Downfall of the Crypto King, BBC 1 Monday and the iPlayer
Crypto may be the most dangerous conspiracy theory of them all.
It’s not quite up there with QAnon’s involvement in the storming of the US Capitol building, but it’s taken more seriously than the Q Shaman and its reach is global.
Crypto’s largest and original incarnation, Bitcoin has a world-wide valuation of more than $1 trillion, with individual tokens trading at over $26,000 this week. That’s down from an all-time high of almost $69,000 in late 2021.
The inevitable collapse of ‘digital gold’ is probably manageable but will have an unknown effect on the world’s financial systems.
It came closest to mainstream acceptance in the last couple of years when it was represented by the harmless looking and mild-mannered Sam Bankman-Fried, or SBF in the crypto community.
The money revolutionaries like this sort of thing. The CEO of Binance, Changpeng Zhao is referred to as CZ.
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A maths wizard and MIT graduate, Bankman-Fried founded Alameda Research, a crypto trading firm, in 2017, but reached new heights when he launched FTX, a crypto trading platform two years later.
In early 2022, the 30-year-old's net-worth was valued at $26 billion.
Spending colossal amounts of money on PR and advertising, FTX presented itself as the safe way to trade (and make easy money of course) on Bitcoin and other cryptocurrencies.
They bought a half-time Superbowl spot and hosted a PR event, ‘Crypto Bahamas’ last year which attracted A-list celebrities, former British prime minister Tony Blair and former US president Bill Clinton.
The campaigns were fronted by the reassuringly dull Bankman-Fried. He poured money into the American political system, overtly to the Democrats (because, he says, he knew the media would like him for that) and covertly to the Republicans.
His Toyota Corolla, gym clothes, big hair (yes, the statement hair has similarities to other charismatic leaders on either side of the Atlantic), veganism, altruism and apparent lack of ego made him the perfect front man of an industry trying to go legit.
That was until analysts spotted a hole in the accounts and started asking questions about FTX’s balance sheet.
Then CZ tweeted that he was selling FTX’s own tokens, FTT, because of these concerns. This led to the crypto equivalent of a bank run on FTX. The stock was down 80 percent in two hours and within two weeks the company was bankrupt and SBF was broke.
CZ and Binance then offered to ride to the rescue and buy FTX, but pulled out of the deal quickly saying there was a “big hole” to fill.
In December last year, Bankman-Fried was arrested in the Bahamas and later extradited to the US where he faces charges of transferring FTX clients’ money to shore up loses at Alameda Research.
He denies the claims, saying his actions were a mistake rather than a fraud.
Downfall of the Crypto King does a nice job of explaining the crazy ride of a story and captures the wild-west nature of Crypto and its victims.
Sunil Kavuri, who had worked for some of the world’s biggest investment banks and was no novice, explained how he lost £1.8m when FTX collapsed.
Crypto looks brilliant when the token values are increasing, but it’s worth remembering its founding philosophy relies on a conspiracy theory that governments and financial institutions control people through the regulation of money.
Its adherents believe that government backed ‘fiat’ money steals from you with inflation and breaches your privacy.
Its founders wanted a decentralised financial system, freed from government regulation and oversight and the apparent control of what they view as the financial rulers of the world as they strive towards a utopian new order.
