FTX WAS CRASHED BY "CHINESE CRYPTO SPOOKS"

The long promised-multipolar World has already arrived. This is especially clear in the world of crypto and the collapse last year of the Bahamas-based but US-aligned FTX.

The crypto exchange/hedge fund, headed by "crypto genius" Sam Bankman-Fried, was, it now appears, taken down by a Chinese-state-backed op. 

The conventional explanation for the downfall of  the crypto giant is that it was triggered by the May 2022 collapse of Terra LUNA, a Korean stablecoin that wasn't so stable, in which FTX and its "sister company" Alameda, invested heavily.

However, it seems that FTX was already hollowed out at that point by what appears to have been a "Chinese crypto spook" operation.

As reported by crypto news site Protos:

Indeed, FTX might have been insolvent for over a year by the time of the Terra LUNA implosion. In April 2021, MobileCoin, an ICO associated with the encrypted messenger Signal, had gone parabolic, pumping from under $2 in December 2020 to over $71 (MobileCoin is again worth less than $2 today).

In 2021, a trader on FTX acquired a massive amount of MobileCoin, a minor altcoin with an unknown market cap that was being suspiciously boosted. This was then used as collateral to borrow other assets.

The old familiar pump n' dump?

FTX/Alameda then lost up to $1 billion on these deals, leading it to raise $900 million from new investors in July 2021. Soon  after this, while FTX's name was still riding high, Sam Bankman-Fried essentially started cashing out :

In addition, starting with that $900 million raise in July 2021, FTX and Alameda founder SBF began to cash out with personal “loans” that he would, of course, never repay. By the time FTX’s fundraisers of July 2021, October 2021, and January 2022 had closed, SBF had personally withdrawn hundreds of millions of dollars.

These disbursements occurred months before Terra LUNA collapsed. Indeed, it was more likely that MobileCoin — plus these dubious “loans” to FTX executives — caused the downfall of FTX than Terra LUNA, which didn’t collapse until May 2022.

But who or what was behind the real cause of collapse, namely MobileCoin, investments in which essentially wiped out any hope of FTX achieving profitability?

Basically, it was a bunch of heavily China-connected dudes. 

It’s public knowledge that the team behind MobileCoin comprised one of the wealthiest groups in crypto: Li Xiaolai, Moxie Marlinspike, Eric Meltzer, Dax Hansen, and Todd Huffman. The group was connected to a number of early Bitcoiners in China — especially Xiaolai and Meltzer, both of whom lived there. “China’s richest Bitcoin billionaire” Xiaolai was particularly wealthy due to his participation in Dan Larimer’s enormous ICOs of EOS and BitShares.

In addition, one of Meltzer’s partners at Primitive Ventures, Dovey Wan, is rumored to have had a romantic relationship with Binance chief Changpeng Zhao (CZ).

But wouldn't these geeks just be in it for the money and to rip off Sam Bankman-Fried because he's a bit of dummy? Possibly, but bringing down FTX also serves wider Chinese strategic goals, as FTX was the only possible rival to the Shanghai-based Binance crypto exchange. 

The US government clearly seems to think so, as it started to hit back hard at the Chinese crypto giant last month.

As reported by Bloomberg:

The US took its most forceful move yet on Monday to crack down on crypto exchange Binance Holdings Ltd. and its chief executive officer Changpeng Zhao. 

The Commodity Futures Trading Commission alleged in federal court in Chicago that Binance and its CEO, who is known as CZ, routinely broke American derivatives rules as the firm grew to be the world’s largest trading platform. Binance should have registered with the agency years ago and continues to violate the CFTC’s rules, according to the regulator.

We live in an era of multipolar crypto wars -- yet another reason to put your savings into stonks, bonds, artworks, gold, or land, rather than a lot of fucked-up numbers that even the guys running crypto don't fully understand.

LOL, crypto version. pic.twitter.com/6hDIkpbJva

— Colin Liddell (@cbliddell) April 7, 2023