uh, like you said, do the trading while they’re skimming off the top and giving profits back to --
20:37Bryce WeinerWell, and here’s where, here’s where things get really bad, because Alameda, right, is generating all of this churn, all of this money, all these trades going back and forth on the FTX platform, right? So it’s going back and forth, all these trades. And with all these monies flying back and forth, they’re like, why don’t you give us your money and we’ll put your money in there with us, and then you can take a little slice of the money that we’re making from all these trades going back and forth? Let us borrow your money. So what -- but here’s what happens. We now, we get to a word called commingling.
20:37Bryce Weinerwhere the money that belonged to Alameda was mixed in with the money that belonged to FTX. When you lent money to Alameda, it went into FTX, or maybe, or it didn’t. We don’t know. That’s what commingling is. We just have no idea. All these trades are going back and forth, and then your money comes in, and on the other end, trades going back and forth, Your money comes in and then SBF is taking out handfuls to support his lifestyle and be a billionaire wunderkind. And eventually, if you come back and say, give me my money back, and there’s no money there because Alameda and FTX are just making up these numbers, this back and forth, this is now all make-believe.
20:37Bryce WeinerThere’s no actual money changing hands. It’s not because there’s no money there. Because it’s all been gone. It’s all -- it was all taken over here. So of course, the game is get as much money in on this direction so you can take more out here and then just keep the churn moving. So as long as this is happening, everybody thinks their money is still safe. And, and of course, it’s just a game of musical chairs. I mean, literally a Ponzi scheme. So the, the, the relationship between Alameda and FTX is integral and intrinsic. to the crimes that were committed. Absolutely. Don’t close your eyes. I could see everything all of a sudden.
