In the series “Not your Keys, Not your Bitcoin,” I call to the stand Sam Bankman-Fried. The now-infamous SBF who just turned FTX and Alameda into the biggest fiasco in cryptocurrency history!
When a case like this breaks out, you are (unfortunately) never at the end of the (bad) surprises. That's what's happening right now for FTX, with new revelations that have just come to light.
What's most incredible is that these revelations were delivered half-heartedly by Sam Bankman-Fried himself. While his lawyers have told him to stop talking publicly about the case, SBF continues to do whatever he wants, talking all over the place in an attempt to burnish his image only one month after FTX declared bankruptcy in America.
And by dint of talking, SBF multiplies the mistakes that will cost him dearly at the time of the trial that awaits him.
After a remarkable interview with the New York Times journalist Andrew Ross Sorkin during which SBF wanted to make believe that he is not a fraud, but rather an entrepreneur who let himself be overtaken by the dazzling success of his company, SBF participated in a Twitter Space with the CNBC journalist Ran Neuner.
Logically, SBF was asked about the real existence of the BTC units that FTX claimed to hold for its clients.
Ran Neuner's question is clear: “We, the customers, owned Bitcoins. But those Bitcoins didn't exist, you were just letting us buy fake Bitcoins?
SBF's response might shock you because he didn't even try to deny it, “I think what you're saying is pretty much what happened.
A small sentence that seems to start a change in the man who is at the center of one of the biggest disasters in the history of cryptocurrency. While previously the young 30-year-old completely denied the comparison with Bernard Madoff and claimed in a rather mind-blowing interview that he did not know any illegal use of the funds stored on the platform, this time he seems to want to show a clean slate. It remains to be seen whether this candor will pay off.
For those who are interested, I recently proposed to rank Sam Bankman-Fried in the pantheon of the biggest financial scams since the early 2000s. All the details can be found here :
You will see that SBF is in good company if I may say so:
Bernard Madoff - Sentenced in 2009 to 150 years in prison
Elizabeth Holmes - Theranos - Sentenced in 2022 to 11 years in prison
Bernard Ebbers - WorldCom - Sentenced in 2005 to 25 years in prison
Jeffrey Skilling - Enron - Sentence in 2006 to 24 years in prison
Dennis Kozlowski - Tyco International - Sentenced in 2005 to 8 years and 4 months in prison
It remains to be seen what fate awaits SBF. But for that, we will have to wait for some time and for the many twists and turns that are bound to occur in this type of scandalous case.
To get back to the heart of the matter, you should know that a cryptocurrency platform must normally own at least as many cryptocurrencies, and therefore BTC, as is displayed on all accounts opened with it. This makes sense.
However, until you have the private keys associated with your Bitcoin in your possession, you have no real expectation that the platform will not sell you fictitious Bitcoins as SBF seemed to do with FTX.
It is in this sense that BINANCE had held at the end of November 2022 to show its Proof of Reserves in which we could see that the leader of exchanges had in its coffers 582,000 BTC, while its customers show a total of 575,000 BTC. This is reassuring!
Let's also note that while CZ is vocal about the Proof of Reserves proposed by Binance from now on, it is Kraken that launched this initiative at the beginning of 2022. And Kraken launched this initiative without any pressure from the market. Simply because the trading platform is managed as it should be.
All Bitcoin Trading Platforms Are Not Equal – Kraken Stands Out With Its Proof of Reserves
Take possession of your Bitcoin by transferring it to cold storage. A hardware wallet is essential for this. LEDGER and TREZOR are the two market leaders, and a few months ago I offered you a comparison of their different products.
Trezor vs. Ledger – Which Is the Best Hardware Wallet To Use With Bitcoin?
Ledger has just released its latest product, the Ledger Stax, which the startup hopes will become the iPod of the hardware wallet world. A huge ambition for Ledger which has surrounded itself with the advice of the father of the iPod for the design of its brand-new product that I detail here: “Cryptocurrency Security: Ledger Unveils a New Device, the Ledger Stax, Designed by the Father of the iPod.
The price is a bit higher than Ledger's entry-level products, but in any case, if you want to make your security a priority, then you will end up buying a hardware wallet. Whether it's from Ledger or Trezor. The sooner the better to protect the fruits of your labor from censorship, corruption, and people like SBF, Do Kwon, or Alex Mashinsky.
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