FTX's messy downfall; the biggest financial scandal in history?
A proper investigation into FTX and the money laundering loop they ran through Ukraine and the Democratic party could bring down everyone involved.
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”Three great forces rule the world: fear, stupidity, and greed.” - Albert Einstein
What do you get when you cross Theranos with Lehman Brothers' respective collapses? FTX. This is widely considered the largest financial collapse in the history of money itself.
The true fallout of the financial collapse of Sam Bankman-Fried and FTX still has yet to be fully realized.
It seems that FTX went to great lengths and spent a staggering amount of money bribing and paying off anyone and everyone that could have caused them to collapse sooner than they did, from news media to politicians to officials meant to be regulating them. It’s especially telling that it didn’t truly begin until after the midterm elections, long after the absurd amounts of money that Sam Bankman-Fried committed to Democrats had already been spent. Money that very likely belonged to the investors he and his company ripped off.
I wonder if the funds that Bankman-Fried was casting far and wide for Democrats were from the ‘Trump Lose’ budget?
It’s something to think about. But Democrats of course find a way to deflect blame.
Chairwoman of the House Financial Services Committee, Rep. Maxine Waters (D-CA) seemed uninterested in being a good human being — as she often does — when she was asked about whether the money she and other Democrats received from any entity related to Bankman-Fried or FTX should be paid back out of their own coffers.
”Do you think some lawmakers that got donations from FTX's founder should give that money back?” The Fox News reporter asked.
Maxine Waters proceeds to dodge and deflect, as Democrats always do, replying, “Oh, well I don't want to get into that. As a matter of fact, both sides - Democrats and Republicans - have received donations, so... thank you.”
She phrased it as if that was some kind of dunk, but the numbers are severely skewed in the favor of Democrats, who received exponentially more money from Bankman-Fried. “They did it, too.” is not a good answer to this question. And while she isn’t wrong, the amounts given to each party are important to note.
In the 2021-2022 period, according to data on opensecrets.com, Bankman-Fried gave $36,846,356 to Democrats, and $240,200 to Republicans. $240k is not nothing, of course, but it’s considerably less than $36.8 million. It certainly isn’t enough to sway an election for an office as high as Congress. That makes a huge difference, despite some institutional lefties claiming the contrary. As White House Press Secretary Karine Jean-Pierre would say, “That matters.”
The devious and criminal fact that the media is severely downplaying is a scheme that could have saw not only money from FTX’s customers being improperly appropriated by the company to give to their favored politicians, but taxpayer funds as well. And that seems to have been done by providing a gross amount of military aid to Ukraine.
Until this house of cards came tumbling down, here was the basic scheme:
I fully understand why the mainstream media feel the need to put the kibosh on this particular aspect of the FTX scandal, though from a journalistic standpoint it simply doesn’t make sense. This is one of the biggest, most scathing news stories anyone can imagine. To suppress this is akin to when ABC News suppressed Amy Robach’s story on Jeffrey Epstein. It might even be much worse, and the fervor with which the institutional left’s gaslighting machine is fighting this particular story is telling.
My rule, as some who read this Substack can attest if they’ve been keeping score is this: If something is fervently ‘fact-checked’ then there’s a really good chance there is at least some truth to it. And just look at how vehemently Google tries to pull the wool over my eyes when I simply search ‘Ukraine FTX’.
To assert that this is patently untrue is a flat-out lie, especially when one uses the #1 tactic for figuring out where the scam is in anything: follow the money.
President Biden and Democrats have been very, very generous with taxpayer money going to Ukraine, and finding that answer — as this article also can attest — is slightly difficult.
According to the Kiel Institute, the United states has committed over $54 billion to Ukraine, and with an additional White House request, that number could go as high as $91 billion. Imagine all the issues this money could solve. But Washington hates solving problems. To solve problems is to have no issues on which to run for public office.
The next time I see someone whining about billionaires not fixing the homeless and hunger problems in America, I will refer them to their own government pissing away enough money to fix those problems 5 times over to enrich themselves, their comrades in Ukraine, and to ensure their death grip on power. But I don’t think the above-board stuff that has seen the light of day begins to explain the scope of the scheme at hand.
On Nov. 7th, during a meeting in Nassau, in the Bahamas, with other FTX executives, Bankman-Fried presented spreadsheets showing that FTX had moved approximately $10 billion in customer funds to their sister firm, Alameda Research. In introducing Alameda, I would be remiss not to introduce also Alameda’s CEO and ex-girlfriend of Sam Bankman-Fried, Caroline Ellison. She openly bragged about being a bonehead on a podcast, saying that she didn’t ‘need her math degree’ to be the CEO of Alameda, according to a 2021 interview that can be found here. Now she is likely on the run herself, still in possession of hundreds of millions of dollars of those ‘misappropriated’ funds sent over by her doting ex-boyfriend.
She is significant because she oversaw the trading operations at Alameda — trading that was apparently done with those customer funds that were sent over to Alameda by FTX. Oh, and I forgot to mention that she had a mere 18 months of trading experience before becoming the CEO of a crypto trading company. Talk about a meteoric rise. Kamala Harris’ example proves fruitful once again.
According to sources familiar with the matter, it is estimated that as much as $2 billion in customer funds had simply disappeared from that amount. It really begs the question — did this woman somehow lose $2 billion through her crypto trades? Given that she said stop losses aren’t a good way of mitigating risk in trading, I’m leaning toward yes. Also, I have to say that number again: $2 billion. Damn. And here I thought my options losses were bad. But I digress.
Why is the amount of missing money significant? Sam Bankman-Fried famously pledged that he would give as much as $1 billion to the cause of ensuring that Democrats win the White House again in 2024. He had to get that money together somehow. And he likely used his skills as a ‘hacker’ to do it. No need to liquidate your own assets if you can just steal it from the users of your trading platform, I guess.
Sam Bankman-Fried had allegedly built a backdoor into the platform itself to siphon off funds without setting off any alarm bells, sophisticated enough that auditors who looked into the company’s finances would be none the wiser.
So not only is there a shady conflict of interest element to this scandal, but there is also the matter of outright stealing money from customers, effectively leaving them holding the bag for the gross misappropriation of the funds with which customers had entrusted FTX.
One of the most disgusting aspects of this fiasco is the fact that the bankruptcy proceedings could potentially lead to lawsuits that will attempt to take back the funds users managed to withdraw from FTX. That’s right. The super rich do something criminal and the little guy has to foot the bill for it to the tune of $5 billion in this case, according to Bankman-Fried’s assertion that users withdrew that amount in the days leading up to FTX filing bankruptcy on Nov. 11th.
Like I said, disgusting. But, creditors must be paid back and any assets on FTX’s books around the time of the bankruptcy — before or after — that can be traced will likely be targeted, even if it outright steals from the poor to give to the rich. Just think about that while also remembering this: even if his fortune has been decimated, Sam Bankman-Fried is still worth hundreds of millions of dollars. Users of FTX get fucked while he remains a millionaire.
Of course, that isn’t set in stone, depending on how his trial goes in the event the U.S. is successful in extraditing him to face justice. However, given that we have a provable two-tiered justice system in this country, it’s unlikely he will be prosecuted to the fullest extent of the law, no matter what he did. And if you want proof of that, get a traffic ticket and attempt to use the Hillary Clinton defense of ignorance, I guarantee that you will not be exonerated.
Bankman-Fried has friends in high places and those friends have institutional and political power to spare, so the likelihood that he himself faces justice is highly unlikely, if history is any example. Think about the 2008 housing collapse. High-placed bankers torpedoed the housing market, and how many of them actually faced justice? Only one. And then the big banks that gambled with the world economy and lost got bailed out.
So it should be understandable that I lack faith in anyone involved in FTX’s collapse actually facing justice, especially as some of those alleged benefactors/accomplices are prominent individuals, and some even hold office. Celebrities who have advertised and worked with FTX are even named in the lawsuit against FTX.
This is a developing story. I will attempt to establish a timeline and chronicle the events of this scandal as more information is made public.