Crypto’s house of cards is collapsing fast

Surprisingly, the Bitcoin price itself held up well in the aftermath of the scandal. On Tuesday, the price per coin rallied back above $16,000 (£13,000) and is only down $20,000 since FTX started to unravel. This is not a dramatic drop by digital token standards, although it was already a far cry from the $60,000 it hit last year.

Investors can hold their money well, as long as they haven’t bought at the top or through FTX, and they have strong nerves. Bitcoin itself can survive this crisis as it has experienced several previous ones.

The real damage will be done to FTX cheerleaders and outriders. Serious questions must be asked of all the people and institutions that helped create the fiction of Sam Bankman-Fried as a boy financial prodigy.

It emerged this week that consultancy Bain may have helped Tiger Capital’s due diligence work on its investment in FTX. Seriously? After all, this is a company that, according to John Ray, the man enlisted to clean up the messdidn’t even have the kind of financial records in place that you might expect from your local window cleaner, where three or four billion dollars could be transferred without anyone writing them down.

Admittedly, we no longer have high expectations of Bain either. After all, it’s only been a few months since the company was banned from working for the UK government for three years after getting caught up in a scandal in South Africa (and, taking a wild guess here, but that probably won’t be up sooner).

Then again, what exactly was Tiger, which was one of the most respected hedge funds in the world, investing in FTX?

Or, come to think of it, the big venture capital funds that backed Bankman-Fried, like Sequoia or Softbank, institutions that may have had big hits when internet startups were booming, but have since shown that they have very little judgment. (The Japanese Softbank was also a big investor in WeWork – maybe it should be renamed Soft Touch)?

Why were so many charities willing to take the company’s money, which the founder himself admitted was nothing more than to whitewash his reputation?

ProPublica may be proud of its investigative journalism, but its detective work doesn’t seem to have extended to questioning the big checks it was getting from FTX, and the same goes for the many other causes it gets. he has supported, including the many millions given to Democratic candidates in the United States.


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