Lyn Alden is a macroeconomist and investment strategist. In this interview we discuss rampant fraud that led to the FTX bankruptcy, the implications for other businesses and legal precedent, and Lynâs current outlook on markets.
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FTXâs empire at the beginning of this year was valued at $32 billion. The whole facade has become a bankrupt mess in a little over a week. Every hour of the past 7 days has seen a new claim of malfeasance that exceeds the depravity of the last. This crescendo has seemingly peaked today as SBF posted cryptic tweets suggesting heâs struggling to comprehend what has happened.
Sam Bankman-Fried was lauded as a financial genius and social revolutionary leading the âeffective altruismâ movement. He was on the front cover of Forbes in October 2021. A glowing Bloomberg profile in April this year recounted his interactions with prominent politicians, investors and celebrities. He openly discussed having his attention drawn to dealing with existential issues affecting humanity. SBF had former Presidents and Prime Ministers in his palm.
However, Bankman-Fried was a Svengali and a fraud. Some Bitcoin maxiâs tried to sound the alarm, but too many people ignored the warning signs and believed the hype. In just 3 short years the 30-year-old managed to beguile not just the industry but also traditional finance. He got a $100 investment from a Canadian pension fund, which one would assume would lead the world in discharging fiduciary duties.
In the aftermath, it all seems so obvious. FTX was essentially run by dysfunctional kids. So, how did this happen? Itâs still very early, and revelations keep dropping as we speak. The truth behind what occurred will take years to piece together. Nevertheless, there are some important lessons that the Bitcoin community rapidly needs to discern and absorb. A political response is inevitable, and many will try to ensnare Bitcoin in this mess.
