BlockProf

Bankruptcy for Monopoly Man, Told Ya So, Zebras, the Dev

Nov 23, 2022

FTX went bankrupt

Sam Bankman-Fried was the legendary founder of FTX. Golden boy of crypto. Everyone seemed to think he had a special sauce as a trader and exchange operator. It turns out he was just a massive fraud.

It’s also becoming apparent that his strategy in dealing with Washington was to donate massively, then convince Congress to pass a bill requiring most crypto trade through a CFTC licensed platform (a bill colloquially referred to as the DCCPA). FTX was the only crypto exchange with such a license. And then the hopeful Monopoly Man went bankrupt, and it came out that his internal controls were out of control.

Eric Voorhees had this guy’s number from the beginning, his response to Sam’s policy machinations is worth a read and he is worth a follow:

Erik Voorhees @ErikVoorhees

@SBF_FTX Hey @SBF_FTX I'd be honored if you'd read my response, and to know what you think of the conclusions. moneyandstate.com/blog/response-…

Check out my friend Gabe Shapiro, who leaked SBF’s secret bill, which led to the blowback, which led to a media leak of FTX’s broken balance sheet, and the dominoes all fell. Kinda legendary David v. Goliath story.

_gabrielShapir0 @lex_node

I have long been a believer in transparency and open discussion of the future of cryptolaw. Accordingly, I have obtained a copy of a draft of the notorious DCCPA circulating secretly in D.C. and am hereby making it available to the public.

github.comCrypto-CaseLaw/DCCPA Markup Latest 10.19.22.pdf at main · LeXpunK-Army/Crypto-CaseLawa repository of filings, opinions, etc for cryptolaw cases - Crypto-CaseLaw/DCCPA Markup Latest 10.19.22.pdf at main · LeXpunK-Army/Crypto-CaseLaw

The Pen Is Mightier Than The Urge to Procrastinate

I have a new regular bi-weekly column in Cointelegraph! Here’s my most recent missive. There is nothing sweeter than telling the SEC “I told you so!

Cointelegraph @Cointelegraph

The SEC didn't listen to his advice on crypto custodians. FTX fell apart soon after. This is @JWVerret's story.

buff.lyMy story of telling the SEC ‘I told you so’ on FTXI asked the SEC to take public comments on issues related to cryptocurrency custodians and intermediary conflicts. The SEC declined to take my advice, and FTX fell apart soon after.

Zebras and Zcash

Readers of this newsletter know that the most important issue in crypto for me is privacy, and that my favorite privacy coin is Zcash (one of their symbols is a Zebra, who maintain privacy by being indistinguishable to non-Zebras).

Zcash was developed by the leading cryptographers in the country working with one of the founders, Zooko Wilcox, who was himself a member of the cypherpunk movement in the 90s to defend the right to encryption and who corresponded with the inventor(s) of Bitcoin.

Legit crypto project whose mission I believe in. That’s rare in these days of scams and bankruptcies. So when a spot on the Zcash Foundation Board opened up I ran for it. This week I won on a vote of 59-58! Not the first tight election this November. Can’t wait to work with a team I admire who are building to defend financial privacy. No more important fight than that.