{"id":510345,"date":"2022-11-15T03:51:10","date_gmt":"2022-11-15T00:51:10","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/uncle-sam-is-playing-the-same-game-as-broke-disgraced-crypto-king\/"},"modified":"2022-11-15T03:51:10","modified_gmt":"2022-11-15T00:51:10","slug":"uncle-sam-is-playing-the-same-game-as-broke-disgraced-crypto-king","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/uncle-sam-is-playing-the-same-game-as-broke-disgraced-crypto-king\/","title":{"rendered":"#Uncle Sam is playing the same game as broke, disgraced crypto king"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2ae65a46350\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2ae65a46350\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/uncle-sam-is-playing-the-same-game-as-broke-disgraced-crypto-king\/#%E2%80%9CUncle_Sam_is_playing_the_same_game_as_broke_disgraced_crypto_king%E2%80%9D\" >&#8220;Uncle Sam is playing the same game as broke, disgraced crypto king&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CUncle_Sam_is_playing_the_same_game_as_broke_disgraced_crypto_king%E2%80%9D\"><\/span>&#8220;Uncle Sam is playing the same game as broke, disgraced crypto king&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n        <\/aside>\n<p>\u201cEveryone can understand zero.\u201d That\u2019s likely to be the epitaph of high-flying investor \u2014 and Democratic megadonor \u2014 Sam Bankman-Fried\u2019s crypto business, FTX.<\/p>\n<p>FTX invested a lot of its customers\u2019 money in the Bankman-Fried-founded company Alameda Research. As The Maine Wire <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.themainewire.com\/2022\/11\/billionaire-crypto-bro-who-gave-democrats-40-million-files-for-bankruptcy-resigns-as-ftx-ceo\/\">explains<\/a>: \u201cAlameda was one of those operations where you\u2019re told just to trust that really, really smart computer geeks are taking a small amount of money and making it into a big amount of money using computer wizardry you can\u2019t understand. But everyone can understand zero \u2014 which is the amount venture cap giant Sequoia Capital is expecting to get back on its mammoth investment in FTX.\u201d<\/p>\n<p>Until its collapse this week, FTX was one of the biggest cryptocurrency exchanges \u2014 and trading platforms \u2014 in existence. Not long ago it was worth $32 billion, and Bankman-Fried himself was worth $26 billion. Now it\u2019s more or less worthless, and Bankman-Fried is no longer a billionaire. He might even wind up worth zero or less than that by the time things are settled. Binance, which was the world\u2019s No. 1 platform, mounted an abortive rescue bid but withdrew once it got a look at the books.<\/p>\n<p>As word spread, FTX customers tried to pull their money out, and in what was basically a cryptocurrency version of a bank run, soon FTX was unable to meet the demand for withdrawals. Regulators in the Bahamas, where the company operated, shut it down and launched a criminal investigation. United States regulators are sniffing around too.<\/p>\n<p>Lots of other people are out a lot of money: The Ontario Teachers\u2019 Pension Plan, Canada\u2019s third-largest fund, has lost $95 million, and that\u2019s just one example. FTX\u2019s collapse is yet another story of crypto shock, following dramatic drops in valuation for various cryptocurrencies like Bitcoin, Ether, etc.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Sam-Bankman-Fried-63-1.jpg?w=1024\" alt=\"The founder of FTX, Sam Bankman-Fried, has seen his net worth go from $16 billion to zero.\" class=\"wp-image-24646063\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Sam-Bankman-Fried-63-1.jpg?quality=75&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Sam-Bankman-Fried-63-1.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/Sam-Bankman-Fried-63-1.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>The founder of FTX, Sam Bankman-Fried, has seen his net worth go from $16 billion to zero.<\/figcaption><figcaption><span class=\"credit\">Bloomberg via Getty Images<\/span><\/figcaption><\/figure>\n<p>Some are saying this is a reason crypto investors shouldn\u2019t store their wealth in exchanges but rather keep custody themselves \u2014 the digital equivalent of storing your money under a mattress. Of course that, like mattresses, has its own risk.<\/p>\n<p>Others are saying crypto exchanges must be forced to keep sufficient reserves to honor all withdrawals, which is asking a lot. Ordinary banks can\u2019t do that \u2014 that\u2019s why they\u2019re called \u201cfractional reserve\u201d banks. They depend on the Federal Reserve and federal deposit insurance to back them up, but there are no such protections for crypto.<\/p>\n<p>No doubt we\u2019ll see a lot of congressmen and regulators jumping to condemn cryptocurrencies, but they have a problem: They\u2019re basically in the same <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>.<\/p>\n<p>Some, of course, are more or less literally in the game with Bankman-Fried. He was the second-largest Democratic donor in 2022, after George Soros, and routinely palled around with top Democrats, sharing a stage with Bill Clinton in the Bahamas.<\/p>\n<p>\u201cHe spent a lot of time on Capitol Hill,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.coindesk.com\/policy\/2022\/11\/10\/washington-dcs-buddy-sam-bankman-fried-has-some-explaining-to-do\/\">says<\/a> Rep. Jim Himes (D-Conn). He had pledged to give $1 billion to Democrats. He doesn\u2019t have a billion to give anymore.<\/p>\n<p>But in a larger sense, the federal government \u2014 call it FGX if you like \u2014 is in a similar game. Few of Bankman-Fried\u2019s investors fully understood what they were investing in and how it worked. They just saw what looked like a booming business and went with it. It was a matter of reputation (and maybe of a scarcity of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ealing alternatives in this year\u2019s financial markets). They hadn\u2019t seen the books and might not have understood them if they had.<\/p>\n<p>Likewise, the United States government operates largely on reputation. Would you lend money to someone whose debt kept climbing with no apparent limit? As I write this, the US Debt Clock places the national debt at more than $31 trillion and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.usdebtclock.org\/\">climbing steadily<\/a>. There\u2019s no plan to bring that amount under control, no realistic plan to pay for it over the long term and no way to fund the federal budget without borrowing. If interest rates on federal debt were to rise to levels we\u2019ve seen in past years, we wouldn\u2019t even be able to make the payments.<\/p>\n<p>Most people think that really smart people in Washington are managing this problem, though the phrase \u201creally smart people in Washington\u201d should give anyone pause. But nobody really understands all the workings of the economy, the federal budget and interest rates. Probably nobody <em>can<\/em> really understand all those things simultaneously. But if it comes to it, everyone will understand zero.<\/p>\n<p>There\u2019s one big difference between FTX and the United States government, though. FTX\u2019s customers were there voluntarily. US taxpayers, on the other hand, have no choice. Ponder that, and hang on.<\/p>\n<p><em>Glenn Harlan Reynolds is a professor of law at the University of Tennessee and founder of the InstaPundit.com blog.<\/em>\n                        <\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/11\/14\/uncle-sam-is-playing-the-same-game-as-broke-disgraced-crypto-king\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Uncle Sam is playing the same game as broke, disgraced crypto king&#8221; \u201cEveryone can understand zero.\u201d That\u2019s likely to be the epitaph of high-flying investor \u2014 and Democratic megadonor \u2014 Sam Bankman-Fried\u2019s crypto business, FTX. FTX invested a lot of its customers\u2019 money in the Bankman-Fried-founded company Alameda Research. As The Maine Wire explains: \u201cAlameda&#8230;<\/p>\n","protected":false},"author":1,"featured_media":510346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/11\/20221114_zaa_n230_019-e1668471436197.jpg?quality=75&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[135234,135539,76127,10701,87204],"class_list":["post-510345","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ftx","tag-11-14-22","tag-cryptocurrency","tag-democrats","tag-u-s-debt"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/510345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=510345"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/510345\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/510346"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=510345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=510345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=510345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}