FTX’s Sam Bankman-Fried (SBF) now wants to double down on “Ponzinomics” to save his own skin

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Albert Einstein famously said that the definition of insanity is doing “the same thing over and over again and expecting different results.” Well, the former CEO of the now bankrupt FTX exchange, Sam Bankman-Fried (SBF), believes that returning to Ponzinomics – an operating model inspired by the mechanics of a Ponzi scheme – is still a viable way forward for the defunct cryptocurrency. exchange.

You have to be especially silent to double down on the thing that caused the original mess. As a refresher, FTX has maintained a secret symbiotic relationship with Sam Bankman-Fried cryptocurrency trading firm, Alameda Research. The arrangement necessitated hybrid bank accounts, which gave Alameda the facility of “borrowing” FTX clients’ funds by simply posting collateral in the form of illiquid coins such as the FTT token. For starters, the FTT token is FTX’s in-house currency that offers a number of rewards to its holders. FTX has maintained the value of FTT by periodically using a portion of its fee-based revenue to buy and then burn a portion of the original token, thus ensuring that the Alameda collateral does not lose value.

However, this clever arrangement came to a halt once Alameda’s massive exposure to the FTT token became public knowledge, prompting Binance to begin divesting its FTT holdings. Amid the chaos, then Alameda CEO Caroline Ellison dumped the company’s bottom price on the Financial Times, inviting more speculative attacks. And all the while, customers rushed to withdraw their money from FTX, which led to a complete bank run. This eventually led to FTX filing for bankruptcy and Sam Bankman-Fried’s unofficial exit from his prime position at the helm of a crumbling multi-billion dollar crypto empire.

This brings us to the crux of the matter. One fake fan recently tweeted that FTX should “issue a new FTT token. Distribute the token to creditors/depositors. 100% of profits accrual to token holders. It will be the largest exchange in the world and users will be more than all.”

To this suggestion of accelerating a Ponzi scheme 2.0, Sam Bankman-Fried replied that it would be a “productive” path for the parties to explore, essentially hitting the point made by the former CEO of FTX, after it triggered one of its largest bankruptcies. In the history of corporate America, he seems to have learned almost nothing and is willing to double down on “shitcoinery,” as Michael Saylor of MicroStrategy put it to save his own skin. We are not talking about the sheer audacity and cruelty with which SBF still views his deliberate steps that have now caused untold misery to thousands of his clients.

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FTX’s new CEO John J. Ray III, the veteran attorney who oversaw Enron’s bankruptcy, has his hands full trying to not only locate lost money for exchange clients but also limit the damage caused by Sam Bankman-Fried’s signature delusional musings.

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