Originally aired on September 27, 2023
In this episode of the Bad Crypto podcast, hosts Joel Comm and Travis Wright interview Tom Wright, the co-founder of Project Brazen and creator of the new podcast “Crypto Kingpins”. The podcast delves into the rivalry between Sam Bankman-Fried (SBF) of FTX and Changpeng Zhao (CZ) of Binance, shedding light on the collapse of FTX and the upcoming trial of SBF. The interview explores the intricacies of the relationship between SBF and CZ, the allegations of fraud and misappropriation of customer funds, and the potential implications for the future of the crypto industry.
The Origins of the Rivalry
- SBF and CZ first met in 2019 when SBF invited CZ to a party in Singapore.
- Binance was an early investor in FTX, but tensions rose as SBF sought to overtake CZ and expand into the US market.
- The rivalry intensified as SBF began to badmouth CZ, accusing him of being a Chinese spy and involved in illegal activities.
The Collapse of FTX
- FTX’s downfall began when Coindesk leaked documents revealing the heavy reliance on FTT tokens, which were artificially propping up the value of the hedge fund.
- CZ realized the vulnerability of Alameda, SBF’s hedge fund, and decided to sell his FTT tokens, causing a significant blow to FTX.
- The collapse of FTX was further exacerbated by the broader bear market in the crypto industry.
The Trial of SBF
- SBF is facing seven felony charges, including misappropriation of customer funds and co-mingling funds.
- Witness testimonies from former colleagues who have pled guilty will likely strengthen the prosecution’s case.
- The trial will shed light on the regulatory challenges of the crypto industry and the reach of regulators in the US.
CZ’s Legal Challenges
- CZ is currently facing 13 charges from the SEC but has not been indicted by the Department of Justice.
- Binance has been under investigation for money laundering, although no criminal charges have been filed.
- The outcome of CZ’s legal challenges remains uncertain, but his political donations may play a role in the proceedings.
The Implications for the Crypto Industry
- The trial of SBF and the legal challenges facing CZ highlight the need for increased regulation and oversight in the crypto industry.
- The debate over the classification of tokens as securities and the protection of less sophisticated investors will be central to the legal proceedings.
- The outcome of the trial will impact the confidence of investors and the future regulation of cryptocurrencies.
Other Upcoming Projects by Project Brazen
- Project Brazen is working on various other podcasts and adaptations, including an art heist series called “The Professor” and a DEA origin story show.
- They are also developing podcasts like “Fat Leonard” and “Curtner and the King” into TV shows and films.
- Project Brazen aims to explore corruption and white-collar crime across different industries.