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Casino Card Tricks Helped Burst the Crypto Bubble – Report –

Posted: November 23, 2022, 11:17 a.m.

Last update: November 23, 2022, 11:17 a.m.

According to a new report, card counting and other casino tricks featured prominently in the strategy of a former hedge fund chief whose risky bets contributed to the collapse of cryptocurrency exchange FTX at the beginning of the month.

Bloomberg News was the first to spot former Sam Trabucco Twitter threads that clearly depicted how the 30-year-old former crypto executive applied his knowledge of gambling strategies to crypto trading and other business decisions. Trabucco stepped down in August as co-CEO of Alameda Research, FTX’s sister company.

bitcoin dice cards
According to a recent report, casino card tricks heavily influenced the strategy of a cryptocurrency leader. (Image:

The story provides insight into the mindset of those who artificially inflated cryptocurrency into a bubble that encouraged millions to lose billions when it burst dramatically earlier this month.

“Bet big on the descent”

When XRP, the native cryptocurrency of the Ripple money transfer network, plunged amid speculation of a Securities and Exchange Commission investigation, “we just bet as big as the liquidity would allow us to take some money.” ‘momentum on the way down, which went well’, Trabucco tweeted in January 2021. “We made a list of all the bad news that we thought was likely, and we just kind of waited for it to come out. Delisting from Bittrex? Hit. Removal of grayscale? Hit. Etc. We were less short once these “seemed complete” (it was more a matter of intuition on timing than anything).

Sam Trabuco
Sam Trabucco is the former co-CEO of Alameda Research, whose risky bets contributed to the collapse of cryptocurrency exchange FTX this month. (Picture: Twitter)

In the same series of tweets, Trabucco alluded to blackjack card counting, posting, “I may or may not get banned from 3 casinos for this.”

Although the veracity of Trabucco’s claim has yet to be investigated, its assumption of risk appears to have contributed to the losses that sent Alameda, FTX and more than 130 related entities to bankruptcy court this month. Within 10 days, FTX plummeted from a $32 billion valuation to nothing as liquidity dried up and customers demanded withdrawals.

Although little is known about the collapse, a report by cryptanalytics provider Nansen suggested that Alameda may have held too many hard-to-trade coins, causing liquidity issues, and that FTX may have bailed out Alameda with a loan using the illiquid tokens as collateral.

Bubble factor

Speaking on an episode of the YouTube show UpOnly in 2021, Trabucco recalled playing poker in his early twenties, while earning a degree in math and computer science from MIT and later trading at the Susquehanna International Group.

“Now I really don’t tilt much anymore,” he said, referring to a poker term for when players let their emotions guide them. Although Trabucco said he was now trying to avoid tipping, he admitted to buying on impulse at times.

A tweet from Trabucco from July 2022 showed a poker table with chips on it, captioned: “I should stick to trading.” Indeed, Trabucco posted his follow-up tweet from Las Vegas.

Trabucco, who has never been accused of wrongdoing, resigned as co-CEO of Alameda in August, leaving Caroline Ellison as Alameda’s sole chief.

“If I learned anything at Alameda, it’s how to make good decisions – and this is the right one for me,” he tweeted at the time.

When CoinDesk reported on Nov. 2 that Alameda — with $8 billion in liabilities and $14.6 billion in assets — was insolvent, Trabucco took to Twitter to debunk the story.

“Bonkers how people instantly 100% believe every ‘new’ shit story they see,” he tweeted.

Apparently Trabucco was bluffing.

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