FTX Had A Million And One Suckers

On Tuesday, we learned that Sam Bankman-Fried’s smoldering empire may have ten times the number of creditors in bankruptcy as initially believed. I felt compelled to mention that, because in this instance, that means the number of creditors would exceed one million.

“As set forth in the Debtors’ petitions, there are over one hundred thousand creditors in these Chapter 11 Cases,” an updated filing for FTX Trading Ltd. and a “large number of debtor entities,” said. “In fact, there could be more than one million creditors in these Chapter 11 Cases.”

Incidentally, one million is the same number of Twitter followers who were subjected to 10 tantalizingly grating tweets from Bankman-Fried. The first said “What.” The next eight spelled out “HAPPENED” one letter at a time, and the tenth said: [NOT LEGAL ADVICE. NOT FINANCIAL ADVICE. THIS IS ALL AS I REMEMBER IT, BUT MY MEMORY MIGHT BE FAULTY IN PARTS.]

“I was doing a lot of due diligence on him, but clearly not enough,” Anthony Scaramucci, who, like a million other people, got himself entangled with Bankman-Fried’s shell game, told the Bloomberg New Economy Forum on Tuesday. “It’s very hard to protect yourself against that sort of misrepresentation.”

Yes, it was “very hard” to see it coming. If only someone had spelled it out, OJ Simpson “If I Did It”-style. To a securities lawyer. On a podcast.

Incidentally, Matt Levine did acknowledge that “‘you got suckered by SBF'” might be “a reasonable criticism of me.” He wasn’t responding to my criticism (because no one does in public, although plenty do over e-mails, which I’ve never and would never, share). Rather, he was responding to the Twitter account of @fintwit_news, which, in the Musk era, is the sort of account which gets a verification check mark (maybe it was verified before Musk, I don’t know).

“I do not really see how it pays off in my work,” Levine continued. “It’s not like I went around telling people to buy crypto through FTX or anything.”

That’s uncharacteristically poor logic on the part of someone who’s famous for the deployment of logic in the service of humor (and before that, in the service of M&A and other “God’s work“).

Getting suckered doesn’t typically entail a “pay off” to the suckered. It’s usually the other way around. When you get suckered, you pay. That’s pretty much the definition of being a sucker.

For example, when you get suckered by a fake billionaire pretending to be a champion of the downtrodden American middle-class, you don’t get paid for it. You pay him, if not in the form of small campaign donations, then via the $35 you spent on a red hat.

In the case of the Odd Lots podcasts (plural), Bloomberg “paid” for being a sucker by accidentally promoting Bankman-Fried’s million-block Jenga tower.

“Man, just take the L on this one. You got conned, lots of people did,” one netizen told Levine. “And while you didn’t benefit, SBF sure as sh–t did from the less-than-rigorous coverage he got from lots of people.”

But, again, it was “very hard” to read the cryptographic writing on this wall. Not even “The Mooch” saw it coming.


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5 thoughts on “FTX Had A Million And One Suckers

  1. I have extended family members, a group which excludes my twenty- something aged children (who would never, ever admit it to me- even if they had been), who were suckers.
    But just little suckers, thankfully.
    I tried to warn them.

  2. Bitcoin will be here to stay because people are enamored by Pedigree.
    Gold has(?) Pedigree/fear factor.
    All of the “real” money types had elsewhere to go besides gold during this turbulence.
    In the long term this has actually been helpful.
    I read Matt Levine earlier in the day before your afternoon writing yesterday. Having read you during your Crypto journey made it very easy for me to grasp the sometimes wonky Levine.
    My problem with crypto in general is the same issue that Gold created throughout history. Self referential valuation created out of thin air. Gold may have started as sexual fiat but it impoverished people all over the world and kept them down. The American rebellion against Great Britain was a response to such things.
    Fiat currency, although not perfect, does have more attributes, especially flexibility.

  3. The more people who lose money in this latest crypto flame-out, the better. The amount lost is fixed, even if not exactly known yet, so the more losers, the less the average loss, the broader the education gained, and the less painful the average tuition paid.

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