What’s the connection between FTX and cannabis? Is it FTX’s appeal to cannabis companies to do banking with them? Or is there a bigger picture to consider?
Sam Bankman-Fried (SBF) is the former head of the cryptocurrency exchange FTX. Authorities have charged him with defrauding customers and investors. He was arrested last month and released on a $250 million bail.
If convicted, SBF faces more than 100 years in prison.
While the 30-year-old former billionaire refuses to admit he defrauded anybody, the lesson here is less about SBF’s hubris and more about how the corporate press covers stories like this.
You might think FTX is a failed cryptocurrency exchange that defrauded customers if you read nothing beyond the headline. Hence, you shouldn’t trust cryptocurrency and place all your faith in fiat currency and the government-regulated banking system.
It’s the same level of thinking you get when people refer to THC‘s effect as a “psychosis” or believe legal edibles result in more hospitalized children.
So what is this FTX scandal really about? What’s the connection between FTX and cannabis?
Does FTX Highlight the Flaws in Cryptocurrency?
FTX was THE hot commodity in the crypto world. Invited to the White House, endorsed by celebrities and major sports venues. Sam Bankman-Fried was on top of the world until his initials became synonymous with Scam Bankrupt-Fraud.
But SBF and FTX engaged in a practice called “hypothecation.” This is when banks, brokers, or other financial institutions take from their customers’ deposits and put them up as collateral in other deals. Do this repeatedly, and you’ve boosted your profits.
Of course, the initial theft from your customers’ deposits is a little problematic. This is why, if you own crypto, you need a hard wallet for cold storage.
Keeping your crypto on a centralized exchange puts all your eggs in a basket you can’t trust. And the FTX may have been the least trustworthy of them all.
Media may paint FTX as a failure of crypto, but in reality, it’s another financial institution failure. What took FTX down was the same kind of recklessness that decimated the big banks in 2008.
When you deposit with a major bank, that money becomes the bank’s asset. Legally, it’s not your money. It belongs to the bank. You become an unsecured bank creditor, and the bank can gamble away your money on half-baked loans and investment scams.
FTX’s business model was similar to your local bank’s. They took in deposits which became their assets, so their customers became unsecured creditors. They could do this without crypto, which occurs daily in the traditional banking sector.
FTX isn’t a failure of cryptocurrency, which promotes transparency and decentralization. FTX’s fall was a bank run. Customers grew wise to their fraud and demanded their deposits back.
FTX’s Political Connections
The propaganda about FTX is like that of cannabis. If you rely on the corporate press, you will be misinformed.
While corporate press painted the fall of FTX & SBF as a surprise (or ignored it altogether), those paying attention saw the writing on the wall. Hell, this YouTuber did more investigative journalism in twenty minutes than CNN has done in twenty years.
Perhaps it’s because SBF was one of the biggest political donors in the United States, with 99% of his donations going to Democrats. (Politicians will take billions in donations without question but then pass laws requiring banks to report to the authorities if you withdraw a large amount of your money).
Consider how deep this rabbit hole goes.
In 2022, SBF donated $40 million to Democratic Party candidates, second only to George Soros’ contribution.
Klaus Schwab’s World Economic Forum gave FTX a perfect ESG score. According to the corporate press, FTX was a world leader in environmental, social, and governing causes. For those of us who don’t rely on the Pravda, we know a perfect ESG score meant they were towing the Party Line.
After SBF’s downfall, the WEF rushed to scrub any mention of FTX from their website. Fortunately, we still have the Wayback Machine.
SBF had Tony Blair and Bill Clinton fly to the Bahamas for an FTX event. For a thirty-year-old running a three-year-old crypto exchange, he sure had a lot of connections to elites.
But this is only scratching the surface.
SBF’s father is a leading scholar in tax law and worked with Senator Elizabeth Warren to draft a new tax bill. Interestingly, Warren is one of the loudest anti-crypto voices. This real-life Karen has never faced a problem she believes couldn’t be fixed by more government intervention.
SBF’s mother is a co-founder of Mind the Gap, a secretive Silicon Valley PAC that supports the Democrats.
Caroline Ellison was CEO of Alameda Research, a trading firm founded by SBF and based out of Hong Kong. Alameda acted as a sister company to FTX, which helped facilitate the scam. Caroline was rumoured to be romantically involved with SBF.
Caroline Ellison’s dad is Glenn Ellison, department head of economics at MIT, where SBF studied. It’s a known fact that Gary Gensler (the chair of the U.S. Government Securities and Exchange Commission) was a professor at MIT who offered courses on crypto and blockchain technology.
During his MIT career, Gensler was in close connection with Glenn Ellison and his daughter, Caroline.
FTX & Cannabis
FTX was essentially a Democrat Party money-laundering scheme. That’s why the corporate press first ignored it, then had a muted response. And now their narrative is convoluted that few understand what happened beyond defrauding customers.
(We also get blatant lies from the corporate press that SBF was nonpartisan in his political donations despite 99% of his contributions going to the Democrats).
But what about FTX and cannabis?
In early 2022, FTX began reaching out to U.S. cannabis companies. Unable to get basic banking services, FTX saw an opportunity. The idea was to offer banking services that the traditional financial institutions in the U.S. couldn’t (or wouldn’t) provide.
Since FTX’s downfall, any potential partnership has likely disintegrated. But this highlights how badly U.S. cannabis companies need banking services.
Overall, the lesson behind FTX’s fall and the cannabis industry is one of failing regulators. People assume that if we had the right people in charge with a sizeable budget, regulators could have caught FTX’s scam before it ballooned into something more significant.
But this ignores the connections between FTX players and the refs who are supposed to be regulating them.
The Lesson with FTX & Cannabis
Never in history has the idiom that the fox is guarding the henhouse been more relevant. Whether it’s elite-connected MIT grads defrauding people to benefit the Democrats or self-serving politicians who refuse to budge on cannabis-related issues.
Consider, while regulators tried to ignore the growing FTX scandal, the IRS reminded Americans to declare online transactions over $600.
The lesson here is that government regulators represent their own interests with their own sense of justice.
They won’t help your cannabis business and certainly won’t prevent future fraudsters like SBF from scamming the masses.
The best thing you can do is insulate yourself from this madness. Find work where an employer can’t fire you for refusing an experimental vaccine. Or where you don’t have to participate in “diversity” struggle sessions.
Own physical gold and silver. Grow your own food. Secure your property and the energy required to maintain it.
It’s clear from how the corporate state responded to FTX, when push comes to shove, they will not help you. We are to the elite what cows are to farmers. And while we may think this is a dairy farm, they’re leading us to a slaughterhouse.