As the impact of the FTX collapse continues to unfold, there are several aspects of the event that reach well beyond the cryptocurrency world. And as more information comes out, the more important the situation appears.
A Few Facts and Curious Coincidences
First of all, the massive financial scandal has left investors with billions of dollars in losses. That in itself makes the debacle one of the costliest on record. The speed at which FTX both attracted investors and lost all of its money is also unprecedented. Its CEO, Samuel Bankman-Fried (also known by his initials SBF), went from a net worth of up to $26 billion to essentially broke in a matter of days.
It’s also amazing how Bankman-Fried was able to acquire such a large amount of investor cash so quickly and publicly.
Why didn’t that attract some sort of regulatory inquiry despite warnings from market experts in congressional testimony?
The Madoff of Cryptos
This is a very good question since the dynamics of the collapse involved evident malfeasance on the part of Bankman-Fried. Not only were basic capital protections ignored, but FTX investors’ cash was diverted into Alameda Research, an investment firm owned by SBF. That’s an illegal and unethical conflict of interest that should have already drawn criminal charges against him, especially in light of the scope of the financial losses. He has rightly been described as the Bernie Madoff of cryptocurrency.
Yet somehow, amazingly, SBF has yet to be arrested. What’s more, regulators missed these obvious red flags. Or did they simply ignore them?
And if regulators ignored the FTX transgressions, why would that be?
The simple answer, though certainly not the only or complete one, is that Bankman-Fried and FTX were and remain politically connected to very powerful people. That’s a well-established fact.
Son of Stanford Professors
Another well-established fact is that Bankman-Fried’s parents are both Stanford professors. His mother, Barbara Fried, teaches courses in federal income taxation, legal theory, tax policy, distributive justice, and moral psychology. His father is an expert in taxation policy and has testified before Congress. Both are deeply connected to the Democratic Party establishment, and both profited handsomely from FTX to the tune of some $300 million in properties.
Turning a Blind Eye
But did politicians help protect FTX along the way?
That, too, has yet to be established. It is a fact, however, that the political elite in Washington, our elected representatives, benefitted greatly from FTX. Since 2019, Bankman-Fried has been the second largest donor to the Democratic Party, contributing $38 million of essentially stolen investor funds from FTX to the party.
But it wasn’t just the Democrats that were funded by FTX. In that same period, Bankman-Fried’s co-CEO, Ryan Salame, who ran various parts of FTX, donated about $20 million to the Republican Party. So both parties gained from large financial contributions by FTX.
One can’t help but wonder how many blind eyes and legal protection such contributions may have bought Mr. Bankman-Fried. That is speculative but not unreasonably so.
Tainting the Bitcoin Well
Furthermore, hundreds of millions of dollars have been stolen from the exchange and funneled into bitcoin. That dynamic is turning the world’s top cryptocurrency into a haven of thieves and tarnishing its already damaged reputation. Bitcoin is already under duress as energy costs associated with mining have risen while bitcoin’s price and credit sources have contracted.
The timing of the FTX collapse is another coincidence. It certainly helps the anti-cryptocurrency crowd. Critics warn that money, especially cryptocurrency, is just too important to leave to the market and private issuers.
That argument sounds reasonable, but it’s also highly coincidental with the FTX crash occurring in the same period as the Federal Reserve’s public announcement and initial testing of its Central Bank Digital Currency, known as the digital dollar.
Why’s that important? There are at least a few reasons.
A Perfect Crisis for the Digital Dollar
One is that the FTX crash is the perfect crisis to help “demonstrate” to the public that unregulated, decentralized, and anonymous exchanges, and trades and holdings of cryptocurrencies that are beyond the purview of the federal government pose a threat to investors.
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That’s true, but the same could be said about unregulated real estate transactions or the buying and selling of used cars. Nonetheless, the cryptocurrency chaos can be used to justify a federal crackdown on the industry.
Another reason is that the American public will not be easily convinced of the need or desirability of the digital dollar. The FTX collapse may be one way to help shatter public confidence in all cryptocurrencies as safe and viable alternative investments in order to persuade the public to accept the issuance of the digital dollar.
The digital dollar will be transparent and programmable to provide the Fed with new levels of control over our spending habits, strip away privacy, and greatly restrict personal autonomy. In short, digital currency is a formula for tyranny that will be presented as needed for currency security.
Who Are the Shadow Players?
There are other curiosities about FTX and its sudden downfall, such as the identity and influence of FTX and Alameda Research co-founder and CTO Garry Wang. He has been silent so far, and not much is known about him.
Finally, it’s certainly coincidental that Bankman-Fried sought a bailout from his industry rival Changpeng “CZ” Zhao, owner of Binance, the world’s largest cryptocurrency exchange. Some believe that China-born Zhao’s loyalties still lie with Beijing. That is not known at this time.
But as enigmatic as the people surrounding the fall of FTX appear to be is how it was allowed to happen in the first place, which leads to at least one more question …
Was FTX designed to fail?
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of our premium news partners at The Epoch Times.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
