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In this short clip, Patrick Bet-David, Michael Saylor and Adam Sosnick discuss Sam Bankman-Fried.
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That the guys in the industry like Yourself the heavy whist were you aware That something was going on at SPF or no Yeah I mean I I think that uh You have the Bitcoin Community opposite The crypto community and then there's Been a low grade sort of boiling Guerrilla war between the two camps for The past two and a half years and Sam is Kind of like the poster child of the Crypto world right Sam makes billions of Dollars on an unregulated exchange Offshore he makes billions of dollars Issuing his own air token he he uh Spends hundreds of millions of dollars Giving to the crypto Lobby and to Politicians and one of their messages is Uh you know Bitcoin is bad for the Environment he uses too much electricity But not to fear we have a you know a Staked air token which does the same Thing as Bitcoin and it's Environmentally friendly so you know we We've always seen that going on and I Think that um you know the Bitcoin Community would say you know there's Something ethically broken about being Able to issue your own unregistered Secure security right they call it Committing the sin of coinery yep Right so so Sam and most of the people In the crypto world were always guilty Of the scent of coinery or pumping And promoting unregistered Securities
And and that was obvious I think Um you know that that was obvious to the Chair of the SEC to most politicians Right that the phrase that pops up over And over again is the vast majority of All crypto tokens are unregistered Securities but I think the Diabolical Twist in the FTX story that none of us Saw coming but it is particularly Diabolical So Sam creates you know uh eight billion Dollars worth of air token with SRM and Ftt then he issues himself locked token Secret locked token marks it up on his Balance sheet by another four to eight Billion dollars and calls at 16 billion Worth of collateral Okay then he goes shopping for a bank to Give him a loan against this well if I Took a billion dollars of Apple stock And I went to a legit Bank Bank of America JP Morgan Goldman Sachs I said a Billion of Apple stock they would say Well we won't give you collateral value For up to the amount you have or five Percent of the daily trading liquidity On a legitimate regulated Exchange So if you show me a security that trades A billion dollars a day and you have a Billion dollars of it I might give you 50 million a collateral value and that Means you could borrow 25 million Dollars against it at 50 loan to value But I'm going to margin call you if it
Moves a tick so it means practically Speaking a billion dollars of that legit Security is probably going to give you 10 million dollars worth of a loan on a Billion on a billion that's one percent Okay right because the the gating factor Is what's five percent of the trading Liquidity of that token or that asset Because if I have to dump that thing in The market I want to sell the entire Position without uh moving the price Sure okay so that's the traditional World on Shore what Sam did was Generated 14 to 16 billion dollars worth Of Solana you know ftt serum and then he Went shopping for a bank to give him a Loan but he didn't want uh you know you Wouldn't get a loan from Goldman Sachs On it no one's going to borrow your Money at least no non-crypto company so What he did was he went to himself he Runs a bank called FTX he applied for a Loan from himself he granted himself the Line for a loan from himself well Secretly applied he didn't tell anybody But he Grant they when they say well Alameda had a margin account and the Margin position was slightly bigger than I thought What he means is oh yeah they pledged a Few billion dollars of error token gave Themselves a 10 billion dollar loan and They extracted Even if he had pledged 15 billion worth
Of air token giving yourself a 10 Billion dollar loan means that you gave Yourself about a hundred X the Collateral value you would have got on a Regulated exchange on shore So what he did was in essence extract 10 Billion dollars of real stuff dollars Bitcoin salable assets and he pledged 10 billion dollars worth of air token Stuff and of course the it's a double Diabolical thing here's here's the Problem so I create a token I have 300 Million tokens and then I basically Trade it with myself like I give it to You and you work for me and you give it Back to me then I lean on it so I lever It up ten to one you know an FTX you Could lever it 20 to 1. then I borrow Your money you're a depositor so I take Your money you have 10 million dollars I Levered up twenty to one I have 200 Million dollars I buy my own token I Drive my token up by five bucks five Dollars times 300 million makes me 1.5 Billion in collateral I post the Collateral and then I withdraw one Billion dollars of you know a hundred Thousand people's money I put it in Alameda and then Alameda Gives a three and a half billion dollar Loan to Sam right to he gave 3.3 billion To either himself or his personal Family Holding company So here's the Diabolical twist I didn't
Just generate 10 billion dollars of an Unregistered security to dump it on the Unsuspecting retail that would take me 500 trading days dumping 20 million a Day right they didn't do that what he Did is he generated a 10 billion dollar In unregistered security and then just Borrowed 10 billion dollars secretly From his depositors And then went and gambled it traded it Spent it lost it how and that is like It's particularly impressive how do you So here's the question you know how you He goes and he raises the two billion Okay and he gets to 2 billion from not Small people he gets it from the best of The best of the best right you got BlackRock you got inside I can you know The names I don't need to give you the Names you know the name so page your Names then they don't get any seeds uh Board seats in return these are very Very smart people who are seeing this Are they just as responsible for the Fall of FTX as Sam Bank manfreda's uh The Bitcoin maximalist would say that The problem in crypto is greed arrogance And foolishness okay Okay anybody that's investing in it is Is either greedy arrogant or foolish so There's three constituencies that got Taken for billions of dollars here the VC investors put two billion dollars Into an offshore exchange The Exchange
Just to be clear was unethical and Illegal from the very beginning it's Illegal to do what they did in the U.S And it's and and it's unethical if you Think I'm front running my customers Issuing a token manipulating the price Of the token dumping it on them if you Did that in stocks you're going to jail If you if you front run it's not it's Absolutely yeah right FTX was its own Regulator its own Market maker its own Exchange the issuer right all all at the Same time this is this is such a con and A hedge fund too much conflict of Interest so but the three constituencies Are the VC that put the two billion into Into FTX they were supporting basically An offshore unregulated Casino you know Running an opaque fashion you know Account are the interest of its own Customers they didn't ask for a board Seat they didn't do due diligence they Were chasing what they thought was Insane gains right FTX is showing a Company that goes from 50 million in Revenue to 500 million in Revenue to a Billion in revenue and they thought they Just had the next great thing so you Know Sam lies that any con right it's Like I think I'm getting a deal that's Too good to be true and the con man is Lying to me we're all lying to each Other and and so that's the first two Billion goes down the drain
There's another 4 billion or something Like that and just loans made by you Know crypto industry I think Alameda Borrowed hundreds of millions and Billions of dollars from Genesis from Three arrows from Voyager from Celsius From you know block Phi Etc so it's like if you start with this Fiction that ft and T is ftt is a real Thing If I create you know again like yo-yo Token and I and I manipulate the price Up to 10 billion dollars by trading two Percent of the float if you think it's a Real thing and I act like it's a real Thing then I pledge it as collateral and You give me real stuff for a air thing And so there's like four billion dollars Of that and they went and they lost half Of that that they you know that was part Of the reason that Voyager and block fi Going bankrupt and the reason that Sam Wanted to bail them out is he didn't Want to actually have the loans called Right he was actually trying to buy Block fi and buy Voyager with FTX equity Which of course is fraudulent and worth Nothing but if I borrowed a billion Dollars from a company and they want the Money back and I can simply give them a Billion dollars of equity take over the Company and not pay the loan back I can Roll the entire fraud forward so that's The second the third is you know they I
This is also diabolical you know FTX Said you know we're built by Traders for Traders and Sam Bragg that they only Charge like three basis points trading Fee and he was 30 times cheaper than Coinbase or much cheaper than binance so He's stealing customers off of the other Crypto exchanges by in essence offering Near free Trading He's not trying to make money off the Trading he's trying to actually get the Assets on his platform because once he Had the assets on his platform he Basically used FTX like his own personal Piggy bank it's like there's 10 billion Dollars there everybody else is going to Get wiped out if uh if their margin Positions trade down 20 percent for a Minute Except Alameda Alameda has God mode they Never get margin called so in an Exchange you know like in in the US it's Illegal to go more than 50 loan to value That means you're kind of like you start With a million dollars you borrow 500 000 you're 1.5 x leverage Okay well FTX started with 100x leverage And then they backed it down to the Responsible 20x leverage which means That you post a million and you can take A 20 million dollars okay who allows That now here's the insane what if I put A billion dollars of air token ftt on The exchange I recognize you and I let
You take a 10 billion dollar bet Like whatever you took a 10 billion Dollar bet now you withdraw four billion Dollars of real cash and you use that to Buy property and buy everything under The Sun so Sam basically he scraped Billions from unsuspecting investors in Silicon Valley who they should have Known better he took billions from Crypto hedge funds and crypto Banks like Blockfi and Voyager they should have Known better and then he took probably 10 billion or more from depositors on His Exchange They they have the best argument it's Like they are staring at terms and Conditions that said he's not going to Re-hypothecate or use their assets and He just you know he lured them with the Promise of cheap trading High leverage And uh you know if you thought well Sam Is manipulating the price of FDT and Serum and Solana and he was right that's Illegal and unethical right your pump It's a pump and dump scheme we talked About this before but if you if you Accept the idea that crypto tokens that Are issued by some offshore you know Dude are okay then you're thinking well I guess I want to go buy some of that And and get behind Sam and Alameda Because they're going to drive the price Up and I think Solana went from you know Three bucks to want to go to 50 you know
It went way up and ftt went to fifty Dollars a token or something so you Could have made a lot of money trading Those tokens but you probably would have Wanted to go to the FTX exchange because You know guess what news flash it's Illegal in the U.S order your future Looks bright hat click over here and to Watch the entire podcast click here take Care everybody
