Have you seen the today’s DealBook’s vid interview with the “King of Crypto” Sam Bankman — Fried, the ex-CEO of the chapter 11 FTX?
Well, it is an infuriating hour long of “I didn’t think that”, “it made me a little nervous”, “I didn’t know” , “I hoped”, and “I didn’t expect” of a Boy CEO who either is a total crook, and he knows it, or at the least, he is incompetent…or a mixture of the two.
In essence, a tale of another lost boy (or a girl)…who lost billions. Peter Pan “failing to pay nearly as much attention to positions and positional risks on the exchange”, who now feels embarrassed especially about “substantially underestimating of the scale of the market crash could look like, and the speed of the market crash could look like”. So, not even that it won’t crash (maybe he has some competence after all!)… he was just “hoping” the crash won’t as big and as furious. Yes, I can imagine daily $4bn clients’ withdrawals would make anyone “a little nervous”. Also, the “suspiciously” transferred from the FTX $515M AFTER the bankruptcy filing would make anyone a little nervous, but at that point the Lost Boy of Crypto “was cut off the systems”.
Perhaps, he was distracted by his addiction — playing an intense League of Legends battle — while juggling the investors billions. Either way, there are some lessons to be learned from this mighty crash, and some common-sense investing rules to ALWAYS keep in mind. And they are not just cyber risks of investing in cryptocurrency. There are applicable to all tech, innovations investing. And we better remember those earthly rules if we want the web3, metaverse, or our settlement on the moon, to be successful and blissful.
Invest ONLY what you are prepared to lose. A non-brainer, right?
Diversify your portfolio — whether you’re investing in stocks, cryptocurrency or other assets, a large percentage of a single holding can be risky.
Do your due diligence — any individual company — be it a crypto exchange or more traditional business — can go bankrupt!
Invest for long term — especially, if you are an individual investor, remember the market sentiment drives the short term (often dramatic) fluctuations so only invest in sound business models with substance and long-term strategy. Also remember that you’re not going to win with the trading algos so, do your due diligence, invest long term, and keep your nerve…over a long, long term.
And if you still would like to put your money into crypto you also should:
Understand the risks associated with your crypto wallet. They too, could go out of business!
Back up your crypto transaction records, as not only you want to keep them for your tax records, but with the FTX collapse, there will be more regulations coming so be prepared.
So, let’s carry on exercising the common-sense and some basic rules rathe than turning the crypto into the boogieman. Also, let’s hope that following this mighty collapse, the regulators won’t go into a frenzy and the underlying tech won’t be regulated, but only its untested innovations.
In the meantime, keep an eye on the after-dinner circuit for the Peter Pan of Crypto. I suspect his “against the legal advice” PR stunt will get him a few US Senate appearances and crypto-advisory roles. All done from his cosy pad in Bahamas.