Crypto... can be toxic as FTX demonstrates

 I've refrained from discussing crypto because there is no real "there" there... no company doing any business we could understand. No product being produced, no services offered to consumers. NOTHING! and people were willing to invest lots of money. Sigh.

News about the collapse of FTX has been all over The Wall Street Journal for weeks. Each article reveals more appalling aspects of how money was stolen from crypto investors. 

 I couldn't resist adding this from 12/16/22 WSJ: "In 2017, Warren Buffett's longtime business partner Charlie Munger, said of Crypto: "I'm proud of the fact that I avoided it. It's like a venereal disease or something." 

Another reason to avoid Crypto: It consumes VAST amounts of electricity!

"Sam Bankman-Fried Ran FTX Like a Personal Fiefdom, Lawyers Say. In bankruptcy court, the crypto exchange’s attorneys said a ‘substantial amount’ of the firm’s assets are stolen or missing."Alexander Saeedy and Jonathan Randles, WSJ, Nov 23, 2022.

"FTX's Sam Bankman-Fried cashed out $300 Million during funding spree. Nearly three-quarters of the $420 million that FTX raised in a fundraising blitz last year went to founder Sam Bankman-Fried, who sold some of his personal stake in the company." WSJ 11/18/22.

"FTX Crypto customers Worry They Will Never See Their Money Again. FTX lawyers have said that in all there could be more than 1 million creditors across FTX's various entities. Beleaguered crypto customers are beginning to lose hope."

"If there is a silver lining to the rapid and dramatic collapse of the cryptocurrency exchange FTX, it’s that it might lead to some long-awaited bipartisanship in Congress — to pass long-needed regulation of Big Tech."  

By Katrina vanden Heuvel writing for The Washington Post, November 22, 2022. "FTX filed for bankruptcy on Nov. 11. The company’s founder and chief executive, 30-year-old Sam Bankman-Fried, has stepped down and lawyered up." "This represents a reckoning for cryptocurrency, a market that has gone underregulated for its entire existence." 

"While FTX’s downfall may be the first cryptocurrency scandal of this scale, the story is all too familiar. Allegedly, Bankman-Fried loaned $10 billion of his customers’ dollars to his investment company, Alameda Research, and used it for risky day trading. When consumers lost confidence and tried to pull their money out, they learned that FTX did not have their funds on hand. FTX covered up the misuse from its customers, its auditors and its own employees."

 

 Katrina vanden Heuvel writing for The Washington Post: "While FTX’s downfall may be the first cryptocurrency scandal of this scale, the story is all too familiar. Allegedly, Bankman-Fried loaned $10 billion of his customers’ dollars to his investment company, Alameda Research, and used it for risky day trading. When consumers lost confidence and tried to pull their money out, they learned that FTX did not have their funds on hand. FTX covered up the misuse from its customers, its auditors and its own employees.

My advice if you own crypto: Sell and invest in a real company that produces products and/or services.