The Crypto Token Economy Is Second-Order Fraud

Source: Quillette
by Sohale Mortazavi

“In November, FTX, a major cryptocurrency exchange branding itself as the responsible, good-faith actor in an otherwise dodgy industry, was the next domino to fall. Leaked balance sheets from FTX’s sister company, Alameda Research, revealed that the trading firm was holding most of its assets in FTX’s house ‘token,’ FTT. This raised questions about the unusually close relationship between the two firms (it was later revealed that FTX was secretly and illicitly funneling depositors’ funds to Alameda to fund risky crypto investments), as well as their solvency. … FTX was claiming $US9 billion in liabilities but only $US900 million in liquid assets. Most of their assets were marked either “less liquid” or ‘illiquid.’ As with other failed crypto firms, FTX was holding the lion’s share of their assets in obscure cryptocurrencies issued by the firm itself or other companies and projects with close ties to FTX or its disgraced CEO Sam Bankman-Fried.” (01/24/23)

https://quillette.com/2023/01/24/the-crypto-token-industry-is-second-order-fraud/