The FTX implosion has been called one of the biggest financial frauds in American history. Before Manhattan lawyers read out their case against Sam Bankman-Fried, the former CEO had been enjoying puff pieces in the New York Times and Forbes, among other publications.
I had an epiphany while watching a Senate hearing about the FTX scandal. John Ray, the current CEO of the company, has said that he has never seen such levels of incompetence and slackness in his entire business career. And this man helped unwind Enron. Remember Enron? So what do Sam Bankman-Fried and the FTX crypto exchange scandal have to do with Elon Musk? The answer is quite simple. But we need a preamble.
Elon Musk recently spent $44 billion to acquire Twitter. He borrowed most of the money from his Saudi / Emirati friends. And he said he was considering taking a loan from SBF himself. In a push to improve citizen journalism on the platform, Musk worked to drive up user activity by tweeting some terrible things.
Now what can we say about Elon Musk’s allure? He is alluring to the people who believe that fiat currency is nonsense. They believe that by day trading, you can flip coins, and from the modest investment of $10, become a millionaire at the flip of a switch. Of course, I believe it’s wonderful to aspire to do more than flip burgers and get paid a minimum wage. But once upon a time, this used to be a way to pay for college or technical school.
In my opinion, these people routinely smudge the line between reality and fiction. And they reject anyone who tries to instil in them in a sense of reality. For them, Elon Musk is not really a person. He is an aspirational totem, a person who skipped the blah blah stuff and got to the fun times. You know: thinking, analysis, conversations, feedback, resistance, and hardships.
Some of these people believe that the planet Mars, even though it barely has an atmosphere, is perfectly suited to be a habitat for humans, and we will go there on Starship. And even though the soil itself is so toxic that you can’t grow food in it, they’re ready to leave Earth.
These Musk fans don’t bother to pose difficult questions because they believe that asking difficult questions will slow things down. They don’t realise that questions drive innovation. Confusion encourages engineers to make things work better. In fact, their dream car, the Lamborghini, is designed and built by people with actual attention spans.
For them, the world of scientific enquiry is a place where boring people go to do boring things. Not only that, boring people don’t find evacuating their bowels in the morning to be a sterling achievement to be announced in a tweet.
And these were the reasons why a person like Bankman-Fried was allegedly able to run a company with zero oversight. And to loan himself, according to the prosecution’s case, billions of dollars of users’ money.
You see, people who believe in miracles think that checks and balances are trying to stop them from becoming “independently wealthy”. What they believe, or what they are told to believe, doesn’t have to be true, rational or attainable, as long as it sounds good and feels good.
“I will give away $2 billion,” said SBF. And after looking at some data, he must have decided something like, “I will wear a stretched out T-shirt, unwashed shorts and some janky socks. I will try to look like my dude bro customers.”
After the money was lost, SBF told a journalist that looking janky was all branding. And it worked because his supporters believed it. They were not entertaining any due diligence. I believe that if you were to scroll through their Twitter timelines, you would see that people trying warn them about what was going on were told to shut the hell up.
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