FTX

“The key takeaway is like when leverage is involved, things just move so, so, so fast... Quite a bit different than traditional venture world, where when a company is dying, it dies over two, three years often, sometimes more.”

“I think there is a real philosophy that's some sort of, like, neo-Buddhist utilitarianism that underlies the, like, technological developments in Silicon Valley, and it's interesting because you see it, like, Will McCastle gets involved with SPF and FTX. There…”

“Huge chunks of Anthropic stock were sold at auction to any investor who wanted them, including people who are super, super unaligned.”

“I will say that now our due diligence process, we definitely, like, check bank balances and do, like, the most basic due diligence that probably would have, you know, turned stuff up on, on this.”

“Now, if they had never done that FTX would still be around and they'd probably be the biggest exchange in the world.”

“I think that the approach we took from the start was that financial services or healthcare, I think you can't ask for forgiveness. I think there's a big difference between losing people's money, see what goes wrong, like an FTX example that can go very wrong w…”

“There was one part of FTX that didn't implode with the rest of it. And that was their investment in a swaps trading platform called ledger X was, which was supervised by the CFTC and examined and they had they had their accounts segregated and all that. So no …”

“I was actually at a dinner with some of the FTX investors about two months before it blew up, and I said, and I asked all the questions that are in the red flags, and they were aware of all of those risks but, you know, didn't have a way to manage it.”

“There is more bad behavior in private markets than I think people realize. FTX, it's very public, but these companies, they're not filing always audited financials. They don't have the controls. Particularly when something starts to go bad, there's a lot of ba…”

“So we actually raised the seed round summer of 2022. It was a five million dollar seed round with FTX.”

“The deal was finalized and the transfer was done in July, 20, 21. And this is like a full year and a half before they had issues.”

“So when FTX imploded, Ledger X didn't really miss a beat. And the, they had segregated accounts. So every customer's assets were accounted for. And you know, nothing as far as I know was lost. And so then Ledger X has survived and now you know, was sold out of…”

“Caroline Ellison has been released from federal custody. She, of course, was involved in the FTX Drama that erupted a few years ago.”

“So end of 22 FTX happens interest rates go up, you know, all the podcast advertising market, you know, falls off a cliff. Our revenue dropped 40%.”

“With Sam Beckman-Fried, I was a year into it, and I did not know what I was gonna do with it until it blew up”

“20, 20, 23 is when we launched our APIs. 2022 is when we start, Sean and I started the company. And raised money, and then immediately after we raised money, Terra Luna happened, and then the whole space was nuked, and then FTX happened, and it was nuked again…”

“He had owned enough assets that would make all the creditors whole.”

“The whole pitch on FTX with Scott was, which is, you're buying a stake, you're buying 20 cents, you know, you're gonna get 30 cents in cash back, plus you have all this crypto sizzle.”

“I mean, Sam was giving out 10 year contracts to people, guaranteed 10 year pay contracts, you know, like million dollar contracts to like salary employees, a little bit like the, you know, like AI, you know, meta thing.”

“Ask Larry David, who got ten million dollars, do an FTX commercial.”

“You know, we were fortunate enough during, you mentioned FTX earlier, to be awarded during the bankruptcy a bunch of stock. We bid on it. We went through the whole process, bid on the stock, bought a big chunk, and now the company, look, the company is, in my …”

“When you look at FTX, their positions in Anthropic and Cursor actually would have saved them if they had the time to prove that out and they hadn't done the commingling. That would have saved their financial performance with those two investments alone.”

“The core business he also had was a pretty impressive and good business. I mean, the core exchange worked fine too. It was all the weird shit on top. It was all the commingling.”

“I don't think Rory or I would, I'll defer to Rory, but I think someone will fund him. He's smart as Rory, Rory said, like he showed the upside as well as the downside. I don't know if there's a lot of morality in the business. I think someone will give them ju…”

“We had this big partnership with FTX. That's when our market cap reached its all time high. Was when we announced that partnership and they wrote us a hundred million dollar convertible check into the company.”

“I'm in deals with FTX now, and they've been an absolute fucking nightmare, to be blunt. Demanding cash back, really being very difficult.”

“That note was not due until 2026. And I think it was last year, January, we paid them back seventy one million dollars as opposed to the, you know, at the time of repayment would have been probably 109 or one hundred and ten million.”

“I will be shocked to see if he serves this whole sentence. He has, like, very strong proof that if you donate enough money to the right people, you can kind of bend the world around you, and I sincerely hope he stays in jail for a very long amount of time.”

“So by the time we went out to market, so we raised in late 22 Like, right after Terra, but before FTX, so like, in between two shitshows”

“And so I think now the people who lost money, they're getting something like a 125% of their money back, which is not bad for a Ponzi scheme that you were a victim of.”

“Scott said the numbers. He goes, I bought 250,000 dollars worth and I sold, I bought a million dollar claim for two 50 and I sold it for 90% of the million. So he like tripled his money.”

“So they sold their stake for eight hundred million. So they put in 400 or five hundred million and they sold it for 800 or nine hundred million in the liquidation. And so it wasn't the Anthropic investment that really paid off.”

“What happened was like over the course of a year, there were like, you know, a whole bunch of failures in the space and their company was impacted by it, indirectly impacted by FTX and so on. And that essentially just, like, nuked the competitive landscape for…”

“When we were first building the product, FTX had a bunch of APIs that nobody really knew about, but we kind of discovered that made it easy to convert between stable coins.”

“Why is a guy running a hedge fund and running one of the biggest exchanges at the same time? Like, it just. Makes zero sense. Like, it just seems like very wrong.”

“He actually had a business that would have made him a billionaire many times over. That was, like, the scam with FTX wasn't that the demand and the customers were fake. The demand of the customers were real. It's just that he took the customer money and gamble…”

“If he had followed the same rules for crypto that Japan did, FTX would still be in business. Sam Bankman-Free might still be in jail, But FTX, three euros capital, they, they'd still be in business, because he did the wrong thing.”

“One of the things that helped FTX take off back then was Sam Bankman freed was one of the first to put Political bets on his platform, I think in 2020. And it was a big accelerant for FTX was letting people bet on election, election information back then. And …”

“Where at the time that we had measured and quantified it, there were about a billion in revenue, about six hundred million in EBIT.”

“And I think the other important thing to note is that during the volatility and downturns, when you had the failure of FTX and BlockFi and Celsius, all of these blockchain services worked perfectly. I should say the good ones, like Compound, Aave, Uniswap, Mak…”

“And I would separate Theranos and FTX, which were just straight up fraud from something like WeWork, which was a story about what it could become, but it just became the most egregious kind of, I think Scott Galloway calls it yoga babble where it's like, no, t…”

“If you had left your Solana at FTX, you're gonna get 16 dollars per token back, and that apparently was the price at the time that they went under.”

“FTX customers lost eight billion, investors lost 1.7 billion, and lenders lost 1.3 billion.”

“FTX is also selling the majority of its stake in Anthropic. For eight hundred eighty four million to Mubadala, the sovereign, one of the sovereign wealth funds from the UAE, and other investors”

“In early February, the trustee said they now expect a hundred percent Payment back to the depositors and all the accounts and all the excess will go to the shareholders and FTX, all the preferred holders that invested in the stock.”

“I think, you know, I'd like their setbacks, like in, in crypto, the stuff that happened two years ago with FTX and a bunch of scandals, I think, set back the space a couple, you know, maybe a couple of years.”

“And so what we've seen for a long time is that that ambiguity has created a disincentive for good entrepreneurs and incentive for bad actors. And I think has in many ways contributed to a lot of the things that happened, like for example, with FTX and other sc…”

“Sam was a genius when it came to the things he had to know for FTX and crypto. So for example, Tom Brady was a like sponsored by FTX, right? Sam could have told you every single thing. About Tom Brady. Could have told you his stat line, everything about him, b…”

“It's like that FTX Super Bowl ad Felt very inauthentic to me. It was Larry David and Tom Brady or something, and it was just, it was clearly very concerned with what other people think, and just trying to get the maximum attention in the simplest way.”

“The original reason we passed on the FTT seed round in March, April, 2019 was because we were like, Hey man, no separation of church and state. You can't run Alameda and FTX. People are not going to trade here. And we were like, okay, pass. And then we passed.…”

“There, we know now there were four people who knew. Sam, Caroline, Nishad, and Gary. No one else knew. When you keep the circle small, like, you can keep information hidden, and explicitly, in this case, the information was, go make arbitrary changes in the da…”

“Richard on, on, my team, my partner, tweeted out on October 13th that Sam was working behind closed doors on a bipartisan bill that would have been very good for FTX, but bad for DeFi, right? And that tweet went viral. Obviously, a lot of other stuff happened …”

“I think regulating AI, quote unquote, is the wrong level of abstraction. To me, that's like saying, well, look, you know, FTX did all this fraud with spreadsheets, so clearly we need to regulate spreadsheets.”

“And like, I think we just, everyone should be on the lookout for more of these things to kind of fall. And it feels like the beginning of something more than the end is sort of what I feel.”

“A place to gamble, which is what Sam Bankman free did. He created a giant casino and you know, and then on top of that committed fraud.”

“The people that got sucked into this perception game that FTX was playing that, you know, the politicians, the regulators, the investors, they all now are trying to just sweep it under the rug and say, oh, I didn't know about this financial fraud. It wasn't ju…”

“Alameda was their investment arm that was basically investing in these token projects. Then FTX, the exchange, was listing these tokens, hyping up the tokens to their users.”

“This is one of the largest financial frauds that we've seen in a long time.”

“I think that may ultimately not be super relevant to Sam Bankman-Fried's legacy. I think it's hard to overcome the perception in the public eye that he was a fraudster, which, you know, he was regardless of whether or not customers are made whole.”

“Alameda Research also traded on the FTX exchange, and they served as a market maker there, and they were given the ability on that exchange to draw down a line of credit such that they could have a massively negative account balance on FTX. And that's somethin…”