GM. This is the Milk Road. It’s been another crazy day in crypto.
So let’s get right into the action.
THE FTX SAGA CONTINUES
People are asking us – Are you feeling disappointed?
Yes, it’s disappointing to find out FTX was lying & misleading customers.
Yes, we are preparing for more pain. (This isn’t just going to blow over in a day)
Yes, the Milk Man came into work today with his “This is Fine” hoodie.
But we’re not going anywhere. We’re still in it for the long haul.
ALRIGHT – so what’s the latest on the FTX saga?
Well yesterday, we got word that Binance (the company that was supposed to buy & bail FTX out of this mess) is NOT going through with the deal.
If the richest man in crypto can’t bail out FTX, then it’s unlikely anyone can/will.
Here’s a leaked image of how it went down:
So, how big is the damage? It’s reported that FTX has a ~$10b hole in its balance sheet. You can check out the tangled web of cross-holdings FTX had here.
Samuel…what did you do…?!
Now Justin Sun says he’s trying to put together a plan to bail it out. Yea, the guy behind “Tron”. That’s what this has come to… sad!
Then this morning, Samuel released his official “apology”.
1) I’m sorry. That’s the biggest thing.
I fucked up, and should have done better.
SO, WHAT HAPPENS NEXT?
I won’t lie… it’s gonna get uglier before it gets any better.
Today, Samuel announced that Alameda is “winding down trading”. (R.I.P – Alameda Research)
FTX will do everything it can to raise money for liquidity over the next week. But “no promises”.
If FTX can’t successfully raise money, they will most likely file for bankruptcy.
FTX, Alameda, and FTX Venture’s websites are all down. Withdrawals are frozen and users are locked out of their funds.
Most of FTX’s legal & compliance team have quit.
The SEC and the Department of Justice are investigating everything. Get ready for the hammer to come down.
VC investors are taking a big hit. Sequoia has already marked their FTX investment down to $0.
And other big investors like Jump, Genesis, Paradigm, etc will most likely all suffer from the FTX contagion. Here’s a list & thread of people that had exposure to FTX.
Oh, and did you order some extra SALT with this news? This week marks 1 year since Ethereum hit its all-time high of $4.8k and Bitcoin hit its all-time high of $69k.
OK, that’s a lot of bad news.
But let’s ask ourselves, what are some positives that will come from this?
1/ Exchanges will face more regulation, and customers will now demand to see Proof-Of-Reserves.
When the tide goes out, we see who’s swimming naked. Turns out, these exchanges were partying at a nude beach.
Having proof of reserves will help make exchanges safer in the long run. (OKX, Binance, and others have announced they’re dropping theirs soon)
2/ More people will learn to self-custody their assets.
People are learning the golden rule in crypto: “not your keys, not your cheese”.
Now everyone is racing to get their money off exchanges and onto hardware wallets
**BREAKING: LIVE FOOTAGE FROM LEDGER HQ**
3/ Anyone who survived 2022 has earned their “OG” status. You will never need to hear those 2013 crypto snobs tell boring Mt. Gox stories ever again. Congrats! FTX is your Mt. Gox!
So is this the end for crypto?
Crypto is a lot like the rapper 50 Cent right now. They’ve both been shot like 10 times and are still alive.
Crypto will survive this one too.
*”Yo Milk Man, hit em with the Many Men remix”*
“Many Men, wish red upon me
Blood on my screen dawg and I can’t see
I’m trying to be what I’m destined to be
And they trynna take my bag away”
*** P.S – HERE ARE SOME MORE OF THE BEST TAKES FROM TWITTER
In retrospect, seeing Sam’s health deteriorating week after week (getting fat, translucid, shaking on every podcast) was telling that something wrong was going on
You usually don’t turn into a goblin if everything is okay in your life https://t.co/wt9RWeeL2O https://t.co/I5nGGxMIPp
Unlike Voyager, Celsius etc where their terms of service allowed them to onlend or rehypothecate your assets for yield, FTX’s specifically states that title to assets remains with the customer.
Which means FTX was literally stealing customer funds. Clearest criminality so far…
calling it now, jonah hill plays sam in the subsequent movie made after all this shit unfolds https://t.co/w8HAovq55e
wtf he just played a league game https://t.co/7Ig5c2Go2N
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MEME OF THE DAY
The next season of Squid Games is gonna be crazy🤣🤣
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That’s a wrap for today. Stay thirsty & see ya tomorrow!
If you want more, be sure to follow our Twitter (@MilkRoadDaily)
A ROADERS REVIEW
VITALIK PIC OF THE DAY
One man in crypto we can still trust https://t.co/XVn2KltZNw
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.