The FTX story just keeps getting crazier 😳; Could Klarna be profitable in 2023? 🤔; Plaid's layoffs and the future of FinTech 👀

FinTech is Eating the World, 7 December

Hey Everyone,

And happy Wednesday! This is undoubtedly the best issue this week so far. Today we are looking at the FTX story that just keeps getting crazier (lots to unpack + lots of bonus reads), question whether Klarna can be profitable in 2023 (unlocking their latest numbers & why they should steal Affirm’s strategy), and Plaid's layoffs which make us question the future of FinTech (hint: it’s not rainbows & unicorns). Let’s jump straight into the mesmerizing stuff:

The FTX story just keeps getting crazier 😳

Deeper down the rabbit hole 🕳 I said this earlier and I will repeat it again - the FTX story just never stops giving. It’s a horror movie, a comedy, and a thriller at the same time. Yet, it’s too important to be left behind, so let’s take a look at some more astonishing things that were discovered and revealed as of late.

More on this 👉 Here’s what you need to know:

• Let’s talk about the interviews first. The one with the New York Times was pretty painful to watch. Sam Bankman-Fried barely gave a straight answer or even looked at the camera. In essence, he was just digging himself a deeper hole 🤷‍♂️

  This sums it up pretty nicely:

  Dave Portnoy @stoolpresidente

  For anybody who didn’t watch the @nytimes interview with @SBF_FTX I think this clip sums it up. (The crowd is dead ass real. I just put in the music.)

while this one is just… 🤯🤯🤯

Danger Raven @TheRealRorbo

SBF reacting to the statement that: funds were ‘suspiciously transferred’ from FTX after bankruptcy… https://t.co/idoFz1tIwt

And a cherry on top is the round of applause after it’s over…🍒 Seems like a simulation to me 🤷‍♂️

Clay Travis @ClayTravis

The @nytimes audience gave SBF a round of applause for doing an interview about committing one of the largest frauds in US history. This is wild:

After this, SBF talked with Good Morning America. It’s worth listening to as well as there are plenty of gems there 💎

Autism Capital 🧩 @AutismCapital

The full GMA SBF interview. @GStephanopoulos did a good job pressing Sam. Sam did himself zero favors with this. “I wasn’t even trying to manage risk.” Sam feels the need to speak and is going against all legal counsel — a huge mistake born from hubris.

Finally, if you want to go really deep, listen to the one where Frank Chaparro talks to SBF (it’s pure gold!):

The Scoop @TheScoopPod

"What money did you use to purchase those shares in Robinhood?" "The first thing I'll say is dollar bills are generally fungible..." Listen to the full @fintechfrank x @SBF_FTX episode now: theblock.co/post/192005/2-…

Now, about other things…

• FTX's interconnection with Alameda was solidified further as reports suggest that the tainted cryptocurrency exchange used its sister company’s banking accounts to process transactions for the exchange. Fraud 101 👏

• SBF told Tiffany Fong that though he made sizable donations to Democrats, he also made “dark” donations to Republicans that aren't as publicly known. Bribes 👉 Donations 😎

• In relation to that, FTX donated $1M to the Super-PAC linked to Mitch McConnell, The Senate Leadership Fund, on October 27. Just days before FTX declared bankruptcy.

• More lies - SBF said he couldn't hack into FTX because he didn't know how to code while in September 2019, the same SBF said on The New Trust Economy that the goal of the code is used to be functional versus the code is the goal. My goal is to write the most beautiful code I can 🤡 A brilliant illustration that he’s a pathological liar.

• Sam Bankman-Fried said he will testify before the House Financial Services Committee after he’s finished “learning and reviewing” the events that led to the implosion of FTX. Seriously? 😳

• SBF of FTX has hired Mark Cohen as his attorney, as per Reuters. Cohen recently defended Ghislaine Maxwell in her sex trafficking trial and defended El Chapo prior to that. This tells you all you need to know about this man. :)

• A cheery on top is this - Sam Bankman-Fried wanted to pay Taylor Swift more than $100M for FTX to sponsor her tour. He also wanted Taylor to endorse FTX on social media (she said no). Seems Taylor Swift did better due diligence on FTX than all of the top VC firms. :))

• Among all the mess, Binance saw a 30% surge in trading activity following the FTX implosion, according to Bloomberg. Binance really wants to be your crypto bank.

• Additionally, Goldman Sachs GS 0.00%↑, plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange hit valuations and dampened investor interest, as per Reuters. As I said last week, now is a brilliant time for banks to increase their acquisition game.

• Finally, the $5.4B Alameda VC portfolio was revealed by the Financial Times. Here it is (only the first page):

  

  The largest investments are: 1) Genesis Digital Assets 2) Anthropic 3) Digital Assets DA AG 4) K5 5) IEX. It also includes Sequoia, SkyBridge, SpaceX, and Boring Company, in addition to game studios, betting platforms, online banks, publishers, a fertility clinic, a military drone maker, and a vertical farming company. This is just nuts 🥜

✈️ THE TAKEAWAY

Trying to make sense of it all… 🤯 Continuing on the last point, in order to understand how big of a Ponzi Scheme FTX was, think of it as follows: Sequoia invested in FTX so FTX could lend money to Alameda so Alameda could invest in Voyager so Voyager could lend money to FTX so FTX could invest in Solana Foundation so Solana Foundation could invest in FTX, and so on and so forth… You just can’t make this up… And the most worrying thing about this mess is that the trust and integrity (as much as it had such a thing) of the crypto industry has been severely comprised.

In case you missed it: The FTX story is getting wilder and wilder 🤯

FTX is much worse than anyone imagined 🤯🤯🤯

The aftermath of the FTX collapse could be bigger than the earthquake 🌋

Contagion of contagion, or how Genesis could cause Crypto Armageddon 😳

WTF: Binance walks away from FTX takeover 😳🥶