FTX Meltdown and the Future of Crypto: Live With Kraken Co-Founder Jesse Powell

The co-founder of the crypto exchange Kraken will join Reason's livestream Thursday at 1 p.m. Eastern to discuss the downfall of Sam Bankman-Fried and his company, FTX.

Zach Weissmueller and Nick Gillespie | 11.16.2022 5:04 PM

When a cryptocurrency exchange holding $16 billion worth of customer deposits suddenly collapses, what does that portend for the future of the crypto industry? How did Sam Bankman-Fried, the 30-year-old founder of the company and the number two donor to the Democratic party ahead of the recent midterms, win the trust and evade the careful scrutiny of so many venture capitalists, institutional investors, celebrities, and U.S. regulators for so long? Is heavy-handed regulation coming to the world of crypto?

Join Reason's Nick Gillespie and Zach Weissmueller this Thursday at 1 p.m. Eastern for a live discussion of these questions and more with special guest Jesse Powell, the co-founder and CEO of Kraken, one of the world's largest cryptocurrency exchanges. Ask questions or leave comments ahead of or during the stream on the YouTube video above or at Reason's Facebook page here.

Photo credit: Tom Williams/CQ Roll Call/Newscom

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Sarah Palin's Buttplug 2 2 years ago

It's just the nature of crypto.

In the free banking era when a bank folded your bank scrip became worthless.

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2. damikesc 2 years ago
  
  No, it's the nature of progressives committing mass fraud and being protected by bribing the right people.
  
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  1. MonicaBrock 2 years ago (edited)
    
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3. Truthteller1 2 years ago
  
  Made for bros by bros. Idiots.
  
  Log in to Reply
4. Liberty Lover 2 years ago
  
  I was also a funding rip-off to fund the Democratic party. Democratic politicians pushed ftx crypto along with a lot of liberal celebrities. Now the Democrats want to oversight and regulation on crypto, exactly what crypto was invented to prevent. Of course they want a government controlled cashless society. You saw what happened in Canada when the government shut down the truckers bank accounts. This is no more than another attempt at economic repression to keep the workers in line.
  
  “Decentralization prohibits one entity from controlling cryptocurrencies. Bitcoin was founded in 2009 because it lacked a central authority. Bitcoin has no transaction costs, so there’s no need for banks who demand huge fees and may close your account if you don’t pay them.“
  Cryptocurrency improves financial efficiency. It’s a digital currency without banks or governments.
  
  Log in to Reply
  1. Davedave 2 years ago
    
    "“Decentralization prohibits one entity from controlling cryptocurrencies. Bitcoin was founded in 2009 because it lacked a central authority. Bitcoin has no transaction costs, so there’s no need for banks who demand huge fees and may close your account if you don’t pay them.“"
    
    You do realise both those things are the exact opposite of the truth, right? The banking system doesn't charge for most transfers, and if it does, the charges are orders of magnitude less than the cost of transferring bitcoins, while Bitcoin is subject to central control any time the NSA or similar government actors fancies it.
    
    "You saw what happened in Canada when the government shut down the truckers bank accounts"
    
    That never happened, idiot.
    
    Log in to Reply
Dillinger 2 years ago

not meltdown, thievery.

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1. RabbiHarveyWeinstein 2 years ago
  
  Cool it with the anti-Semitism!
  
  Log in to Reply
  1. Dillinger 2 years ago
    
    my s.o. is m.o.t. so I'm covered.
    
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    1. NatashaLiu 2 years ago (edited)
      
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  2. Mother's Lament 2 years ago
    
    In before Shrike tells us criticizing one of the world's last living Nazi party members is anti-Semitic.
    
    Log in to Reply
  3. Granite 2 years ago (edited)
    
    There’s a lot bigger issues to deal with than the murders in Sri Lanka, Paul.
    
    Log in to Reply
Minadin 2 years ago

Seems like more of a Ponzi scheme / confidence game than a problem with the system itself.

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1. ElvisIsReal 2 years ago
  
  Yes. With a side helping of regulators in on the scam.
  
  Log in to Reply
2. Agammamon 2 years ago
  
  The system is a Ponzi scheme.
  
  Crypto is a 'bigger fool' scam.
  
  Log in to Reply
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JesseAz 2 years ago

How did Sam Bankman-Fried, the 30-year-old founder of the company and the number two donor to the Democratic party ahead of the recent midterms, win the trust and evade the careful scrutiny of so many venture capitalists, institutional investors, celebrities, and U.S. regulators for so long? Is heavy-handed regulation coming to the world of crypto?

You forgot invited by the DNC to formulate crypto policies.

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1. Red Rocks White Privilege 2 years ago
  
  ::How did Sam Bankman-Fried, the 30-year-old founder of the company and the number two donor to the Democratic party ahead of the recent midterms::
  
  ::win the trust and evade the careful (me: fuckin' LOL) scrutiny of so many venture capitalists, institutional investors, celebrities, and U.S. regulators for so long?::
  
  Yep, real mystery for the Scooby gang there.
  
  Log in to Reply
  1. JimboJr 2 years ago
    
    With minimal rearrangement, this would easily be a Bee headline. Life is getting that close to parody
    
    Log in to Reply
  2. Davedave 2 years ago
    
    :::: instead of (()) - we see you, Nazi.
    
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    1. Red Rocks White Privilege 2 years ago
      
      Shush, commie.
      
      Log in to Reply
  3. Granite 2 years ago
    
    Must be the Mormons fucking everything up again.
    
    Log in to Reply
Dillinger 2 years ago

>>win the trust and evade the careful scrutiny

also this part is the joke, yes?

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2. Overt 2 years ago
  
  This is a better video:
  
  https://twitter.com/i/status/1591070331988774913
  
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Earth-based Human Skeptic 2 years ago

Fortune favors the bold. Also the shameless and larcenous.

But fortune tends to stick with those that are not stupid.

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Nardz 2 years ago

https://twitter.com/LibertyLockPod/status/1592935271976570880?t=DhNt2ieFBJx4iPNnfY9OHw&s=19

It takes a few weeks to count the votes but they can start a World War based on nothing within 24 hrs

Yesterday we were as close to nuclear war as we have ever been in my lifetime and @reason magazine had it's intrepid journalists hot on the trail to track down the author of an @LPNational meme

I despise these people
Useless doesn't begin to express it

Log in to Reply
1. Davedave 2 years ago
  
  Why don't you fuck off to Russia, since you love Putin so much, Nardzi?
  
  Log in to Reply
2. Granite 2 years ago
  
  No we weren’t dude. We know where the missiles came from - we’ve got the best shit on the planet to track everything. Ukraine missiled the Poles intentionally because that’s just how Ukraine does war with Russia. Savages, the lot of ‘em.
  
  We would know before the missile hit if it was out of bounds by Russia, and rest assured, they wouldn’t deliberate about it at all, they’d just unleash all of our tax dollars on Russia until Russia has to try to nuke us - but they won’t even be able to do that very effectively because we’ve just got to much advanced shit and Russia has the tattered remains of a once great pretender world leader. They’re not scary, they won’t cause a world war, and the worst damage they can do is maybe get a couple nukes off before they get utterly leveled.
  
  To me, it’s worth getting nuked a couple times to just put and end to this horseshit.
  
  Log in to Reply
  1. Cyto 2 years ago
    
    You were not paying attention.
    
    "Senior intelligence officials" told the press that it was definitely a Russian missile that killed people in Poland. There was a 24 hour news cycle based on this reality.
    
    This was not "random rumor mill says". This was The New York Times reporting Senior Intelligence Officials saying....
    
    The next day, Senior Intelligence Officials gave interviews in which they acknowledged that it was a Ukrainian air defense missile.... but maintained that Russia was responsible and that the US and Nato must respond.
    
    Log in to Reply
  2. TheReEncogitationer 2 years ago (edited)
    
    Fine. Then you take the nukes first. So Ukraine is”savage” when they hit and ”savage” when they miss? I suppose you haven’t paid attention to what Putin did to Marosol or other civilian areas of Ukraine. You were saying about savages?
    
    Log in to Reply
InsaneTrollLogic 2 years ago

In most of the world, we call what FTX was doing, money laundering. Money laundering from the US government - your tax dollars, to the Democratic Party so they could fund and win elections.

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1. Agammamon 2 years ago
  
  Be fair - FTX' number two was funneling money to the GOP.
  
  30 mil to the D's, 20 mil to the R's.
  
  Gotta get in good with both sides.
  
  Log in to Reply
  1. Cyto 2 years ago
    
    The part getting glossed over? More millions to leftist media organizations like Vox.
    
    We do not know how much or how many press organizations were involved, or what they were buying.
    
    Did Nick spend any time trying to sus out that angle? Did Reason get some hush money?
    
    Log in to Reply
SRG 2 years ago

For the best analysis of the whole FTX debacle, you can't beat Matt Levine at Bloomberg.

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1. Minadin 2 years ago
  
  You could try beating the hell out of Sam Bankman-Fried.
  
  I'm not saying that physical abuse is likely to bring truthful answers, but it might be interesting to try.
  
  Log in to Reply
  1. Agammamon 2 years ago
    
    Creditors get one hit per dollar owed.
    
    Log in to Reply
The Ghost of OBL 2 years ago

Seems this was by design for two things. First was to funnel money to the Democratic party. The 2nd is to destroy crypto and decentralization in order to usher in the US digital dollar.

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Bill Dalasio 2 years ago

Bankman-Fried and FTX were a front. What we're being expected to believe is that the world's most sophisticated investors believed a guy a couple of years out of college (including a stint with a progressive NGO unrelated to the market) was the world's leading market expert and completely trusted him with billions while he was playing video games in sales pitch meetings, running a rolling orgy in the Bahamas, and spending more time talking politics than his talking his business. Oh, and did I mention, running a money manager at the same time as running the exchange? I don't have much confidence in our elites at all, but that level of "incompetence" defies credibility. The big players (counterparties, regulators) were in on the scam.

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1. Bill Dalasio 2 years ago
  
  Just as a small example. The ostensible regulator of FTX was Gary Gensler, the head of the SEC. Bankman-Fried's girlfriend and head of Alameda Research was Caroline Ellison. Her father is Glenn Ellison. Glenn Ellison was Gary Gensler's former boss, when both were professors at MIT. Bankman-Fried's alma mater? You guessed it - MIT.
  
  Log in to Reply
2. Davedave 2 years ago
  
  What 'world's most sophisticated investors'? No-one invested money with him except retail-level marks. He valued his own company at all-the-monies and a few hacks publicised his claims. No-one ever invested in it at that valuation though.
  
  Log in to Reply
  1. Bill Dalasio 2 years ago
    
    Sequoia Capital isn't exactly a "retail-level" investor.
    
    The Ontario Teachers’ Pension Plan? Millennium Management? Brevan-Howard? SoftBank? Lightspeed Venture Partners? Temasek?
    
    Log in to Reply
    1. Diane Reynolds (Paul.) 2 years ago
      
      The country of Ukraine?
      
      Oh wait, bad example. No, wait, good example. The Biden administration via the country of Ukraine. That's better.
      
      Log in to Reply
    2. Davedave 2 years ago
      
      Those entitities did not invest in FTX. Why are you just making stuff up now?
      
      Log in to Reply
  2. Red Rocks White Privilege 2 years ago
    
    You should probably be getting your news info from sources other than the teevee man, you hunch-backed hicklib eunuch.
    
    Log in to Reply
3. Red Rocks White Privilege 2 years ago
  
  If this whole thing was simply a slush fund for the DNC for the mid-terms like BLM was in 2020 during the Floyd riots, when they had been flat fucking broke as late as that spring, I'd honestly be pretty impressed at the brazenness of it.
  
  Set up a crypto bank as a slush fund, have the nominal head funnel donations to various Dem candidates to blunt the red wave and provide advertising for preferred primary opponents, then blow the whole fucking thing up when the job is done. And the best part is that the nominal head and his ex-girlfriend are a couple of socially fucked up drug addicts, so the normies get to laugh at the "dumb celebrities" who gave them money even though the end result had no actual effect on the celebrities wealth or elite status.
  
  Log in to Reply
Agammamon 2 years ago

Because Kraken is different, right? It's 'one of the good ones' right?

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1. Diane Reynolds (Paul.) 2 years ago
  
  And not even necessary! You don't need all these intermediaries and exchanges for crypto!
  
  Log in to Reply
  1. Overt 2 years ago
    
    BING!
    
    And even if you want to use an intermediary, you have no need to use them for banking.
    
    Log in to Reply
Diane Reynolds (Paul.) 2 years ago

How did Sam Bankman-Fried, the 30-year-old founder of the company and the number two donor to the Democratic party ahead of the recent midterms, win the trust and evade the careful scrutiny of so many venture capitalists, institutional investors, celebrities, and U.S. regulators for so long? Is heavy-handed regulation coming to the world of crypto?

You literally answered your question in the question. He was the #2 donor to the Democratic party ahead of the midterms.

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1. Social Justice is neither 2 years ago
  
  With reasoning like that I can see why you didn't go into journalism.
  
  Log in to Reply
Diane Reynolds (Paul.) 2 years ago

Nick asks a good question in the interview about how skepticism should be high when someone pops onto the scene as a media darling, literally checking every single box. with comparisons to Elizabeth Holmes. *shudder*

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Truthteller1 2 years ago

Yeah these thirty year old bros got it all figured out. Who knew it was a house of cards? Lmfao

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TheReEncogitationer 2 years ago

Does anyone else besides me think Sam Bankman-Fried looks like Curly rocking Larry's hair-do?

Is his defense going to be: "I was a victim of soi-cumstance! Nyuk!-Nyuk!-Nyuk!" 🙂

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1. TheReEncogitationer 2 years ago
  
  Or mwybe he seen a rat and went on a wild spending spree and kept screaming: "Moe! Larry! The cheese! Moe! Larry! The cheese!" 🙂
  
  Log in to Reply
Jgerich2323 2 years ago (edited)

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FTX Meltdown and the Future of Crypto: Live With Kraken Co-Founder Jesse Powell

The co-founder of the crypto exchange Kraken will join Reason's livestream Thursday at 1 p.m. Eastern to discuss the downfall of Sam Bankman-Fried and his company, FTX.

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