“The Brady ‘Bill’”: Cryptocurrencies’ Meltdown.
By Gene W. Edwards.
Tom Brady, the football great, and his now ex-wife, Brazilian hottie-model Gisele Bundchen, have a combined net worth of $650,000,000.
Had.
We don’t know how much they invested and lost so far in the bankruptcy of FTX, but their playing position is not pretty! Because both of them held promotional and executive positions in FTX, a cryptocurrency brokerage — and the people and companies who believed in them just collectively lost billions of dollars — the lawsuits the Bradys face could run on for years, ruin them! Brady should probably volunteer for one of those Mars missions where you live on Mars and don’t come back. It’s Deflategate all over again, this time a money ball.
In short, their net worth, in the not-so-distant future, will probably be less than zero, like that of woman who sued Johnny Depp — Amber Heard — after all the penalties against her were levied in those two’s endless suits and countersuits.
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Sam Bankman-Fried (pronounced “Freed” ran FTX — into the ground. Was sacked. He’s only a childish 30 years old (March 6, 1992).
From his bio on Wikipedia, we find this essential info:
“Samuel Bankman-Fried[1] (born March 6, 1992[2]), also known by his initials SBF,[3] is an American entrepreneur, investor and founder and former CEO of the cryptocurrency exchange FTX,[4][5][6][7] FTX.US[8] and quantitative cryptocurrency trading firm Alameda Research. FTX experienced a crisis in late 2022, which led to a collapse in FTX’s native cryptocurrency, FTT. Amid the crisis, Bankman-Fried announced he would wind down operations at Alameda Research and resigned as CEO of FTX, which filed for Chapter 11 bankruptcy.[9][10]
“Bankman-Fried’s net worth peaked at $26 billion.[11] In October 2022, he had an estimated net worth of $10.5 billion.[12] However, on November 8, 2022, amid FTX’s solvency crisis, his net worth was estimated to have dropped 94% in a day to $991.5 million, according to the Bloomberg Billionaires Index, the largest one-day drop in the index’s history.[13][10] By November 11, 2022, the Bloomberg Billionaires Index considered Bankman-Fried to have no material wealth.[14]
“Before Bankman-Fried’s wealth disappeared in November 2022, Bankman-Fried was a major donor to Democratic Party candidates.[15][16] He was the second-largest individual donor to Joe Biden in the 2020 presidential election, personally donating $5.2 million,[17][18] and he donated $40 million, mostly to Democratic candidates, during the 2022 U.S. midterm elections.[19]”
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We are coming, pretty soon, to the real story, the one the media refuses to cover. The son of two Sanford law professors, Sam B.-F. was a child prodigy in math. He hit the equity (financial) markets running! As you can see from his bio and success, he had the rep and experience of being quite competent in currency trading, etc. — as an individual. He also appeared to also have just the right credentials to run a giant cryptocurrency brokerage firm with its own crypto coin, the FTT, and another investment firm also. All’s well and good so far.
What happened next was a “Bernie Madoff!” A made off.
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Too many men (and women) on the field. Penalty phase. It’s called borrowing money from Peter to fund Paul so Paul can gamble with the money (gamble away the money in bad trades). Too big for his young britches, -Fried, now a former bank man-, without clearing it with anyone, moved over four billion dollars of FTX capital and depositors’ equity from FTX over to his other company, Alameda Research. This amounts to blatant “Madoff” fraud, as seen from down the line, seen in retrospect. Sam Fried could go to prison for the misappropriation of depositors’ funds, which amounts to embezzlement or a Ponzi scheme. He must now run the gauntlet of the legal system, from beginning to end.
I’ll cut to the chase. Neither Bankman nor his execs knew what they were doing. His investment family over at Alameda lacked his trading skills, and his managers there were green and incompetent. Alameda Research started bleeding money. In all, they lost 10 billion dollars. His four B infusion didn’t help.
Business interests noted the money move to Alameda, its poor market positions, resulting low capitalization, and FTX’s now lack of liquidity as well. What ensued was a run on the “bank”: FTX. Customers sold their cryptos and closed their accounts, and they sold their FTT coins. Yes, a few got out early. The others were left holding the bag. The snipe had flown! When all that could be were paid off, there was still an enormous shortfall!
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As with the bankruptcy of Lehman Brothers on September 15, 2008, resulting in the subprime mortgage crisis that cost the world trillions of dollars, the collapse of FTX, the debasing of its FTT cryptocurrency, and Alameda Research being in hot water cascaded through the markets like broken China, left by its bull (aka bear, Sam Bankman-Fried himself). In its way, FTX was worse than COVID-19. There is no shot for being dumb, or stupid(er), or ignorant, or uninformed: naïve.
There is no vaccine for worst case scenarios, or trusting others just because of their high visibility, success, and good behavior — up to a point — or the domino effect of financial collapse when no one sees it coming. A Madoff shot does not exist. Tom Brady and Gisele Bundchen probably lost most of their vast fortune and are on track to lose all of it in lawsuits. Even Shaq O’Neill got burned in FTX/FTT, who has a fortune of 400 million dollars and makes 60 million dollars a year as an entrepreneur and high-tech guru investor.
But I promised you more than the apogee of Tom Brady’s 2022 football career. The game is even worse than his five won/six lost season so far, and the loss of his marriage in 2022. November’s cryptocurrency crash brought an end to Tom Brady’s world. He is, from all appearances, now a pauper. He left a lot of receivers empty-handed.
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The entire cryptocurrency marketplace is now in crash and burn status. I only trust two cryptos, Bitcoin and Ethereum. I only trust the crypto brokerage Coinbase, and I don’t even trust those three more than a plug nickel. Don’t play with scared money . . . and don’t put any money into the crypto marketplace that is not disposable income, the kind of money you’d take to Las Vegas, expecting to lose it, delighted if you get in and out in time.
The top 70 cryptos, of the 9,000 created, recently had a value of one trillion dollars. The cryptocurrency markets had a market cap (total crypto coin value) of over three trillion dollars at the turn of the year. Now they’re down to under one trillion, all of them together (the 9,000, including the 70). As for Bankman-Fried’s FTT coinage, it dropped from over $60 a crypto “coin” one year ago to today’s $1.43, 1/42nd as much. Imagine buying $10,000 worth of FTT virtual coins and ending up with $70 worth?
The question is “Why?” And the answer is: Sam Bankman-Fried. What possessed him to go clandestine and move over 4,000 million dollars (4 billion) over to his Alameda Research, which he almost solely owned, a firm making all kinds of stock and crypto trades (arbitrage, etc.)?
Was it greed? Over-ambition? Under-caution? Incompetence? Playing others for fools? Financial psychopathy? Fear of failure? All of those? Sam seemed to be the Elon Musk of the cryptocurrency world in wealth — at age 30. He was the toast of the entire cryptocurrency marketplace, could do no wrong, was entirely trustworthy and dependable until . . .
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But we still haven’t gotten to the big story, the one the media won’t report. It will be hard to obtain the numbers, but here’s the big picture. We gave Ukraine billions of dollars to wage defensive war against Russia. Ukraine then turned around and invested a bunch of it with Bankman-Fried in order for Ukraine to make nice money on their gift as well as have a safe holding place for its war chest. When FTX collapsed, and its FTT coinage as well, so did part of Ukraine’s defense money, part of its ability to regain national status as part of the free world rather than submit to being savagely overrun.
Worse, “everyone” trusted Sam because he was the darling of the liberal left. Only George Soros donated more to the Democrats. As you saw above from -Fried’s bio, he gave over five million dollars to Biden and 40 million in all in political donations in 2022 — most of it to Democrats — so they considered him to be their darling, their rich uncle, their sugar daddy.
Maybe the money he gave Biden pushed Biden over the top to be elected? Maybe his money assured the Democrats their keeping the Senate? The trouble is, many liberals, Democrats, and liberal causes used FTX as their only crypto broker or bought FTT crypto coins and lost their shirt — all that in November soon the election! Now they’re left high and dry. Because they were all starry-eyed from Sam Bankman-Fried’s charity and political altruism, they didn’t check him out, just like so many such blinded by idealism acolytes did not check out Madoff. When the money sounds too good, run for the door. Yell “Fire” and leave the theater.
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A fool is born every minute.
Love (not smoke and mirrors)