Let it burn, take responsibility & never look back

A summary of recent events surrounding FTX, conspiracies as to why it happened, and resources to start taking custody of your Bitcoin.

Monthly News Letter • November 2022

A lot of people are hurting right now because of what has happened with FTX. There are people all around the world that thought they had invested their hard-earned money and bought bitcoin on the FTX exchange. Bankruptcy filings have revealed that of the $1.4 billion dollars in bitcoin liabilities on the FTX books, there were zero bitcoin on the assets side. That means FTX sold $1.4 billion dollars worth of IOUs disguised as bitcoin. An unfortunate turn of events to say the least, but there is a lesson here; Bitcoin was designed to minimize trust, introducing trust ruins it. Trying to use bitcoin in a way where trust is involved introduces risk and defeats the purpose of certain architecture choices that enable permissionless censorship-resistant peer-to-peer transactions.

Despite the pain million of people are experiencing in this moment, if trust and permission have to be introduced to make a service work then the service is subtracting from Bitcoin’s strengths and putting users at risk. Any such service should burn to the ground, as painful as it may be for those who realize damages in the process; ultimately they made the choice to sacrifice custody and trust someone else with their bitcoin. If a user wants to gamble and trade with leverage and forfeit custody of their assets then they don’t need Bitcoin to do that. Scammers have sold the idea of Bitcoin to millions of users worldwide and delivered fraudulent iterations of the already broken legacy financial system. People who sign up with these services expose themselves to additional risk by providing KYC information.

The idea that on-ramps like FTX, Coinbase, or any other KYC service facilitates “mAsS aDoPtiOn” is moronic. KYC services functioning in heavily regulated arenas are not conducive to the permissionless and censorship-resistant peer-to-peer transactions that Bitcoin makes possible. So what’s the point of using Bitcoin if it’s just a centralized debit card or app dressed in orange? If you have had your paycheck garnished, been rejected access to basic financial services because you didn’t meet a financial institution’s moral standards, have been the victim of identity theft, or theft from hacks, or labeled some kind of extremist for speaking your mind and financially censored for it then you understand buzz words like “permissionless”, “censorship-resistant”, and “decentralized” actually have real-world meanings and significant implications when applied to money. The path to transacting freely is not paved with compliance. Reject legacy financial services operating behind a façade of Bitcoin’s tenants and move forward on a path of radical responsibility as these clown towns burn to the ground.

This article will cover what happened regarding FTX, a little conspiracy theory as to why, and also provide a few resources for those interested in self-custody.


FTX is a “Cryptocurrency Derivatives Exchange, built by traders, for traders.” according to the company website. But this exchange collapsed in a bad way; withdrawals ceased, bankruptcy filings, billions of dollars gone practically overnight. Details are still coming to the surface but here are some known high-level details. For clarity, FTX is based in the Bahamas and serves non-US residents; US residents can only trade with the FTX US affiliate. Both have overlapping management teams but separate capital structures. Both are now filing for bankruptcy:

Sam Bankman-Fried (SBF) started and owns two primary businesses (dozens of businesses actually); Alameda Research which is a trading firm, and FTX which is an exchange. The red flag here is running both a business that takes trades and a business that makes the market is a conflict of interests. A rough analogy would be like owning a farmer’s market where vendors pay you a small fee for each transaction they make selling their goods. To ensure the vendors can make lots of transactions, you spin up another company that goes to the farmer’s market and always buys the goods.

FTX Corporate Structure

This is how the FTX exchange was able to present itself as though the exchange had deep liquidity, Alameda was taking the other side of the trades. The problem is that the valuation of FTX was propped up by the appearance of deep liquidity, users could always count on executing trades on FTX, which was seen as valuable to venture capital firms looking to gain exposure to the cryptocurrency industry. Sophisticated marketing campaigns with celebrities like Tom Brady lured in droves of people looking to trade cryptocurrencies. More user’s meant more venture capital interest and it didn’t take long for FTX to reach a $32 billion dollar valuation in January 2022 with investments from companies like Soft Bank, Sequoia Capital, & The Ontario Teachers Pension Plan.

Because FTX was raising so much capital, Alameda could not stop taking trades – they had to continue taking bad trades and losing more and more money because if they stopped then all the liquidity on FTX would dry up. Eventually Alameda had taken so many bad trades and lost so much money that the massive hole in their balance sheet could no longer be ignored. Ian Allison of CoinDesk broke the story on November 2, 2022 with this article, which exposes that Alameda had $14.6 billion dollars in assets and $8 billion dollars in liabilities, much of which on both sides were just worthless tokens created by FTX.

This is where the story starts getting insane; the largest asset on Alameda’s books is $3.66 billion dollars worth of “unlocked FTT” and the third largest asset is $2.16 billion dollars worth of “FTT collateral”. Air-dropped FTT is being used as an asset and a liability on their books, $292 million dollars worth of “locked FTT” on the liabilities side along with an additional $7.4 billion dollars worth of loans.

FTT is the token FTX created out of thin air so traders could save on trading fees. FTT is the equivalent of a Chuck-E-Cheese gaming token. The basic idea is that traders on FTX can save a tiered percentage on trading fees based on how much FTT they hold and the duration it is held. FTX generated the FTT tokens and air-dropped them to Alameda, then FTX committed 30% of its revenue to buying the tokens back from Alameda. This created the appearance that FTT had some kind of value because the perception then became that the FTX exchange is doing very well and they are spending 30% of their revenue on FTT so that must be a smart money move. Alameda was using FTT to make loans and counting it as an over-valued asset when there was zero actual demand for it.

Four days after CoinDesk exposed Alameda’s balance sheet, CZ of Binance took to Twitter and in four short tweets triggered market-wide pandemonium by announcing that Binance would be selling all of their FTT:

For comedic relief, this is probably the best analogy of what occurred here:


There are so many questions in the wake of a scandal like this one and it is human nature to try and make sense out of chaos. Although it is impossible to confirm some of the information presented below, the purpose of including it is to provide some clues as to why this all happened and demonstrate the potential scale and reach of this scandal; even though most people will probably never know exactly what happened or get the closure they seek.

Details are now coming to light that indicate FTX used customer funds to plug the hole in Alameda’s balance sheet. Since then, all hell has broke loose and there is no telling what is true and what is false at this point, but news headlines are all over the place and there is a mix of fact and fiction, for example: Withdrawals from FTX have been frozen. Bitcoin markets crashed. The FTX exchange was hacked. The CEO took a private jet to Argentina. The CEO was arrested in the Bahamas. SBF steps down as CEO. And probably the most logical explanation for it all; FTX was an elaborate money laundering service where US financial aid to Ukraine was washed through FTX and sent back to democrats in the US through campaign donations. Perpetuate war, send tax dollars to aid war torn country, invest aid money in cryptocurrency, receive campaign donations. What could possibly go wrong?


There is another angle to all this that is starting to develop and it begs the question “Was FTX somehow involved as an elaborate sex trafficking ring cover too?”. Here is a bizarre timeline of events that kind of make this whole thing look like a crime ring was disrupted, dismantled, and all the evidence destroyed and books were cooked.

In what appears to be an FBI Intelligence Bulletin (although an official FBI source could not be found for this document), several symbols are identified as being used by pedophiles to signify their twisted sexual preferences.

Two of the symbols identified in this document and other places on the web have striking similarities to symbols used by both Alameda and SBF:

April 2020 – Joe Biden announces his candidacy for president. Obviously, there are close ties to the Clintons who are known to have close ties with Epstein who operated a high-profile child sex trafficking ring. There has also been damning evidence about Joe Biden and pedophilia brought to light from Hunter Biden’s leaked laptop and cell phone data as well as Ashley Biden’s diary.

June 2020 – The FTX US entity is formed. The timing of the formation of FTX US is suspect because of the close proximity to Joe Biden’s campaign announcement and the overwhelming quick success of FTX US and the amount of donations made to Joe Biden and the democratic party by FTX.

November 2020 – FTX US & Alameda donate a combined $11,460,000 dollars to the Joe Biden presidential campaign. Apparently, Linda Fried is SBF’s aunt and she is the head of Mind The Gap, she is a member of the WEF Global Agenda Council, and she is a scientist in epidemiology. Additionally, SBF as an individual donated $39.8 million dollars to the democratic party.

April 2022 – SBF, Bill Clinton, & Tony Blair headline the Nassau cryptocurrency conference.

October 28, 2022 – Nikolai Mushegian, an early Maker DAO developer, posted this cryptic tweet:

October 28, 2022 – Hours later, Nikolai’s body was found washed up on the beach near his Puerto Rico home.

November 2, 2022 – CoinDesk breaks the news of the Alameda balance sheet.

November 6, 2022 – CZ sparks the FTT dump.

November 11, 2022 – FTX & Alameda file for bankruptcy and SBF steps down as CEO.

Later on November 11, 2022 – FTX is hacked and the exchange is drained of roughly $600 million dollars worth of cryptocurrency. There are rumors at the time of writing that the servers have been wiped as well.

This could all be coincidence, this could all be true, a lot of it could be false or it could be a mix of both. The majority of people will probably never know for sure. One thing is for certain though, people who trusted FTX took an enormous risk and got burned. A sobering reminder of the importance in taking radical responsibility of your bitcoin and investing in the time it takes to learn a few tips and tricks about self-custody and minimizing trust. If your goals are maintain unrestricted access to your own bitcoin which you can then use to transact directly with other peers instantly anywhere in the world, then stay away from centralized exchanges.

Self-Custody Resources

The moral of the story is to stop trusting these parasitic corrupt institutions with your hard earned money. There is a way to transact without having to ask anyone for permission and without having to trust anyone not to steal your money and give it to psychotic politicians that are using your own money to devise ways to kill you. Here are a few great resources from different content creators who have generated tutorials, videos, and guides in pain-staking detail to help you get started with self-custody.

Twitter Accounts
• @BitcoinQ_A
• @Diverter_NoKYC
• @_k3tan
• @sethforprivacy
• @BTCsessions
• @SovrnBitcoiner
• @econoalchemist

Video Tutorials
• BTC Sessions YouTube Channel
• Samourai Wallet YouTube Channel
• Foundation Devices YouTube Channel
• BitcoinTV

• Bitcoin-Only.com
• Bitcoiner.Guide
• On a Path, Diverted
• Ministry of Nodes
• SovrnBitcoiner.com
• econoalchemist.com
• econoalchemist.github.io

Desktop Wallets
• Sparrow Wallet

Mobile Wallets
• Android – Samourai Wallet
• iPhone – Blue Wallet

Hardware Wallets
• Passport

Steel Backups
• Stainless Steel Washers
• Ronin Steel
• BitPlates
• CypherWheel
• Holdr Swiss

Alternative ways to acquire Bitcoin
• Mine Bitcoin at home
• Find a local Bitcoin ATM
• Use a decentralized exchange like Bisq
• Or RoboSats
• Find an Azteco vendor
• Consider working for Bitcoin in exchange for your goods or services