Dear Investor,

The FTX debacle is so much bigger than FTX and Sam Bankman-Fried. Sure, FTX is one of the biggest political, regulatory and financial breakdowns of this Cycle.

But the bigger story is hiding right under our noses.

  • Incompetence here? Of course.
  • Corruption? Fraud? Massive conflicts of interest? Most definitely.

This whole thing is rotten to its core.

Set aside that Sam Bankman-Fried was the second largest donor to the Democratic party (donating $36 million). Or that FTX’s co-CEO of Digital Markets was the 14th largest Republican party donor ($19 million). Forget for a second that CFTC Commissioner Caroline Pham recently deleted a social media photo of her posing with SBF. Erase from your memory banks the pictures of SBF with Congresswoman Maxine Waters, or SBF sharing the stage with Bill Clinton.

Consider this. Fraud exposer and veteran shortseller Marc Cohodes handed the entire SBF/FTX fraud story to Bloomberg Crypto in London in July. They passed on it. Let that sink it. Their reason? “They thought it was too hard, too complicated, and might interfere with gaining access to SBF going forward,” Cohodes says.


This entire saga is recounted in our October interview with Cohodes well before FTX blew up a month later. If you haven’t seen that interview yet, watch it or watch the brief HedgeyeTV highlights featured on Tucker Carlson’s Thursday evening Fox News broadcast (below).

Since there’s so much to unpack in the FTX saga, this week we brought Cohodes back for another conversation with CEO Keith McCullough. Cohodes dropped this truth bomb…

"FTX is not a crypto scam. It is a massive money laundering, Ponzi scheme fraud with a crypto wrapper. This has nothing to do with crypto. This shit needs to stop."

We agree. This shit needs to stop.

When the regulators fail to do their duty (hi, Gary) and there are billions of dollars at stake, fraud and corruption fill the void. On that front, this has been a colossal failure of leadership.

In fact, Cohodes exposed the FTX and SBF scam on HedgeyeTV, just 7 days after the SEC fined Kim Kardashian $1.26 million for unlawfully touting crypto assets. Kim F’ing Kardashian.

Meanwhile, for months, Cohodes had the goods on FTX (the details of which were all hiding in plain sight) and no one did a thing about it.

There were other pumpers who accepted ad dollars and pumped-up FTX and crypto mania: Raoul “Rug” Pal, Kevin “Mr. Terrible” O’Leary, Anthony “Pump” Pompliano, Anthony Scaramucci (vomit) and Jim “Chrome Dome” Cramer. Disgusting behavior all around.

If you’re on the sidelines looking in you’re probably wondering: Why is all this nonsense happening? We have a theory on that. Because when times are good and the money is flowing super F’ing easy this s#it happens. "Dance while everyone else is dancing." Worry about the consequences later.

A LOT of people who should have known better lost their scruples. All these scammers snorted easy money, crypto cocaine, turned a blind eye and gorged themselves on the money SBF was handing out.

That all said, this is the Fourth Turning. We’re on the cusp of a generational change in America that will reshape political, societal and economic life. This will take time. And in the meantime, expect confusion and crisis to reign supreme in America. (Fourth Turning author Neil Howe and former Fed advisor Danielle DiMartino Booth discussed FTX [and much more] on yet another HedgeyeTV webcast this week. Watch here.)

Nearer term, this is Quad 4 in action. The U.S. economy is slowing, a profit recession is coming and, as Warren Buffett said, “only when the tide goes out do you discover who’s been swimming naked.”

Sadly, there are a lot of morally bankrupt people in America. We’re saddened and disgusted by the state of Wall Street, our politicians, regulators and the mainstream media. There’s blame to spread all around.

Finally, we have a message for anyone who aided and abetted the FTX debacle. A lot of people trusted you and lost everything. When the dust settles, we hope you get what you deserve.