Some of FTX’s individual and institutional partners included the infamously sleazy Anthony Scaramucci and “Shark Tank’s” Kevin O’Leary, in addition to professional athletes like Tom Brady and his ex-wife Gisele, along with venture capital behemoths like Sequoia Capital. These forces were either recklessly neglectful or purposely chose to skip basic due diligence procedures while partaking in this Madoff-like too-good-to-be-true crypto investment scheme. But given that some very powerful interests may want to “claw back” their investments, that may raise the likelihood that SBF does indeed do the time for his crimes.
Of course, the real victims of Bankman-Fried are hardly the aforementioned high-profile individual and institutional partners, but retail customers who held assets on the platform, and wrongly trusted the platform to act as a safe custodian for their wealth.
For the victims of the crypto Ponzi, this episode will serve as an indelible lesson in the importance of taking custody of their own assets. This hard lesson of unearned blind trust may even serve as an “orange pill” moment for the countless victims of Bankman-Fried’s Ponzi scheme.
For years, Bitcoiners have made it a sticking point to encourage “hodlers” to take possession of their assets and assume personal responsibility. Leaving assets on centralized exchanges like FTX possessed a fatal but completely avoidable counterparty risk. Unlike in the traditional financial system, where one cannot simply take physical possession of their investments, one of the advantages of Bitcoin is that you can easily hold your asset in a permissionless, secure fashion.
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