Embark on an audacious exploration into the highs and lows of Sam Bankman-Fried's cryptocurrency empire, as we reveal the brainy MIT grad's journey from billionaire to criminal defendant. From the ingenious arbitrage strategies of Alameda Research to the controversial collapse of FTX, we peel back the layers of a financial saga that's stranger than fiction. Brace yourself for a whirlwind ride through the entangled web of digital currencies, where overnight millions morph into courtroom battles and the line between genius and folly becomes alarmingly thin.
We're setting the stage for a deep dive into the volatile world of high-stakes crypto trading, uncovering the shadowy corners of market manipulation and the startling crash of an industry giant. You'll be riveted by tales of how a cryptocurrency exchange and its sister trading firm intertwined to disrupt the market, and the ensuing chaos when their strategies unraveled. From the psychological allure of non-fungible tokens to the public's embrace of Bitcoin, we're laying bare the human stories behind the digital revolution.
In our finale, we stand at the precipice of understanding as we witness the legal entanglement of Sam Bankman-Fried – from his arrest and hefty bail, to the political donations that paint a portrait of a controversial figure navigating the complex world of finance and influence. We then grapple with the concept of wealth, juxtaposing the staggering dimensions of billions against the more familiar scale of millions. So, strap in and tune in to "Ol Dirty Basement" for a tour-de-force episode that melds vintage cinema nostalgia with the gripping reality of a true crime thriller.
Sounds:https://freesound.org/people/frodeims/sounds/666222/ Door opening
https://freesound.org/people/Sami_Hiltunen/sounds/527187/ Eerie intro music
https://freesound.org/people/jack126guy/sounds/361346/ Slot machine
https://freesound.org/people/Zott820/sounds/209578/ Cash register
https://freesound.org/people/Exchanger/sounds/415504/ Fun Facts Jingle
Thanks to The Tsunami Experiment for the theme music!!
Check them out here
SUPPORT US AT https://www.buzzsprout.com/1984311/supporters/new
MERCH STORE https://ol-dirty-basement.creator-spring.com
Find us at the following
Embark on an audacious exploration into the highs and lows of Sam Bankman-Fried's cryptocurrency empire, as we reveal the brainy MIT grad's journey from billionaire to criminal defendant. From the ingenious arbitrage strategies of Alameda Research to the controversial collapse of FTX, we peel back the layers of a financial saga that's stranger than fiction. Brace yourself for a whirlwind ride through the entangled web of digital currencies, where overnight millions morph into courtroom battles and the line between genius and folly becomes alarmingly thin.
We're setting the stage for a deep dive into the volatile world of high-stakes crypto trading, uncovering the shadowy corners of market manipulation and the startling crash of an industry giant. You'll be riveted by tales of how a cryptocurrency exchange and its sister trading firm intertwined to disrupt the market, and the ensuing chaos when their strategies unraveled. From the psychological allure of non-fungible tokens to the public's embrace of Bitcoin, we're laying bare the human stories behind the digital revolution.
In our finale, we stand at the precipice of understanding as we witness the legal entanglement of Sam Bankman-Fried – from his arrest and hefty bail, to the political donations that paint a portrait of a controversial figure navigating the complex world of finance and influence. We then grapple with the concept of wealth, juxtaposing the staggering dimensions of billions against the more familiar scale of millions. So, strap in and tune in to "Ol Dirty Basement" for a tour-de-force episode that melds vintage cinema nostalgia with the gripping reality of a true crime thriller.
Sounds:https://freesound.org/people/frodeims/sounds/666222/ Door opening
https://freesound.org/people/Sami_Hiltunen/sounds/527187/ Eerie intro music
https://freesound.org/people/jack126guy/sounds/361346/ Slot machine
https://freesound.org/people/Zott820/sounds/209578/ Cash register
https://freesound.org/people/Exchanger/sounds/415504/ Fun Facts Jingle
Thanks to The Tsunami Experiment for the theme music!!
Check them out here
SUPPORT US AT https://www.buzzsprout.com/1984311/supporters/new
MERCH STORE https://ol-dirty-basement.creator-spring.com
Find us at the following
Thanks for tuning in to the Old Dirty Basement. On this week's episode we're covering Sam Baikman Freed.
Speaker 2:Yeah, you know, everything all settled, all things said and done. I think this is just a story about a guy who was out of his depth, didn't know what he was doing.
Speaker 3:You know, this guy had enough money at one time to put dollar bills four times around the world 26 times, four times, yeah, oh yeah, tales from the crypto 26 times, four times, yeah, oh yeah.
Speaker 1:Tales from the Crypto with. Zap the Crypto Keeper. Well done, yeah. So we hope you enjoyed the podcast. Speaking of which, if you are, leave us a five-star rating On Apple, a written review, and sit back, relax and enjoy. Sam Bankman Freed.
Speaker 5:This is the old, dirty basement Home to debauchery, madness, murder and mayhem. A terror-filled train ride deep into the depths of the devil's den.
Speaker 1:With a little bit of humor, history and copious consciousness.
Speaker 5:I'm your announcer, shallow Throat. Your hosts are Dave, matt and Zap. I love you, matthew McConaughey.
Speaker 3:All right, all right, all right. Hey, this is Dave Matt and Zap. And this is Dave Matt and Zap, and welcome to the old dirty basement.
Speaker 1:Where every week we cover a true crime murder or compelling story.
Speaker 3:So sit back, relax and comprehend. Hello, hello and another hello, trace, hello-ays. Yes, trace, hello-ays. Yes, trace, hello-ays. I like that. That's German for three amigos. Indeed, nice, that was awesome. How's everybody doing? Can't complain man. Yeah, it's not bad. Yeah, now the traffic Traffic's out.
Speaker 2:Traffic is awful Around these parts. You've got the construction on 83, which will be long dead before that's finished.
Speaker 3:I can promise you that yeah oh yeah, for sure we'll be driving in our olden age as that project is being completed.
Speaker 2:Conversely, there is the opportunity for all cars to be flying by then and we wouldn't need the roads right.
Speaker 3:What I don't understand is all the off ramps are making the. There's enough off ramps. That's. That's what causes the jams and the congestion, like either that or just stupid people, yeah, but they're just like I'm making more off ramps onto like one major artery. I don't even know. It makes no sense.
Speaker 2:You want the other way today, 81 well, there was, so I love the 81. So, coming from my neck of the woods, 81 is banging like and it's quick. It is quick, it's wide, three lanes both ways.
Speaker 3:It's awesome uh aren't they making them four now, four or five, I think five on each side. I mean 81 is pretty solid the way it is, it's okay.
Speaker 2:83 is the one that they're banging up into four whatever boat ways, but there was an accident on 81 and it basically closed the road all three lanes, so yeah, you won't be traveling in the future. Anyhow, everybody will be vr that's right at home, and or it could teleport here yeah, and paying with everything with cryptocurrency. Oh, what a good trip. Like I like what you did there. Good segue, yeah. So, speaking of crypto, you can pay in crypto. Today, we'll be talking about sam bankmaned.
Speaker 3:Sounds like a made-up name. Like when I looked it didn't even sound real. Yep, he sounds very like money-like Bankman Freed.
Speaker 2:So that, of course, is a hyphenated last name given to him by his birth mother who, along with his father they are both, I should say. His parents are both professors at Stanford University, allegedly Well. Interestingly enough, they're both professors of law or business or some it's some element of law at Stanford, which is amazing, considering what happened with their kids.
Speaker 3:So good genes, though for the young Bankman Fried Good genes.
Speaker 2:Dude, this kid's a smart kid, like really smart kid. So, speaking of this kid, sam Bankman Fried freed, let's just jump on in, shall we? So this cat was born on march 5th 1992. Young and gentle reminder, the three of us were in our sophomore year of high school when this guy was born. Wow, okay, don't want you to keep that in mind as we go through all of this. So, as we were just talking, this guy is a really smart kid like he, and he always had a flair for mathematics, as chance would have it. So, as, uh, his years went on, he ended up graduating with a bachelor's in physics. Uh, with a minor in mathematics from mit in 2014 yeah, mit you're pretty smart.
Speaker 3:Yeah, yeah, that's I went to uh hac, which is just kind of like mit just like different, different like letters yeah, still cool version, yeah I like that that's.
Speaker 1:Is that massachusetts institute of technology correct?
Speaker 3:yeah, yeah that's like I think. I think the acceptance rate is like four percent, so it's something insane.
Speaker 1:I don't even think it's up to ten percent that's where, like your uh val kilmer character would would end up from like real genius 100 people on those lines absolutely do we have anybody from our class that went to mit.
Speaker 3:I think they have some harvard, I don't know if there's any harvard.
Speaker 2:Um, I don't know if any mit. I know that mit is one of three of these particular types of schools, like these schools that are made specifically for this research and and growth and science and shit like that. The other one, I think, is, or the other two one is Tuskegee and the other one isn't. It's not Cornell, is it? Nah, whatever it is, it's uh.
Speaker 3:Tuskegee, wasn't that like the airmen? Yes.
Speaker 2:Pilots from world war two, smart people's schools, the black pilots from old. Yes, yes, black pilots. Well, we're two. Why, jesus? All right, so this guy? Uh, after college, his first professional gig was trading international etfs at jane street capital. So for those of you out there, I'm sure you've heard the term etf, but everybody has.
Speaker 2:Well in case, exchange traded funds. Now these are very similar to mutual funds. The major difference is the open market trading, which is just on an exchange during the day for ETFs, versus aftermarket trading and settling for mutual funds. That's really the big difference. Everything else is so close. Some will argue oh, fees this or costs that, or embedded rates that. No, the the difference is just with an etf, you can buy, you can day trade with an etf so he started out in like a traditional financial yeah, like nothing okay absolutely.
Speaker 1:This is nothing to do with the crypto or anything?
Speaker 2:not at all.
Speaker 3:Nope, he's just on the market man, he's just, he's corn is up 2.5, that's exactly right. Okay.
Speaker 2:Exactly. Frozen orange juice yes, concentrate what?
Speaker 3:movie is that from Anyone? Anyone Trading Places Exactly.
Speaker 2:I want to guess that, yeah, frozen orange juice concentrate Futures, futures, right. So let's see After a little bit. Let's see he started there in 2014. He ended up leaving Jane Street Capital and with half a million dollars of his own money, which he got actually as a parting gift his severance package when he quit. He founded Alameda Research in September 2017 with Tara McAuley. There you go.
Speaker 3:I thought it was McAuley. Mcauley Is that what it is. I'm just saying it to be a dick. Is it McAuley? I'm just saying it to be a dick. Is it Mac-a-lay? I don't know, it sounds like Mac-a-lay. It's Mac-a-lay, mac-a-lay, fuck, like what's that stuff that our moms used to?
Speaker 2:buy Oil of Olay Mac-a-lay, mac-a-lay, uh. So, as a chance would have it, he met this broad at the center for effective altruism, you know he was actually a donor, anyone at all?
Speaker 1:what's altruism?
Speaker 2:but the idea of altruism.
Speaker 3:So altruism is like there's a character on um mr spock.
Speaker 2:Oh okay, so altruism is is essentially the. The idea that mr spock always puts out is the, the. This is by Mr Spock. I'm talking Star Trek, not the doctor, right, right, right. So Mr Spock always says you know, you have to make this decision. Does the good of the few outweigh the good of the many? Or, conversely, does the good of the many outweigh the good of the few or the one?
Speaker 3:Altruism is every thought, every effort you do anything you do has to do with the good of the people or the good of the many, not yourself.
Speaker 1:That's like what Rain man had?
Speaker 3:He had altruism, that's right, he had altruism, mild altruism, definitely Kmart. He was smart, kind of like this guy.
Speaker 2:Right Kind of Now, this altruism stuff, this can get pretty dangerous to the extent of you. You ultimately end up having people that just think that they know it all and they know what's best for everybody. So then not only are they it's not necessarily just charity to give money away, it's instead I want, because I think I'm so much smarter than everybody else and I think that I can make their decisions for them so much better, because all they keep doing is fucking shit up. Well, here's what they need to be doing, here's what they should be doing, and then it just goes.
Speaker 2:You know bananas from there becomes like political, then well, not well even more than political, like I don't know, life controlling oh yeah, for lack of a better word, but anyway. So this guy, good old sam, joined the center for effective altruism as the director of development for all of two months. He worked there, from October to November of 2017. And within those two months, he and McAuley or McAuley raised $170 million to fund Alameda Research.
Speaker 2:It was just a company built to trade cryptocurrencies, so when I say they raised $170's, you're looking for venture capital.
Speaker 3:But don't you think a lot of those things that they um, the altruism. That's something that I think people with money come up with to get funds to give to themselves, Sure Cause people don't know. And then it's something that I think people that have money look at these things. It's like, oh, altruism, I'll give to that. And then when people say, oh, you're giving money to altruism, that's great, and you have to be on the know to know what you're giving money to. So it just makes you look smarter and more rich.
Speaker 2:Yes, it's very self-fulfilling.
Speaker 1:Okay, for sure, yeah, and a way to get like a tax write-off head but then then you guys are just laundering the money to yourselves.
Speaker 3:Maybe, I don't know ish ish, okay.
Speaker 2:Well, let's see a few months later, in january 2018. Uh, through alameda, research bankman freed, organized and arbitrage trade where up to 25 million dollars of crypto was being bought and sold every day. Okay, show of Everybody know what arbitrage is.
Speaker 3:No, I was going to ask you that. Okay, sounds great Arbitrage, is that French Arbitrage?
Speaker 2:Arbitrage.
Speaker 3:It's like sabotage. That'd be a good band name Arbitrage.
Speaker 1:Arbitrage I like it.
Speaker 3:Actually in a former employee. All Two counts of arbitrage. Is that a roast beef sandwich? Arbitrage.
Speaker 2:Wait a second A roast beef sandwich.
Speaker 1:Yeah, arbitrage.
Speaker 2:That's the arbitriage when you have to get the thing to bring your heart back to life.
Speaker 1:Oh, yeah, yeah, one of those things the paddles and shit, defibrillator or whatever. You need a defibrillator.
Speaker 2:That's the Arby's triage, also known as the arbitrage.
Speaker 3:Arbitrage is just trying to set you up for failure.
Speaker 2:Right, maybe. So arbitrage, the act of arbitrage is buying and selling securities, currency or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset. So well, so when I was dealing with arbitrage it was in in government funds and government bonds actually. So essentially with that arbitrage it was a matter of because it was government money or government funds. I like government cheese. You couldn't. You couldn't take monies that were earmarked for this, that the other thing, and start earning more in, like if monies were earmarked to do this, that the other thing, you couldn't take that money. In the meantime, make a good spread on something, go make some wild ass investment greater than essentially either what was projected, what you're going to be paying out conversely to that interest, if that makes sense, if not arbitrage, it's a thing listen all y'all.
Speaker 1:This is arbitrage also thought of that as well yeah, that's what I was thinking you see why I had trouble like researching this guy. You're doing fine no, you're doing fine, I don't even know these words try to find like the uh kids version yeah, you only have a cliff notes for this, so somewhere, so here's the greatest example because we're talking about it.
Speaker 2:We're talking about Sam Bankman Freed. So the arbitrage in Alameda Research's instance is a thing where Sam had discovered that Bitcoin was trading at 10% more in Japan than it was in America. So here we are. We are talking about buying and selling the same security in different markets in order to take advantage of the differing prices for that same asset.
Speaker 2:So what this cat found was that, over in Japan, because there was this huge demand for it, like a ridiculous demand for this stuff he was able to take and basically buy or, I'm sorry, sell, sell it there and the cash that he would take he would come back to send the money back to america, buy it in america, send the cash over to japan, sell in japan, buy in america, sell in japan easy money. When I say send, I'm not talking fedex and I'm not taking, talking about sending a slow, but I'm obviously talking about electronic, you know, currency transfer, all of that shit. He was able to take advantage of it because, in fact, so many other traders, it went unnoticed with so many others because everybody else had their eyes on a bigger gap, which was in Korea. So the hype for Korea, just like K-pop. The demand for Bitcoin over there, which was called the kimchi Kimchi's delicious. The demand for Bitcoin over there, which was called the kimchi oh the kimchi, kimchi's delicious it was like the kimchi bump or the kimchi Is that what it's?
Speaker 1:actually called. Yeah, it is. I heard about this part. It's called something.
Speaker 2:Yeah, it's called like the again, like the kimchi extra or the kimchi fee or some shit like that, whatever fee or some shit like that, whatever. But that premium there, the difference between the, the sale price over there and the sale price in america was actually 30 percent higher. The problem with korea, however, was converting the, the cash, quickly enough. Again, you're doing this on on the daily uh, converting the cash quickly enough. Uh, back into us dollars. They're the, the korean, whatever the hell they use like their stock market over there. Over there, it's just being able to convert their. The Korean currency is so restricted that it takes days, I should say more than a day.
Speaker 3:Oh, to trade it over to the American dollar. Correct for the transaction, to sell. All right gotcha.
Speaker 2:So that doesn't help. When it takes more than a day, that defeats the purpose of day trading. So in this case, this guy's day trading between Japan and the USA. Now, while it didn't last long, while his that trade gap didn't last long still, over the course of just like two months Alameda was able to earn close to 30 million bucks. Now think about that. You're talking about just a 10% difference in sale price. He was able to that quickly just buying and selling same day, same day, same day, same day, the same thing, over and over and over again. I liken the situation to um office space, right?
Speaker 2:So when in the movie office the one cent when they were shaving when they were shaving percentages of sense that went beyond one penny, smaller than a penny. It's exactly what this was. He just found that.
Speaker 3:And exactly what this was. He just found that, and and then the company, the company or whoever doesn't really see that missing, because it's such a small amount when it's when you're talking millions upon millions so from the office space perspective, that's obviously where it differs.
Speaker 2:Nobody's looking for anything missing. This guy's just noticing that difference between, basically the the us demand versus the japan demand that's, that was smart.
Speaker 1:When I see things like this, I'm thinking why don't you just stop while you're ahead? Sure you can almost stop working. This guy gotta stop working back then and been set. I mean, I guess depends on your lifestyle. Wait till we talk about this guy's lifestyle, find out, I guess well, that was what was um.
Speaker 3:Oh, the movie with charlie sheen uh wall street yeah, like once you get a taste for that just a little taste. But then then you got guys like oh, I made 30 million last year and the competitiveness to be in that field, like you know, oh, I made 60, oh I made 80.
Speaker 1:You know what I mean you just don't stop right, you want to have the best business card. Yeah. Doors like this, yeah right they're gonna get there actually, you see the new tesla doors.
Speaker 3:Anyone? I saw that one of those pickup trucks driving around, yes, oh my gosh, the whole side um goes up. I want one.
Speaker 2:I know the cyber truck so I want the cyber truck, but I want one gasoline, I don't want an electric car I never want an electric car, I would I fucking would, I get it, you would buy a hundred thousand dollar truck yep to convert it for another hundred thousand dollars to gas.
Speaker 3:I forget that bed of that truck I put a big tank for for another hundred thousand dollars I forget that bed of that truck.
Speaker 2:I put a big tank for for gasoline in there and I drive around for a smoke snack I give you credit.
Speaker 3:That would be the coolest shit I've ever seen.
Speaker 1:Dude, dude, that's a cool electric car like fuck your electric car, man, that's gas you can hat at just buy a hemi like a ram and then get the uh cyber truck body you know, or or you know or put it over top.
Speaker 3:With like the $100,000 gas conversion kit to your electric car.
Speaker 2:I think the way I would do it. I would use the whole bed to basically fill the bed with a big tank for gas and then a generator, so that the gas would run the generator, then the generator would make the electrics, yeah, to run the electric Rube. Precisely it is it is, in fact, the mousetrap of of that at eight miles a gallon. So remember that. Tara mcale, she ended up leaving alameda research in april of 2018, after having founded the company not but six or so months earlier.
Speaker 3:Was she pushed out or just she wanted to do something else?
Speaker 2:From what I read, she just didn't get along with her partner Like that guy was really demanding and flaky as hell man. Okay. Again like book smart, awesome, smart, whatever, but just an, I don't know, just an asshole, complete asshole, and I guess she didn't like what he was doing or where he was going or his direction, that he wanted to take the company. Maybe he was just this altruism gone way too far, who's to say, maybe he was already plotting to do bad things, who's?
Speaker 3:to say, yeah, I'm sure that something will come out Like, yeah, six months into owning your own company, then you're like I'm out, I'm out and you made 30 million a couple of months.
Speaker 2:Not bad. Yeah, that's good money.
Speaker 1:That's weird to leave when you're that successful.
Speaker 3:Yeah, I don't know. We hate it when our friends become successful.
Speaker 1:Yeah, that's a song, right? Yes, morrissey.
Speaker 2:Yes, oh, for God's sake, don't be a hater. Fun fact, it's emo night in Harrisburg, Pennsylvania.
Speaker 3:It is at the H. I'll be so sad thinking about it right now.
Speaker 2:So Sam moved to Hong Kong in late 2018. Within six months, Sam found another partner, Gary Wang.
Speaker 3:Everybody Wang Chung tonight.
Speaker 2:With whom he founded FTX in April 2019. So FTX is a cryptocurrency exchange and it is a derivatives exchange Derivatives, anybody. Derivative financial instrument is basically like futures options, any financial instrument with a value based on and other or other investments. It's just taking little pieces of it. It's not the face value. It's wild how that works. If there's money to be made, people find a way.
Speaker 2:So meanwhile, alameda, which still existed, uh, served as FTX's market maker. So a market maker is an entity that provides liquidity, uh, and it's also able to both buy and sell, which ultimately limits volatility. In whatever they're buying and selling, they basically can serve as that other end of a buyer or seller. So in FTX's cases, alameda was able to buy or sell depending on customers' demands, sometimes even taking a loss just to keep the customers around. So what I'm saying is, let's say, dave comes to FTX and says, hey, man, I want to sell my crypto bit for whatever, even if that's over market. Alameda would say alright, that's cool, man, we'll buy it at that price. We'll take a haircut on that because we want to keep your business.
Speaker 3:Out of all the things out of that, the only thing I got from that is like FTX. Wasn't that that movie with Emilio Estevez?
Speaker 2:Oh you mean FX. Yes, fx. Thank you as oh you mean fx.
Speaker 1:Yes, fx, thank you for getting that, wasn't it?
Speaker 3:I thought an ftx was an automobile or what was the cadillac the ftx. Yeah, yeah, I think one of the ctx, whatever damn, zap you so smart.
Speaker 2:So, anyway, but but so alameda, through ftx, uh, what it also did, uh, it was, it also provided the, provided the means for alameda to profit what investors lost. So, just like they could be the giving buyer, they can also be the stingiest hell seller, and look, we're only buying. Or even, conversely, a low bid buyer, like, look, asshole, we see that you're sitting on these coins that aren't worth shit. We'll give you a couple of nickels, you know, walk away, and they'll sit on it and it'll grow and later on they sell it for madness I wonder what the ftx was, uh abbreviation for.
Speaker 1:If it was actually, is it like fungible token exchange or like?
Speaker 3:fungible. What makes sense?
Speaker 2:it would make sense. I know that they they just went with ftx and, like they, they went with the names that they went with for with purpose, like Alameda Research.
Speaker 1:That was in California, probably Alameda in that, a county or something Sure.
Speaker 2:But they went with that, because you start naming things cryptocurrency, exchange, buying and selling platform, blah, blah, blah. Nobody's going to come to it. I'm messing with that, correct. It sounds like a. It sounds like a scam.
Speaker 3:FTX is just a futures exchange.
Speaker 1:Yeah, but it doesn say what it stands for. No, it's just a.
Speaker 3:Like abbreviation yeah. Bankman Freed was the one who started it. Ftx acquired a Blackfolio.
Speaker 1:Maybe it's Freed. Maybe it's Freed Just.
Speaker 3:FTX is an abbreviation for Futures Exchange. Oh, okay, so FT.
Speaker 1:Future and the X Exchange? Oh there it is. And the X exchange? Oh there it is Okay futures exchange Okay. There you go, because I know there's a thing called fungible tokens. I don't know if it's a similar thing.
Speaker 2:That's where I thought that this was going as well. Yeah. But hey, thanks for the one source on the inner tubes. Maybe it's right.
Speaker 1:Yeah, I don't know this is all like to me, but as far as crypto, I've never dealt with it.
Speaker 2:I don't want to deal with it. I don't believe in that shit. It's bullshit, it's horse shit.
Speaker 1:I like cash. Yeah, at the end of this I wanted to get some of your guys' input on that.
Speaker 3:Well, none of that ever caught on right. I mean the Bitcoin, the crypto.
Speaker 2:Oh, it's still a thing yeah. Oh, it's still a really big. Thing. Well, speaking of growing, so business was good, like really good, in fact, so good for Sam that Sam had ultimately made his way to Forbes 2021 list of 30 under 30 youngest billionaires. Good God 30 under 30. So he's a billionaire under 30. All this I did was go to college Like your mom goes to college.
Speaker 3:He went to MIT, though. That's where. That's where they're made, I guess. Yeah, I guess.
Speaker 2:Well, until October 21,. Uh, sam was the CEO of both Alameda and FTX. So he's he's running two currency exchanges. He ended up stepping down from Alameda, however, Uh, uh, but in? Uh, when was that? In October, but, uh, he appointed his his own successors. So when you're basically saying, okay, I'll step down from this company, but I'm picking the guy that's replacing me, you still got a shit ton of power in the company that you just left. That makes sense. So, within a year and a half after having founded ftx, sam moved to the bahamas.
Speaker 1:Now, by now, this was, uh, september of 2021 yeah, I would think with the Bahamas it's a lot to do with, probably, regulations and stuff Like they're. They're a lot more lenient down there, if it's what I'm thinking, because I actually just um, there was an audio book that I was checking out on this guy, billy Waters. He's like a gambler, uh, one of the in his word, his own words, he says he's the most successful gambler of all time, bet the most money and all that. Okay. Um, he moved before, uh, gambling was legal almost everywhere, back when it was just in vegas. Um, he moved to the bahamas and ran his operation out of there because number one, I guess, like the taxes, you know, there was all kind of benefits and different things for moving his operation there.
Speaker 2:Yep, it's much lighter banking regulations, much lighter tax. You'll also hear things of like people taking their money to the Cayman Islands or the Swiss bank account type thing right. Yeah, not far off. Yep, not far off, okay.
Speaker 1:But one of the cool stories he had. You're talking about the gambling aspect and the amount of money that was moving around, which I'm sure this FTx had a lot of money moving around in their accounts. But he said he was asked what was the biggest bet you ever put on, like one game. He bet four and a half million dollars on the god damn four and a half million dollars, million on the colts saint super bowl, holy shit and I think it was 2005, maybe or 2009, and uh, he won, though, but uh, yeah, it was a great.
Speaker 1:It just got me to thinking, because I think his operation was in the Bahamas as well. Now he ran this game. He would have a team of people calling and making bets and taking bets. No, not taking bets, he placed bets, but yeah.
Speaker 2:Car doors go like this. Yeah, for sure, holy shit, god damn. All right. So let's see Huge wealth moved to September 21. Okay, so 30 out of 30, 30 out of 30. So let's let us all not forget that we were just talking about earlier. Crypto did not go away. Crypto remains. Crypto has grown significantly since I mean, crypto is still a very big deal. Crypto still traded, not just on a couple of markets Like it's there's a lot of trading platforms and there's a lot of different coins out there.
Speaker 2:I think I saw like there's like 40 major ones that are like worth over a billion or something like that it's. There's a lot of crypto out there search, but it's ridiculous, wild shit that I again, there's nothing backing it.
Speaker 3:There's nothing that's not many, I don't know it must be like bullshit. It must be billionaires that invest in crypto, Cause there's nobody that I don't know.
Speaker 1:No, regular people do that. They think it's almost like uh, uh, the way I look at it and I know there's people that will just disagree the pie is it's. It's like uh, I think you look at it like a lot of people look like a get rich scheme, but I look at it almost like yeah correct. Yeah, bring your money, and bring your money and it's going to grow and if you don't time it you're going to get screwed. 100, what do I know what?
Speaker 2:hey, I'm no scientist this.
Speaker 3:This guy was born in 1992. Us who are born in the 70s, like I'm still kind of like that, you know, mattress under, or my money under my mattress, like you want to see it. You want to like the green dollar. I don't know like this crypto thing just blows my mind with my mind on my mattress and my mattress on my mind 110.
Speaker 2:So crypto remains a volatile market. In may and june of 2022, this was like nine months, eight or nine months. After he moved to, after sam moved to the bahamas, uh alameda suffered substantial losses in the crypto market and I mean mean, look again. You're going to see things like you'll hear the articles like Bitcoin or this, that or the other thing, where that thing will drop ridiculous amounts and it'll increase ridiculous amounts. It's incredibly volatile.
Speaker 1:What's that other one, ethereum or something like that Ethereum is absolutely.
Speaker 3:it's a that's a Def Leppard song, a coin yes. It's.
Speaker 1:Ethereum.
Speaker 3:When leopards on a coin.
Speaker 2:Yes, I thought it might have been a tool album ethereum. Yes, could very well have been, but either way, in order to cover alameda's positions and to enable alameda to pay off loans it had used to acquire the crypto it held, ftx loaned approximately 1010 billion with a B to Alameda. Now, the $10 billion represented half of FTX's customers' funds. So there was a couple of things in that sentence I want to point out one more time. First things first. The loan to Alameda was for Alameda to pay off loans that Alameda had gotten in order to buy crypto. So it wasn't buying crypto with its own cash, it was borrowing cash to buy crypto, this ridiculously volatile thing that's like. Isn't that the same shit that Madoff did? That's quite literal.
Speaker 3:No, he just well he would take some people invested, invested and he would just use their money. That's correct. Yeah, that's the second part of his own money.
Speaker 2:Yep, that is the second part of this, but the the first part, the loan part. There there's no difference to what that was. Then, if somebody goes to the bank got a loan and then you take that cash and you go to vegas, there's gambling. That is exactly what that was. So then, yes, the second part that I wanted to point out and matt very aptly when, when you're, when you're acting in a fiduciary capacity right, fiduciary, you're acting on behalf of someone.
Speaker 3:Yeah, so I went to school with a couple of fiduciaries. That's right, it's a real douche. But yeah continue.
Speaker 2:When you have the oh, I will Thank you. Thank you. When you have those customer funds, that's the customer's funds. Like you're, you're holding those monies on their behalf and you're you're investing on their behalf and it's sitting where it is. You cannot, you cannot, take their customers money and start making money of your own.
Speaker 2:Yes, the lawyers will get disbarred for that shit. That's a no-no. These trading companies will be kicked off of the, the exchanges for that. Like you can't fucking do that shit. Uh, yeah, yeah, yeah, oh, let's see. So all of that is a serious no-no. But and ps, the cryptocurrency itself in which alameda was significantly invested the name of that coin was the ftt. That ftt was the exchange token that was issued by FTX, so it was their own Bitcoin equivalent. That's correct. It was FTX's own version of Bitcoin was the FTT and, as chance would have it, this closely held corporation, or this one that Sam just stepped away from, was invested heavily in FTX. So they're just loaning back and forth on something with no substantive value whatsoever, all right, so this is where this I'm calling it a digital wallet.
Speaker 3:I just had to look up that stuff too digital wallet is a thing.
Speaker 2:I have a digital wallet. That's crazy. Yep, I've never used it, but I have it, uh, okay. So news of alameda's and ftx's ties ended up making its way to news outlets. Now there's this outfit out there and this is what I have in my wallet, or run in my digital jawn it's Binance. So Binance is the world's largest cryptocurrency exchange.
Speaker 3:Does that like if you don't know it like for sure, if you're like money or if you're like not money? Yes, you're like Binance.
Speaker 2:You're Binance, that's right. You're just dipping your toes.
Speaker 3:You don't know what you are, you're just like in the middle.
Speaker 1:Are you paper or?
Speaker 3:coin You're paper.
Speaker 2:What are you? Well, that's the B in LGBTQ.
Speaker 3:Oh, Binance, yeah Binance.
Speaker 2:Dang, so right. So News of Alameda and their ties made its way to the outlets. Binance, again, a competing cryptocurrency exchange, the largest in the world, uh, and at the time, holder of approximately 10 percent of, uh the total ftt in circulation. Again, ftt is that ftx's version of bitcoin, for lack of a better word. Um, they announced far and wide, high on the hilltops, that they intended to sell its 10 stake in ftc currency. Yeah, so when you're the biggest swinging dick out there and you say I'm selling off my position in this company, all of it, that's like. I mean, you've heard of Warren Buffett, right? Yeah.
Speaker 2:Okay. So if Warren Buffett is the majority holder of pick a company and he comes out and says, fuck it, I'm going to sell all of my shit in this company, that company is going under. He is just the voice of power in that. In this case, Binance had that same power.
Speaker 1:I saw a thing that kind of and I would equate this to stocks Similarly that they said a guy was explaining how the stock market works. He said think of your Warren Buffetts or your big heavy hitters in these little speedboats and they can turn real quick and all the masses of people are like big cruise ships. So when they go and sell something and turn the market, they're real quick about it and the rest of us move real slow because we're in this big. So, just like if this company's selling, they're getting out quick, yeah, and then everybody else is kind of left behind they're.
Speaker 2:They're when they're first to the news to say that I'm getting the hell out. That means that they're getting the hell out and everybody, hopefully, can catch up. Right, should those people choose. Right Now there are, you know, between bull and bear markets, there are a lot of people, a lot of people that are into buying when stocks are on a downturn.
Speaker 1:Yeah, Like when what's he say and he says when people get scared, get greedy. Yeah, you know what he says. I don't like that yeah absolutely so.
Speaker 2:Uh, the that sale led, uh, all of the other ftx customers into a panic. And now again, ftx is the exchange right. Just for clarity one more time ftx is the exchange, ftt is the coin coin, yeah. So fftx customers went into a panic. Uh, that panic led to customers liquidating their accounts at FTX. That liquidation reduced FTX's assets by $6 billion in one day. Now, when I say assets of FTX, this is like think of the Great Depression.
Speaker 2:Right when people started learning that banks were going to fail, everybody ran to the banks like hell, I want to get my cash, give me my cash, think of it. It's a wonderful life. People ran to Bailey's shop Give me my cash, give me my cash. They got no cash, ain't no, it got no money in there, y'all. That is exactly what what ended up happening to FTX on that day. So their assets, not the coin, ftx.
Speaker 2:It also led to a decline across the board in all cryptocurrencies because they see this one going and it was a pretty big player. They see this one going. They think the whole shebang is going up. Rome is burning. Correct, exactly that. So on November 8th not, but two days after the sale of its stake at FTX's FTT currency. Binance announced its intentions to buy FTX and encouraged all crypto exchanges to cease using FTT as collateral as it would be volatile during Binance's due diligence process. So what for lay people? What happened? So binance sold its stake in ftd, drove the value of the company down to shit because everybody else is is going to ftx, liquidating its ftds. Now that the company's cheap as shit, binance comes in and says, okay, now we're gonna buy it.
Speaker 2:Like this is complete market manipulation right, sure, yeah but hey, in america first you get the sugar, then you get the power, then you get the women. So in this, but that was homer. I'm sorry, I had to do it.
Speaker 3:My ftt won't let me be.
Speaker 2:I can't get it out of my head so these, so these guys swoop in and they say, okay, we're going to buy it. So that announcement alone. When that was so step one, now step two. When, again, the biggest swinging dick in the cryptocurrency market, binance. When they come in and say, hey, everybody, probably not a good idea for you to be using FTT right now to be buying and selling and or using FTT and or using FTT Cause it's going to be really volatile. You should probably just stop using it for a bit.
Speaker 2:This is like God coming down and saying, hey, you know, stop using the, the, the rupee, or the shekel, or the, the, the, the DNR, right, you know, just pick a currency that you just want to wipe out a small company or country. Same thing is exact, exact same concept. Cosby shouldn't use the rupee. Yeah, that's right, it's bad news. Sent me a rupee, so let's see that announcement alone again. This is binance, really just fucking with these guys. That announcement for them to for all currency exchanges to cease using it. Reduce the market value of the ftTT token, the FTT currency, from $25 per coin down to $5 per coin. Dude, that's one day. It also reduced Bankman Freed's personal wealth by $14.6 billion. Now, when I say his personal wealth. At its peak, his personal wealth was approximately 26 billion, so just in one day he lost more than half of it. This was after all of the other shit had happened prior to that.
Speaker 3:But when you're losing that many like in a billion, is that that big of a deal?
Speaker 1:Yeah, that's what I was thinking about, but I'm sure it still hurts the thing is.
Speaker 2:The measure of that wealth, though, is in crypto, because he held very little hard assets Very little, I'm saying comparatively speaking. Sure, he had millions socked away in this or that in actual dollars, buried treasure, I don't give shit. That certainly existed, and he had. You know, his parents had a house that he had purchased for him, and he gave them money and all kinds of shit like that, but 99% of his quote-unquote wealth was tied up in crypto Like fake shit, which, again, is just so goddamn volatile. It's just all over the place all day.
Speaker 3:But, like you were saying, I'm sure he had money in like liquid assets or what would that be like actual hard, like whatever your assets are, Like he owned a lot of shit, Because you're talking in billions of dollars. But, like you said, I think he played with this crypto stuff or the, the FTX. I think all that was just like kind of like him playing slots. Pretty much could be like. I don't know how you would base that on like actual real money, but I guess it is. I don't know it, just I don't know it's converted.
Speaker 2:I mean thing when you yeah, so you're not getting in with nothing. You have to get in with real money yeah, yeah, it's like you, it's, it's like the lawnmower man you're that's a great movie you're converting the physical into the digital right, but you see this even with video games and stuff.
Speaker 1:I know my kid they played fortnight. They had the thing called v bucks. Yep, and I mean it. You know it would float around and you got. You know, if you got a lot of v bucks you can buy a lot of product In this game. It has a value. It's just insane. What Getting skins? Yeah, getting skins, exactly. So everything I guess has a value. You know like that, but this stuff's just insane.
Speaker 2:This stuff is all it makes your head spin. It's all based on, I think, demand or hype, like there was a coin out there, like I think it's called the Dogecoin.
Speaker 1:Dogecoin yeah.
Speaker 2:That what's his name? Elon was pushing Like one day Elon's at an interview and says oh man, you know I've taken quite an interest and a good stake in the Dogecoin.
Speaker 1:Yeah.
Speaker 2:That day it was up 100% or some shit.
Speaker 1:Right couple kids that were screwing around and it's supposed to do with the, the shibu inu dog, or something like that. It was all a joke. They put it out as a joke, really, and then it became something real.
Speaker 2:So something into which people took real money and invested. I like doja coin.
Speaker 3:She's like bitch. I said what I said. I'd rather be famous instead, doja coin.
Speaker 1:She's huge right now. Yeah, I was gonna say I know that's an artist yeah similarly, but I wouldn't know what she's doing. Doja Cat, doja Cat, she's actually really like.
Speaker 3:The kids love her.
Speaker 2:Oh yeah, apparently so does Matt, yeah, I do, I do, she's great.
Speaker 1:You're kicking out lyrics.
Speaker 3:He's on hits one man he's listening to all that be on a kid's bop yes, oh, yeah, side bet.
Speaker 2:Yeah, okay, uh, so that was on november 8th, november 9th, the next day. This is the ultimate fuck you.
Speaker 2:Binance announced it's walking away from the deal no so again binance, completely demolishes the company, liquidates its stake, completely demolishes the company and says you know what? Fuck it, we change our minds, we're not going to buy this thing. So this thing was done, this company's over. That same day, november 9th 2022, alameda's website was taken down. The next day, november 10th 2022, uh bankman freed announced that ftx's intentions and efforts to raise uh 10 billion to remain solvent, again raising $10 billion. They're looking for investors.
Speaker 3:They're looking for whatever. Kick in.
Speaker 2:That same day, virtually all of FTX's legal and compliance team resigned Again. When the lawyers and the compliance people are running for the hills, something is awry. Something is certainly awry the next day, november 11th, alameda Research and FTX filed for Chapter 11 bankruptcy protection Dude. This is such a wild ride. Like I read this and to me it just blows my mind Again one year earlier. One year earlier, this guy had just moved to the Bahamas and was listed on Forbes Richest of the Richest 30, youngest of the 30.
Speaker 3:30 of the under 30 26 26 billion. That's what the B and a year later you're saying that they filed for chapter 11. Correct, because they have no money the monies is gone.
Speaker 2:The money is gone. The money is gone again when you, when you take it back to just its foundations and its fundamentals.
Speaker 2:They took customer money and they gambled with it, they gambled with it or they loaned it or they did whatever to make even worse gambles, and it just went worse and worse and worse from there. There were no, there were. There's supposed to be safeguards in place, but I mean ultimately I mean, as as I was reading about this, this because it's crypto and it's all digital, it's all programming right. So there are safeguards in place that says, hey, man, you can't do this, you can't do that. There are things to automatically stop you that regulators will step in and say you know, let's make sure that your controls are in place and are functioning as designed so you're not dicking around with your customers money or that you're making risky bets because of this exchange, this, which is still, to this day, like not regulated you, this is they're gonna say mount up this is absolutely not regulated shit.
Speaker 2:I don't want to say unregulated. I don't like the. I think the the prefix on his way misused well they.
Speaker 1:I know that in china they outlawed it they china? Yeah, they, none of it. You can't do any of it over there but, um, I was amazed at the amount of celebrities that were involved in promoting this. And uh, there were. I didn't realize at the time even what the commercials were about. But looking back now, during the Super Bowl, there was a lot of commercials about cryptocurrencies.
Speaker 2:Oh, my God, yeah.
Speaker 1:I think FTX itself had a commercial during the Super Bowl.
Speaker 2:I don't know about the most recent, but I know that the year before this most recent.
Speaker 3:It would have been like the 22 Super Bowl 22 Super Bowl was ridiculous with crypto commercials redonkulous, I might say but how you're saying it's, it's celebrities and stuff, because they're the only ones that have that extra coin sitting around that they can invest in something like like this is not a regular person so you would think, you would think.
Speaker 2:But, as david mentioned, there is the that get rich quick mentality out there yeah I know kids that are in high school, that are, that have digital wallets.
Speaker 1:Oh, yeah, because you can buy like fractions of a Correct. Yeah, because, like Bitcoin, for instance, today's price I just looked it up before we started $64,351.60 a share. Okay, per coin, per coin.
Speaker 1:So you know, average person's not buying a whole coin, correct, so you can buy fractions of it, I'm sure'm sure. But for instance, the first day that I could find that it was available, uh, that looking at the five year or looking at the max, just like a stock, the max time frame was november 27th 2015 it was 327 dollars a share, or a coin, I should say not a share, but uh, yeah, that's crazy that's a lot of money, yeah, but you trust the stock market.
Speaker 3:I don't know if I would trust the whole Bitcoin. It kind of sounds like a pyramid type scheme.
Speaker 2:I don't know how, but it's people smarter than all three of us put together making shit up. I just can't understand. Look, I'll be the first one to tell you I'm no scientist. I just don't understand how one can put some kind of ridiculous value on these non-fungible token. It just doesn't make sense.
Speaker 1:Yeah To me.
Speaker 2:like I said, I feel the same way, but it's also like art, though, right? So if somebody says that piece of art, some baby wiped his ass on a canvas and I want a million bucks for it, it's really whatever somebody's willing to pay. So it's the same concept, I guess.
Speaker 3:But that's what you get, like the hungry fish in a pond type thing you keep throwing these little like tidbits out at them. You start seeing like it turns into a frenzy and I think that's what people with money are always looking at easy ways to get more money. Yeah, and I think this is how this whole thing I don't know To me, whole thing there, I don't know to me it's hard. I don't understand half of this shit there was. I don't?
Speaker 1:there was an nfl player, maybe a year or two ago that took his bone like his sign-on bonus in cryptocurrency cryptocurrency bitcoin he was like you know, don't pay me the traditional way. I want x amount of bitcoins or what I don't know. It was a bitcoin, but one of those.
Speaker 2:So whatever man I like it's, it's not something I ever want to get into. I know that in recent years, institutional investors have gotten into this, and by institutional investors. I'm not talking about the institutions that are doing the investing, like your Merrill Lynch's or your Wells Fargo's or shit like that. I'm talking about, like when you said like, so what that will get to, like the celebrities that got hit with this loss, these significant losses, like a Bernie Madoff type loss. I saw there was a number of pension funds.
Speaker 1:That are invested in it that were invested in this goddamn FTT and FTX.
Speaker 2:There's a lot of people that lost a lot of money in this Poof See that Maddow stuff.
Speaker 3:It's just he never had any. The people invested in. They were just giving him money. He didn't invest any. They weren't making anything off their investments.
Speaker 2:Yeah, so on paper the made-up thing is a whole different thing.
Speaker 3:Yeah, that's a whole different thing, but that's actually a good thing to look into, for sure, did we do him yet or no? No no.
Speaker 2:That was a goodo. Was Barry Minko the ZZ Best carpet?
Speaker 1:Yeah, Z Best, Z Best carpet Cleaning or whatever. Yeah.
Speaker 2:That guy was a hero. Oh yeah, he was good Dude. That guy didn't care, so that guy was just straight fraud. I mean document fraud, not digital fraud. I mean on paper, in your face fraud Insurance fraud he did it the old school way.
Speaker 1:Yeah, in your face, fraud, insurance fraud. He did it the old school way. Yeah, oh, we burnt down the uh office. That's right.
Speaker 2:That's right come visit the new office and you pay construction guys to show up at some empty place.
Speaker 3:But then they say like anybody that makes that kind of money, like you have to, you have to become crooked at some point I know I was thinking you were going to go there with that. Yeah there's some deal or something that is made in your lifetime where you're like okay, I can either go this way or this way. What's the right way and what's the wrong way? You got to go the wrong way.
Speaker 1:Hmm yeah, I figured you were going to bring that up.
Speaker 2:I had a feeling matt would bring that up as well. Why was?
Speaker 1:well, it came up on those other ones. I remember you you were saying that on, like the barry mink oh, yeah, yeah, that's what I'm saying.
Speaker 3:Yeah, you have to, you have to do something wrong like, yeah if you get, yeah if you're getting ahead.
Speaker 1:That was like the point you made on that story was like anybody gets that rich has done something along the way. I think was kind of along the along the lines of what you were saying.
Speaker 2:Yes, has broken a rule or been a rule, and I remain politely disagreeing with them.
Speaker 1:Politely.
Speaker 3:A debate. It is a debate.
Speaker 2:Yes, it's non-debatable right now, but continue. I'm not going to say that there's not bad actors. Of course there's going to be bad actors, but there's still for sure, exists for sure. We only hear about the bad ones. Yeah, you only ever hear about the bad ones. Now, think about that. Think about that. There's a ton of boy scouts out there, right? You never see the newspaper article of the, the guy that helped the old lady across the street.
Speaker 1:You never do it's not a juicy story.
Speaker 2:It's not a juicy story, but instead you hear about the gunshots and the whatever kind of shit that went down or the cop that got shot. That's what you hear about.
Speaker 3:You never hear about the good yeah, you never hear a good story, but I'm saying for a lot of.
Speaker 1:It's debatable yeah, I know what you're saying, though, matt, and I know what you're saying and I think yeah, we can meet in the middle of that one I think and I'm probably somewhere in the middle on it too I feel like there's probably a lot of people that do, but a lot of people that don't, probably somewhere in the middle, you know.
Speaker 3:I'm just saying the ethical. There's a lot of unethical.
Speaker 1:So you're saying you've got to break a rule here.
Speaker 3:There's a rule, there has to be some sort of rule that is broken along the way. They might say, hey, this isn't the. You know, I wouldn't. They might say I don't, I wouldn't think of it as doing something wrong. Something small, yes, but something small could always be something bigger to somebody else down the ladder. I disagree.
Speaker 3:I think there's just an element of hater that people with money, I mean if I had a couple of Lambos outside of the house and yeah. But I'm saying there's probably something I did along the way that that enabled me to get those.
Speaker 2:OK anyway, moving on, best of luck with altruism, matt. Thank you, so I'm investing tomorrow One day before he was scheduled to testify testify before the US House Committee on Financial Services Bankman Freed was arrested. That was on December 12, 2022. Freed was arrested. That was on december 12 2022. At this point, he was charged with wire fraud, conspiracy to commit wire fraud, securities fraud, conspiracy to commit securities fraud and money laundering. After 10 days, sam was extradited from the bahamas to the united states and he was released on a 250 million dollar bail.
Speaker 2:Million m car doors only go like this yeah at the time and still to this day, it's the largest bail bond in us history did that come from his own finances, you think, uh, his parents, his, parents.
Speaker 3:Now bill bond is an actual, the actual money. Like you only have to pay a certain amount, like a certain percentage of the bill bond, correct? 25?
Speaker 2:mil, you gotta pay 10%, 10% of it, okay.
Speaker 1:Or that dude will come after you with the mullet, that's right Dog, the bounty hunter.
Speaker 3:Yeah Him and like his wife.
Speaker 1:Yeah, she's like go get him dog. I think that's in Hawaii though PS.
Speaker 2:There on HBO it came out like 20 some years ago. It was called Family Bonds.
Speaker 2:I kind of remember that it was about a bail bond family. So, as chance would have it, I know a guy who's a bail bondsman. There's so many aspects to that job but in bail bonding you can be just a bondsman. But you could. If you're going to be a bondsman, you're going to need to rely on a bounty hunter or you can do it yourself. This family, this family bonds. This show was about this family in Jersey that were both. They ran the, the bail bond house, or the house the the bail bond uh business, but they were also the bounty hunters to go get the guys that were skipping bail. So they did it all. Yeah, it was amazing, great show.
Speaker 3:Absolutely Great show.
Speaker 1:I'll come to somebody's house dressed like Boba Fett, yeah with the gun Can't be all shit Jetpack.
Speaker 3:Yeah, jetpack, fly down, be great.
Speaker 2:I know what he's here for. Yeah, at least you'll avoid the traffic on 81. Oh, I know right. So on January 3rd 2023, of course, sam pleaded not guilty to all charges. Now, one month later, in February, four additional charges were brought against him. These related to him making more than 300 political donations using funds from customer accounts. Fun fact, matt Sam Bankman Freed was the second largest individual donor to the joe biden 2020 election, with a total 5.2 million.
Speaker 2:That was after uh soros no, no, that was after michael bloomberg, bloomberg after bloomberg, and he was also the second largest individual donor to the 2022 Democratic Caucus, with a total donation value of $39.8 million, which was second to.
Speaker 1:Soros. That is correct. Oh, so that was okay, Yep.
Speaker 3:I'm sure that was all clean money though. Yep, well, it was his customer's money. Yeah, that was all well-earned, yeah, clean money.
Speaker 1:I did hear a thing on. I was listening to a podcast about this guy and they said that he did donate to both sides though too maybe not as much on the republican side, but he was playing both sides. I guess.
Speaker 2:I looked that number up just to make sure, because I'm happy to be, you know, clear on both of this. On the uh for the, the 2020 election, he didn't do shit on the 2022 democratic caucus. Compared to that 39.8, he had contributed 292 000 to the republicans.
Speaker 1:The republicans, that was it 292 000 versus 39.8 million that's a lot more, but do you think he was doing it on both sides for like protection almost?
Speaker 2:like hedging his bets yeah, like, almost like. Oh, if one or the other gets in, I guess you would think if you were doing it more that way, you, I honestly think this guy, the way that this guy's mind worked I think it was really for the issues Like I, I really I I wholeheartedly believe that that he he dug deep enough on what these guys cared about when it came to like at the time, so like pandemic prevention or earthy shit or whatever Earthy shit that's great yeah.
Speaker 3:You earthy shit or whatever earthy shit, that's great.
Speaker 1:Yeah, you know he was. He was actually like he was concerned, so he was really looking at the, not looking out for himself, because they were saying maybe it was to like hedge his bets, like, oh well, then if something comes down the road and you have political connections, this way you could say hey man, look, I donated to your campaign.
Speaker 3:Get me out of this, that's right yeah, but the that's like a, that's like a political thing and I think you guys would agree with me like it's. It's like rich people want to be democrats, they want to be like oh, I feel for the poor, I want to help, I want to give. This sounds like he was like so rich, he's kind of like going democrat, like that, because he wanted to give, like I'm giving, even though what dave was saying I think they play both sides of the fence I disagree, but, needless to say, this is not the time for political debate no With the big 2-2-4, 2-2, 2-0-2-4.
Speaker 2:So Bankman Free Election, his let's see his trial began. Oh nope, I'm going to go back one. So a month later, we're now in March of 23. Sam was indicted for sending $40 million to China in hopes of them unfreezing his crypto accounts that were sitting there.
Speaker 1:Yeah, I think it's probably at the time when they outlawed everything over there, correct?
Speaker 2:And they were shutting it all down. They were saying, look, dickhead, you made this money over here or we're waiting for you to go through your court process in order for us to have to liquidate this shit. Anyway, your assets are frozen, we're not releasing these funds. So ultimately he wanted, he tried to grease the wheel, essentially bribe. Uh, hey, man, look, can you here's 40 million bucks, can you unfreeze my account so I can get whatever's in there?
Speaker 1:do you know, like how they um speaking of that over in china where they had people basically unlocking this currency how they do it? They use like um computers basically to uh, now you got to run like a ton of computers, I guess a lot of computing power to you have to basically verify the. I say like bitcoin, for instance, or ftt. You have to like verify that it's a legit I think they use the term blockchain of coins so they farm that out to people with computers.
Speaker 1:You know all these computers to basically farm this, this cryptocurrency, and if you do that for them, they'll reward you with you know. You know basically bitcoin or whatever cryptocurrency yeah, that's correct, you can.
Speaker 2:Anybody can do this yeah you can go out and buy processor and you can buy, do whatever, whatever it is out there and you can just buy as many as you want. You want, you can get air as you want. You can get air-cooled ones, you can get water-cooled ones. Put them all in a room and just let them run.
Speaker 3:I keep on thinking of weird science, like trying to get into it, like going through those things that they were going through on the computer.
Speaker 2:It's exactly that. Like big blocks. It is exactly that.
Speaker 1:We ran into that with my son because he's a gamer and he built. He has his own PC. He built and he was buying parts for it and upgrading. He wanted to get a new graphics card, a GPU, that's it. It's the graphics card.
Speaker 2:That's what does the shit.
Speaker 1:Yeah, the graphics card so Not the processor.
Speaker 2:What is it?
Speaker 1:Not AMD. What's the big graph? Nvidia, nvidia. So their stock was going through the roof and the prices of these graphics cards were through the roof and my son's like, why can't I, why are these?
Speaker 3:like. What do you mean? What is the price of a graphics card?
Speaker 1:let's just say like retail is 250 dollars. Let's just say okay they were selling for 500, like they were sold out everywhere, and then if you can find one, like on ebay or something, they're double the price because so many people were buying them for this shit to do this instead of gaming.
Speaker 1:So nvidia said like oh um to the retailers like, hey, try to sell to like gamers, like you know what I mean. But they can't control that, they're just trying to sell product. But I thought that was an interesting side thing to all. This is how that affects that whole industry supply and demand man so the smart money would be take your money, invest in at that time nvidia dude, so have you so?
Speaker 2:fun fact. It's amazing, my, as my wife pointed out, the value of nvidia to me, probably by now, like two years ago, take a look at the action on nvidia. Look at, look at nvidia's stock for like the last five years. Oh, it's crazy, yeah, it will. It's almost like bitcoin. Like it is insane how big and how how much money that place has amassed. It is well not it that place, but the value of that company is unreal. Good for them, I say yeah, they're.
Speaker 1:I saw their I think it was a ceo and he was doing a presentation on this new uh processor. They're coming out with a graphics card, basically, and it was like I forget how many billions they invested in developing this thing but, it. I mean the company's like on cloud nine right now, sure, doing so well is he a young kid, their ceo?
Speaker 3:is he a little guy?
Speaker 1:he's like our age, probably if I had to guess the 50s from what I remember the video. It was on youtube.
Speaker 2:I was watching it, but uh yeah, his name's sam bankman, freed, and uh okay, sam bankman locked up.
Speaker 1:Yeah, for sure.
Speaker 2:So, after all that March do-do-do-do, china tried to bribe China. Sam's trial began in October of 2023, and it definitely didn't take long to conclude. The trial ended not but a month later. In November, bankman freed was found guilty of all charges, which by now included two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud and conspiracy to commit money laundering. He ended up getting 25 years and a fine of more than $11 billion. That's with a B car doors. Go like this. Yeah, his first appeal was filed not but a week ago, on April 11th 2024, at his peak, again at just shy of 30 years old. Peak, again at just shy of 30 years old, he had maintained a personal wealth valued at 26 billion with a b dollars. Today at 32, not but two years later, he is worth zero.
Speaker 3:We shouldn't say that about somebody.
Speaker 2:He is zero it's ignorant his wealth he's worth something his will, his wealth, somebody zero, that's right. I bet he is worth something to his cellmate when he's looking to make a chi-chi. Yeah right, yeah.
Speaker 1:He'll get out someday, though you know you think he'll serve the full 25? Probably not. No, I think Maybe 10.
Speaker 3:Yeah, he ain't going to even serve that, He'll serve five.
Speaker 2:I think they were ballparking 18, but I would point I would not be surprised if it gets out sooner and then he'll get out write a book and have like yeah he'll make, he'll make millions again and then he'll have like, uh, you know, a show or a movie I bet in prison he'll get in prison.
Speaker 2:He's learning to pee sitting down yeah, he'll be selling bitch coin bitch that is awesome yeah so it's interesting when you, you know, as we talk about this, we we're going through this, we're talking about this guy's motive. Really, what is his motive? Now, there's the Barry Minkos of the world right who took customers money, complete fraud, and I mean by customers, I mean investors, all kinds of shit. They frauded all kinds of people to make all kinds of money to buy ridiculous houses, lamborghinis, boats, you name it, just like the wolf of wall street guy. Same shit, same thing. This guy, sam bankman, freed. When he moved to the bahamas and even to the point where he was arrested, he lived in an apartment with two roommates two roommates this is a billionaire with a, b car doors car doors go like this like he was not living on some kind of extravagant, huge compound, ridiculous shit. He just lived in a fucking apartment with two roommates.
Speaker 1:I feel like people do that shit sometimes because it looks cooler Like I'm gonna, like I saw, like-.
Speaker 3:You just wanted like friends to hang out with, like an entourage or something.
Speaker 1:I saw, like the one celebrity I think it was like who played Batman, Christian Bale. He drives like a 98 Tacoma. That's awesome, which, yeah, it's cool. And I like Christian Bale. He's. I like him as an actor and I don't know him as a person, but I'm thinking like he's. Sometimes people probably do shit just to be like different.
Speaker 3:Well, Clint Eastwood's like that too they don't oh 92. Typhoons.
Speaker 2:GMC Dude. I ended up looking up those. It was months ago. I was looking up values of old Blazers and I was looking up this. Those Typhoons were sharp as hell, they were awesome.
Speaker 1:I think it takes a shit ton to run those though, and there was a pickup version called the Cyclone there was yeah, there was oh, okay.
Speaker 2:So when we talk about things like billions, right, and we will jokingly say things like car doors go like this instead of like this.
Speaker 2:when you hear somebody say a billion dollars, none of us and I mean none of us has any concept of what that means you can't fathom you just you don't even know, so like to even to me when I hear something like $750 million, to me, just the the, the fact that there are three numbers in that, that seven, five, zero to me sounds greater than 1 billion. Right, and that's even to me, just because it just I can't understand, I can't fathom having that much money. Right. So we're going to go through a little exercise here to for all of you, to, to, to wrap your head around.
Speaker 1:I'm having flashbacks, Matt. How about you looking at this?
Speaker 2:sheet. This is well, that's my code, that's my coding, all right. So the the size of a dollar bill right Size of a dollar bill, pull one out of your wallet right now is 6.14 inches by two point six, one inches and it is basically one half of one, one hundredth of a millimeter. It's, it's it's point one, I'm sorry, it's point one millimeter thick and that's the actual paper bill that's the bill.
Speaker 2:it's one tenth of one millimeter thick, again six inches, and change by two and three quarter inches. That's how big it is. So from a diagram perspective, comparing 1 million to 1 billion, if you take 1 million with an M 1 million $1 bills and you lay them out and you basically make a carpet out of them, right, you make it to cover an area you could cover two football fields. That's for a million, a million.
Speaker 3:Hold on, slow down, sam, I'm going to be's for a million, a million. Hold on slow down, sam.
Speaker 2:I'm gonna be sick for a second all right, you take a million one dollar bills, you could cover two football fields okay if you take a billion one dollar bills, you're covering four square miles damn what is that?
Speaker 3:like? How many football fields is that? Well, I mean, it's a, it's a now that, now that I have like I'm looking at the football field.
Speaker 2:Since you asked that question break it down.
Speaker 2:Well, so this is easy. A billion is 1000 million. So if a million bills can cover two football fields, a thousand that's essentially 2000 football fields is what you're covering with a billion. That's insane, right? So I'll take that a step further. So that's just. That's just covering a blanket size. So let's go on from for height. For, for an even better perspective, stack and paper. Stack and paper, the again the thickness of a dollar. If you take one million of those and you stack them all up, you will achieve 358 feet, which is approximately like a 30 to a 35-story building. So if you take now, that's a million. A million is 358 feet tall, again like a 30, 35-story building, again like a 30, 35-story building. A billion bills stacked on top of one another is almost 68 miles high. To be clear, jets fly at approximately 6.8 miles. Jets, they're flying at 36,000 feet.
Speaker 3:This is at 68 miles, so that's higher than 40 stories of sheer adventure.
Speaker 1:like bruce willis, I was thinking, I think I was 35, 40 stories.
Speaker 2:You're in the stratosphere or the troposphere at 68 miles yeah, you're almost out of the uh, correct?
Speaker 3:yeah, that's one billion space some cats like bezos and stuff. They're worth what? Hundreds on billion? Jeffrey bezos?
Speaker 2:you can actually you could do an internet search for that right now. Jeffrey bezos is the second ridgest man in the world today. Right, this, oh, tesla took over no didn't he? Oh, who? Number one guy is the louis vuitton guy from france, louis vuitton, the owner of louis vuitton and because it's not just louis vuitton, there's a lot of conglomerate.
Speaker 1:Yeah, I always strip off when they talk about, like those billionaires, if they could give every person in the world x amount of money. You know what I mean and still have something left billions like you, can give every person in the whole world this amount. I forget what the number was.
Speaker 2:It's again wrapping your head around a billion versus a million, a billion 1 000 million. It's essentially 1 000 increments of 358 feet, which is going to get you to 68 fucking miles. That's crazy.
Speaker 3:Yeah, it's like having the basement down here and like shoe boxes of like $100 bills Hell yeah, like stacked to the brim With grill marks. And it'd still be like a couple million bucks.
Speaker 1:Shit. Yeah, that wouldn't even it wouldn't even be. When you think about Escobar and where they were, all the money they were moving, the millions and millions they had to like put it in houses, like build it into the walls of the houses. They were building their own pyramids.
Speaker 3:That's like in Blow. Remember Exactly In Blow he had to get like new houses just to put the regular cash money away.
Speaker 1:You have so much money, you don't know what to do with it.
Speaker 3:That was only like a couple million, though. That's like three, four million.
Speaker 2:And he wasn't doing it with ones.
Speaker 3:Yes, those were $100 bills in the 50s.
Speaker 2:I got one last example for you, one last. So what did we do? Now We've done area, we've done height, now I'm going to do distance, this one, I think, in my opinion, it's probably the easiest for me to wrap my head around, because I'm always on the fucking ground, right, I'm not that high in the air. So distance Take 1 million bills, 1 million $1 bills. You line them up end to end. That'll take you 96 miles.
Speaker 1:For a million dollars.
Speaker 2:A million bills, a million dollars in ones, it'll take you from here to, basically, city Line Avenue, just outside of Philadelphia. It won't get you from your house, dave, from your house to City Line Avenue, again just outside of Philly. You're 10 miles short of Philly. That's 96 miles miles. Damn, you take a billion of those.
Speaker 2:You can circle the earth four times oh my god, yeah, that's crazy a billion one dollar bills will get you around the earth four fucking times, versus the million that'll get you from here to philly philly, mind blown on that. So there you, from here to Philly, philly, philly, mind blown on that. So there, there, there it is. That's really the best way If I could put anything into perspective for anybody, like when you put math and measurement and obviously how big these notes are. That's how it works out and that's crazy.
Speaker 1:So that is a lot. So with that billion, this guy had 26 of those millionaires are poor. Yeah, well, it just goes to show too, like uh, you have that much money like to to invest in something like this. You're probably like, yeah, whatever, I lose a billion and you're worth 26 yeah, but like zap said, his life's worth nothing now right, nothing zero now, you're right, matt.
Speaker 2:His life, I'm sure, is worth something to his mother and father yes, who profited? Something who profited well off of his ventures.
Speaker 3:Yeah, I'm sure they got a little bit. I'm sure they're not living in an ugly house somewhere.
Speaker 2:No, All in all, I think he ended up giving them between the cash and the house. I think they ended up getting 32 or 35 million. Yeah, that's good money there, which means a million, just millions, so they could go back and forth from here to Philly 32 times.
Speaker 3:These people are so narcissistic they can't get out while they're ahead.
Speaker 1:So I was going to ask you guys, and I figure I wait till the end. So neither of you and I haven't myself either have ever invested in any kind of cryptocurrency.
Speaker 2:I was this close. So I had mentioned earlier, I got the wallet and I got the whatever the exchange thing and at one point I was really into it. Hell, I was actually going to go out and buy graphics cards to try to do that shit, but the juice was not worth the squeeze for that Worth the squeeze Matt nothing for you.
Speaker 3:None of that in my portfolio. No, I got nothing.
Speaker 1:Start ODB coin. Yeah, you should put that out.
Speaker 2:I got some Susan B Anthony's, though I do also which one's that the? Half dollar one. No, Susan B's are the $1. Yeah, Susan B's are the $1.
Speaker 1:I got you.
Speaker 2:JFK's or the whatever are the 50 cents?
Speaker 1:I got some Chuck E Cheese Shit yeah. Yeah from the arcade man. Hell yeah Back in the 80s.
Speaker 3:That's good stuff. Susan B, didn't she like sew the flag? Was that her? Yes, I get her confused. No, in the back of the bus.
Speaker 2:That was Rosa Parks. What did Susan?
Speaker 3:B Anthony, do she signed a declaration of independence?
Speaker 1:That sounds like somebody transitioning. Susan B Anthony, susan B. Anthony.
Speaker 2:Who's that?
Speaker 3:That's Susan. No man, she's on the binary code or whatever. Susan B Anthony, susan B Anthony. No, she be Susan Susan B. Anthony, he ain't lying I made my day top shelf.
Speaker 2:Yes, good, all right well, I hope we all learned a lot today. What uh a million versus a billion?
Speaker 1:and uh, you know, easy come, easy go I enjoyed it because, like I said, I um, I enjoy that you brought this up because crypto in general I'm interested in but I don't want to be left outside looking in at the party. You know like I. You know what I'm saying Like a couple of years from now. But I feel kind of confident now that maybe I'll be okay, I don't invest in this, but maybe not stick with buying.
Speaker 2:They're the largest, they're the longest standing, they're good. I'm saying, if you're going to get into that wild ass, or you could just take your money, drive up to the casino and get the same result.
Speaker 1:Throw it out that way, yeah.
Speaker 2:Yeah.
Speaker 1:At least. Well, I guess this is kind of like gambling too. It's the same kind of rush. It goes up, it goes down like a stock. Sure, you obviously a little more stable.
Speaker 3:I liked it. It was, it was really interesting. Like I said, I told you guys I didn't read. I tried to read into this. It kind of made like my frontal lobe hurt a little bit, I felt. I felt like a mind fucked a little on this, but it is it's. It's crazy, it's it's just too. I don't know. There's who knows. It could be something else, or people like invest in this, invest in that.
Speaker 1:I will say back to that, like talking about the VR world and all that, honestly, like there's people that talk about that. There's people that are buying real estate in the virtual world now?
Speaker 1:Yeah, for sure. So like, for instance, snoop Dogg had a piece of real estate in the virtual world I think it was him, for instance and a lots next to his virtual world house are worth X amount of dollars, like people are paying a premium because down the road that's what it's going to be. People are going to put VR headsets on and live in their avatar in these worlds and stuff. So, it's stuff that all you know it seems like science fiction, like the matrix, yeah.
Speaker 3:You think that's really going to happen, though? I mean, they've been talking about that on sci-fi for so long.
Speaker 2:I promise you it's going to happen.
Speaker 1:It's going to happen. It's happening now. There's people that don't leave their house and just live with their avatars in their VR world now on a smaller scale.
Speaker 2:And they live in their parents' basement.
Speaker 3:Nothing wrong with that.
Speaker 1:But Zab, that was a cool one. I'm glad you brought it in. I like these white collar crimes. The financial stuff.
Speaker 2:They're good Again. I'm sure he was great at math and of course anybody's going to see oh, these numbers are grown. Yeah, I'm worth billions. That's great. But just like me, this guy had no concept what money was or how much money he had, and he's just I don't know playing with it. I, I don't know.
Speaker 1:If they want to call it the money. Maybe it would have panned out, Maybe they would have gambled the money and replaced it, and none of this would ever happen, I think, when you take real people's money and you turn it into something that was this and you're the one that created it and if you're the one that wants to make money on it.
Speaker 2:But you also want to be that altruistic and make sure that also other people are doing well. Everybody can't win all the time Somebody's going to get burned.
Speaker 3:And what was he? He was sentenced to. How many years? Again 25., 25. For most of his charges were conspiracy right, he was conspiring to do all this shit.
Speaker 2:So it's like a Don and a think of the Godfather, right? So the Godfather wasn't the one killing people, but he pushed the buttons. He had the people do it for him. Same concept. So, while he wasn't necessarily pushing the buttons, he had the developers and the programmers and the whomever and the salesmen and you name it, doing all of the stuff that he wanted them to do.
Speaker 3:Kind of like Manson with money.
Speaker 2:Not unlike Manson. There you go, there you go. Mind control yes, mind over matter. Nice.
Speaker 3:Doesn't matter. I got my mind on my money and my money on my binary Bitcoin mattress FTX.
Speaker 1:Yep, but yeah, that was a good one. We'll definitely be back next week with a vintage cinema review. I think we're doing die hard, so that'll be a good one. Oh, nakatomi, yeah, so, and then a week after that, hopefully back to true crime. We'll see, though you never know In the basement, yeah.
Speaker 2:So guys got anything else? No, I'm done, my mind's burned out. Yeah, thank you for Sam Bankman Fried, my my, my Fried. Oh sorry.
Speaker 3:I was saying my mind is fried, macaulay Culkin, from all those big, big words.
Speaker 1:Yeah, so don't forget to find Old Dirty Basement on Facebook and Instagram at Old Dirty Basement, and on TikTok at Old D basement podcast. I guess that's it for now, so we'll catch you where on the flip side If we don't see you sooner, we'll see you later.
Speaker 3:Peace. Thanks for hanging out in the old, dirty basement. If you dig our theme music like we do check out the tsunami experiment, find them on Facebook. Their music is available streaming on Spotify and Apple and where great music is available.
Speaker 1:You can find us at old dirty basement on Facebook and Apple and, where great music is available, you can find us at Old Dirty Basement on Facebook and Instagram and at Old Dirty Basement Podcast on TikTok Peace, we outie 5,000. You.