Erik Voorhees and Cobie on Why FTX Loaned Out Customers’ Assets – Ep. 419

 Erik Voorhees, founder of ShapeShift, and Jordan Fish, aka Cobie, crypto investor and host of UpOnly, talk about the collapse of FTX. 

Show highlights:

• the links between FTX and Alameda
• what kickstarted the blowup of FTX
• why Erik and Cobie think that Bankman-Fried’s behavior was “sociopathic”
• why the $10 billion hole is so shocking to Cobie considering the advantages that FTX had as a company
• whether this would have ever happened if the prices hadn’t plummeted in the bear market
• the tension between advocates of privacy and those who want to limit criminal activity
• why Erik believes that SBF’s donations to both political parties are bribery
• whether regulators can prevent an exchange from collapsing
• whether Changpeng Zhao did a better job at investigating FTX than anyone at the SEC
• the likelihood that this will result in criminal charges
• how blockchain technology is the solution to the problem of centralized exchanges doing things in the dark
• Tether’s decision to freeze USDT owned by FTX
• Erik’s response to Bitcoin maximalists who say FTX was caused by altcoins
• whether it is a mistake for exchanges to issue their own tokens
• how big the contagion could be in the industry
• why nobody should leave a significant amount of their net worth in a centralized exchange
• Erik’s message to regulators
• whether SBF was aligned with the values and the ethos of crypto

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Episode Links

Previous coverage of Unchained:

FTX Collapse:

• Unchained coverage:

• FTX May File for Bankruptcy After Binance Walks Off the Deal
• FTX Needs $8B to Meet Investor Withdrawals: Report
• Tron Founder Justin Sun Says He Is Working With FTX on a Solution
• US DOJ Joins SEC and CFTC Probe of FTX
• FTX-Issued Wrapped Solana Tokens Could Add to DeFi Contagion: wBTC Creator
• Sequoia Capital Writes Off $214M FTX Investment to Zero

Binance’s dropped deal with FTX

• Unchained coverage:

Crypto regulation