KUALA LUMPUR (Nov 23): The fraud at cryptocurrency exchange FTX is way worse and deeper than people realise with more than US$10 billion (RM45.77 billion) stolen, said American journalist Bradley Hope.
Writing in the weekly newsletter Whale Hunting on Tuesday (Nov 22), Hope said the public don't quite grasp the depths of the fraud because it's all a bit too murky and convoluted.
"For years, there were only a few of us who saw the 1Malaysia Development Bhd (1MDB) scandal for the epic crime that it eventually was understood to be — one that drew in Goldman Sachs bankers, lawyers from Shearman & Sterling, the auction house Christie's, and a never-ending parade of accountants, financial experts, party-planners and private investigators.
"What made 1MDB so pernicious was that the money stolen was debt, so the average Malaysian didn't feel the theft in real time. If someone steals your credit card debt, it feels very different than if they steal from your savings account, even though the debt is worse — it could affect your credit score. You owe interest; your assets could be at risk!" he said.
Hope said that with FTX, something similar was going on.
He said while many thousands of account holders had money from their savings accounts stolen, they are a demographic that is hard to picture or understand for the average reader or viewer.
“This wasn't money people were paying their rent with [for the most part, I'm sure]. It was mostly speculative betting.
“After all the scandals in the crypto world in recent years, it almost feels like it comes with the territory to get hacked or robbed,” he said.
Hope said it is still early days, but all evidence is pointing so far that Sam Bankman-Fried — the same one donating bundles to Democratic candidates, investing in media start-ups, and practising "effective altruism" — presided over one of the greatest heists of our time.
“This is about US$10 billion of other people's money that was stolen and will not be recovered in any serious way,” he said.