This video is not brought to you by FTX Who's a Founder just lost a 94 of his net worth in the crazy Crypto Wipeout happening today. It's maddening. Instead, this video is brought to you by the brand new course that I am releasing on Black Friday that's on pre-sale linked down below. Use that coupon code and consider joining the new program. Elite Hustlers University Also, check out the other programs on building your wealth. The Crypto Market is in utter collapse mode with big Time this recording down over 10 10 percent. Revisiting briefly the lows we have not seen in Bitcoin since a June 20th and 19th. So where Bitcoin traded around 17 596 dollars today thanks to liquidations a falling to 17 147 rebounding to about 18.3 thousand dollars. Folks All of this because of the collapse, the unexpected collapse of FTX and now folks are wondering if there's only one Jerome Powell style figure left in crypto? How is something that's supposed to be decentralized going to survive if that one person turns out to be Shady a scam or also bankrupt? Well in this video, I'm going to catch you up with absolutely everything that happened today in the crypto market. Then we'll also look at Coinbase CEOs Response wants to what's going on in the market and we'll analyze who's this remaining person whom without crypto might collapse Now, don't get me wrong, I Want to be crystal clear I'm a big fan of blockchain technology I Think the underlying technology will at some point in the future be as common in our daily lives as water and electricity. In other words, I Think blockchain will become a utility, a standardized utility of which there will be a value, and that value could be denoted in the value of Bitcoin or Ethereum, depending on which blockchain ultimately ends up being used. If it ends up being one of those at all, we'll see. Who knows, maybe every corporation themselves will have their own blockchain, and they'll intermingle with others. That's all speculation. The point is, there's unfortunately a difference between blockchain's fundamental value and markets and markets react to liquidity problems. And when greedy institutional investors try to create leveraged products and then some kind kind of underlying Panic happens, you get liquidations. and liquidations lead to force selling of cryptocurrencies that are unfortunately caught in the mix. So what happened today? Well, the first thing that happened is we found out that FTX is basically going basically going bankrupt and their FTX token is now down over 70 percent on the day. the FTX token is a ticker symbol Ftt. When you go to coin at market cap, you can see it's down 75.3 at the time of this recording, down to five dollars and 46 cents. The plummet took it from about 22 this morning. uh, all the way down to 5.46 Do also keep in mind though this trend or the trend for ftt hasn't been great at the beginning of the year. We were sitting around 45, ran up to about 50 bucks by March and trended down throughout the summer. When Bitcoin hit its lows. Ftt was trading for about twenty three dollars actually slightly more more than where it was trading this morning when we were at about twenty two dollars. And that's because there were a lot of rumors circulating that some pain was coming to FTX And even though Sam Bankman Freed said the rumors about problems at FTX are fake news, unfortunately, FTX needed a bailout and that's where this person CZ comes in. That's to catch you up to speed where CZ comes out and says this afternoon FTX asked for our help. There is a significant liquidity crunch to protect users. We signed a non-buying letter of intent intending to fully acquire Ftx.com and helping cover the liquidity crunch. We will be conducting a full due diligence in the coming days. Things to know about that first: FTX is the international branch. However, that International fear that's happening at FTX which is going to lead more International FTX users to demand withdrawals could end up spreading to the FTX Us version even though technically they're separate I think a lot of customers at the FTX Us version are going to think oh, I better get my money out. And unfortunately, when a lot of people get fearful and take their money out, what ends up happening? Well, you end up creating exactly what companies try to avoid a bank run essentially. But because there's no audit of these companies, there's no Federal Reserve. FDIC SEC Uh, you know, um, Finra. None of that actually auditing these companies. We don't know if they have sufficient liquidity to actually cover the withdrawals that are being demanded of them. Some rumors suggest that FTX is seeing withdrawal requests of anywhere between one to three billion dollars in just the last week. and unless they have all that cash available. Unfortunately, they've got to go figure out where to get cash from somewhere else. All of this stress is starting to impact other companies as well. Coinbase was reporting outages this morning and now the CEO of Coinbase has the following to say: First off, I have a lot of sympathy for everyone involved in the current situation With FTX It's stressful. Anytime there is a potential for customer loss. Yeah, customer loss is the most important thing you want to avoid because that's what leads to bankruptcy. Remember when Voyager Digital started having liquidity issues and they started limiting withdrawals, that was a big red flag to get your money out of Voyager because it ended up leading to their complete collapse and bankruptcy. The only thing people were able to even have a claim of or on in the bankruptcy proceedings for Voyager Digital was cash. And I'm not talking about stable coins. uh, like a Usdc. I'm talking about straight up US dollars. So if you didn't move your coins to cash at these centralized exchanges, your claims in bankruptcy court were basically eradicated. That's because there is no lender of Last Resort to bail out these sort of companies like the Federal Reserve In fact, here's an interview of me talking about this and telling my audience about it because I posted this video obviously on my channel when I spoke with the founder and CEO of Block Fi, a company that was also nearly destroyed by the Three Arrows Capital collapse which led to the collapse of Voyager and subsequently nearly blocked Phi And what's crazy about all this is, Block 5 was almost bailed out by FTX but now FTX is going bankrupt Anyway, look at this throwback clip so you know I Think our our scale and capitalization and experience and risk management is something that really, uh, stands apart from other uh folks, uh that operate in this market. Nice. So yeah, I mean that's interesting because uh, when the market crashed there and in March there's no fed coming in to bail out the crypto market, right? There's no lender of Last Resort and it sounds like that was almost you guys. So you guys were like, go ahead yeah. I mean look, we're the we're the largest. Um, and and we, you know, we think of ourselves as uh, certainly a company that's interested in growing more client relationships and offering more products to our clients and being successful from a uh, from a capitalistic perspective. Just absolutely crazy looking back to this, but what else did the CEO of Coinbase have to tell us? Let's take a look at this: I Do know that link down below is a brand new course by the way that Launches on Black Friday we're doing the biggest sale we've ever had on the courses including uh, Now 60 off coupon code and that Elite Hustlers course is absolutely amazing. It's the lowest price that we have and it is the lowest price course that we have. and it is a new product for increasing your income. All about hustling, building a business from scratch, building a side hustle, increasing your income as an employee. It's a phenomenal course. When we use the black screen to teach all of it, it is so amazing. you're going to love the content in it. So check that out linked down below. So what else did the CEO of Coinbase have to say? Well, Brian Armstrong says coinbase has no material exposure to FTX or Ftt and no exposure to Alameda. So FTX is obviously the company, FDT is the FTX token and Alameda is the sort of holding company that Mr Sam Bankman Freed owns Uh, which is this guy who is basically mission accomplished achieved giving away all of his a fortune and is now leading to memes circulating that look like this. Alameda Research CZ Walking in to bail out FTX and the Elon Musk sink so you could let that sink in. Oh punny. So Mr Brian Armstrong goes on to say that I Think it's important to reinforce what differentiates coinbase in: A Moment Like This This event appears to be the result of risky business practices including conflicts of interest between deeply intertwined entities and misuse of customer funds. Lending user: Assets Now This is really interesting. This is a CEO who suggests it is a misuse of customer funds to potentially be lending user assets. But wait a minute. Coinbase applied to allow lending, but they got shut down by the SEC So I feel like this is kind of kicking somebody for something you would have been doing anyway. and now you're alluding to this being risky I Mean obviously risk management was an issue, Otherwise, they wouldn't be potentially going bankrupt here. But uh, kind of kind of interesting. Do keep in mind this sort of lending issue, all having to do with stable coins. or a lot of it having to do with stable coins. It's an issue that we've talked about in this channel as well. In fact, back in March of 2021, I Explained how this whole lending stuff just collapses. In fact, here's the clip. We think, hey, it's pegged to the dollar. It's pegged to the dollar. one. uh, one to one. And if it's back to the dollar, one to one. It's kind of like having cash. except it's kind of like a high yield savings account. But that's the problem. It's not. It's a loan. If they made you sign a document saying you agree to lend this and you could lose all of it, people probably would be less inclined to do this, but that's all in the fine print. They just say, hey, sign up and earn interest on your cryptocurrency. It sounds so wonderful. They don't make it clear that this is actually a loan. Now that doesn't become a problem because right now, your Gusd doesn't fluctuate in value because it's packed to the dollar and the markets are working. Normally prices are going up. You've got nothing to worry about because as prices go up there, there usually isn't stress in the markets, right? So when does this become a problem? Well, let's say Sally says you know what. I'm going to get some margin I'm going to buy Bitcoin for a hundred dollars I'm gonna get 25 of margin from Voyager here and I'm gonna have 125 dollars invested in Bitcoin Now let's say Bitcoin goes from 55k to 5K. That's a big drop. It's about 91, right? Well, this is going to go down 90 to about 12.50 What happens now? Well now Sally gets wiped out Sally got destroyed and this could be a flash crash. This could be a day. Sally instantly gets destroyed because you have Smart contracts that instantly take your money away. Give it to Voyager The problem is Voyager is left with an asset that's worth a whole lot less than what they thought it would ever be worth. So now they only have 12.50 They just lost money when a company or an Institutional Investor loses money. And this happens at scale amongst hundreds or thousands of different client accounts. Because we have no idea how many people are on margin. We don't get that kind of transparency from the system. We don't know. We don't know how often this Gusd is Lent out over and over again. We have no idea. Let's say Boyager goes bankrupt. Okay, Voyager goes bankrupt because they're like wow, we just had all these margin losses. Well, Cryptify is probably going to have some issues as well, but I'll tell you the first thing that's going to happen. Kevin and Michael are going to be like oh crap, please let me have my Gusd back and all of a sudden we're going to see a lot of people instantly demand redemptions. They're gonna want yo give me turn my Gusd into dollars. Right now the Market's crashing. I'm freaking out Okay now and I know some of you are gonna think Kevin Come on. the same stuff happens in fractional. Reserve Banking Hold that thought. Okay, I'm gonna put a little note down here. Fractional Reserve Banking We're going to talk about fractional Reserve Banking Hold that thought because there's a massive difference. Quite a few actual massive differences here. So what happens Now Now you've got two people who think they have a hundred dollars of Gusd in the bank. They're like I want to redeem. Okay, well, what happens Gemini and crypto if I say hey, Look, we're in a crisis right now. No redemptions. Literally no redemptions. They could do that. It's happened before. Look at Bitfinex Bitfinex a Chinese company uses Tether as their stable coin and in October of 2018, they stopped allowing deposits And so nobody was able to convert uh, US dollars or Chinese dollars or whatever Euros into tether and the one-to-one peg of the tether collapsed. It went down as low as 85 cents to one dollar and there was no market crash. Bitcoin was stable around six thousand dollars when that happened. No, no crash, no collapse, and tether loses 15. Boom like that. But wait a minute, it's pegged to the dollar. Okay, you think Kevin and Michael are going to be able to go to the Fed and go yo I demand my USD No Fed's gonna laugh you. They're gonna laugh you out of the bank. Get out of here. We we did not bestow our trust on the Gusd you tried to inherit Trust of the USD you tried to inherit the Sovereign banking, the uh, the backing of the Full Faith and Credit of the United States via a stable coin. but it doesn't work that way. Quick example: I have let's say a thousand of these erasers and I say hey, I will always pay you one dollar for this eraser right here because the value of this eraser is pegged to the dollar. Cool. Who are you trusting the US government or me trusting me? If I go bankrupt worthless. Same could happen here. You'll get institutional bankruptcies. the value of those underlying coins which are corporate controlled. these. This is not government control. They're corporate controlled. Usdc is a Consortium They're private companies that control Usdc. Gemini private company that controls the Gemini coin. So back to the CEO of Coinbase. Again, Coinbase has always strived to be the most trusted player in the space and we don't engage in this type of risky activity. Yeah, again, because you can't You wanted to, but you can't. We don't do anything with our customers funds unless directed to do so by the customer. We hold all assets dollar for dollar, and users can withdraw their money at any time. and that's fine. That may be true, but that doesn't mean that disruptions and dislocations in other parts of the crypto. Market couldn't destroy the valuation of certain currencies that you may be having at Coinbase, right? We are Incorporated in the US. This is true. they're publicly listed in the US and they say that's because as we believe, transparency and Trust are important so every investor and customer can see our publicly or public audited financials which show how we hold customer funds. We never issued an exchange token I Think it's worth just intercepting here and saying you know, just because you're public doesn't mean you're not shady. You're going to go bankrupt In fact. Um, here's me with the CEO of Voyager Digital, which was a publicly listed company and is now bankrupt. Here's the clip. Listen to what they say. Compared to what coinbase just said, the risk parameters we've set as a public company, and why, it's easy to see it in our disclosures and our financials. You know we just put out our December financials got posted on Canadian Cedar uh, the other day on Monday as did on the OTC market so people can see all the data. What happens when the last man standing of the crypto World goes bankrupt? Because remember, Jerome Powell of the Federal Reserve can print as much money as he needs to to support functioning markets and liquidity for users. But when Sam Bankman Freed runs out of money, there aren't a lot of Jay Pals left and Sam Bankman Freed was deemed to be a lender of Last Resort but he just ran out of money today. It's a historic moment in fact. I Want you to see this clip from months ago where I made a similar analogy saying: one day Sam Bankman Freed could run out of money. Here it is, and then we'll talk about this other guy. Until then, bailouts from companies like FTX is founder, Sam Banquin Freed or Binance can keep Crypto afloat. They're basically acting like the Federal Reserve which remember when I said you're going to wish you had a J-pal who's referred to as the lender of Last Resort Well, guess what CNBC is now calling the founder of FTX Yup, the lender of Last Resort Just like J-pow but even Sam Bankman Free doesn't have a money printer like J-pal so that means his support is more limited than what J-pal can do. Sam Bankman Freed might be able to help prop the crypto economy up around 19 000 Bitcoin as a strong support, but what happens when his support stops? What happens when true Panic spreads because there's no Sam Bankman Freed to make sure Voyager Digital can allow people to at least remove some of their money from the platform TBD So what do we know about Binance and CZ and is it possible that CZ is a shady character? Well take a look at this piece and boy, it is a piece. Can crypto's richest man stand the cold? What I've done is I've gone through this piece I Went through this when it was first published and I've just recently gone through it again. This was published just a couple days after crypto. Well, Bitcoin last hit its bottom. Cz's full name is right here Chiang Peng Zao And what I'd like to show you are some of the highlights from this: Take a look at this first. They suggest that Binance remains the biggest company in crypto by a mile, processing more transactions than all of the next four exchanges combined. That's not necessarily a good thing though, because Binance is a company that's the target of Investigations by almost every Financial regulator that exists, the Department of Justice Commodity Future and Trading Commission, the IRS, the SEC, you name it. They're all looking in to Binance and there's a reason for that Because see: Binance is technically owned by Binance Holdings which is a Cayman Islands firm, which is usually where companies go to kind of skirt disclosure and lawsuits. In fact, we technically don't really know who owns Binance Holdings or what their motivations are. Now we know that CZ is the owner of Binance Capital Management which is registered in the British Virgin Islands. Now the problem with that is it makes suing these companies really hard when people sign up for an account and then run into problems. For example, Binance at one point Shield Tarot Luna without giving warnings around their promotion of Terra Luna. This led to a lot of lawsuits, but not just this. Other things have led to lawsuits as well. Unfortunately, a lot of people as we see here just give up suing them because they can't figure out which entity to Sue Or it's just so confusing to navigate how to actually pin down which person to serve because the ownership is so Arcane in these either either the Cayman Islands or the British Virgin Islands that people are just straight up confused. Like the lawyers are even confused and it's their job to figure out who owns these companies. but you literally have Bloomberg telling you. Finance.com which is based in who knows where and owned by God knows whom. They also say that when Traders sign up for a Binance account, they agree to do business with quote parties that run Binance, which is basically a fancy way of saying we don't really know who you're doing business with. Uh, so some people say CZ just has all the control that he's the one guy in charge. Which is really interesting because he refuses to show up in the United States because he's fearful of getting arrested in the U.S Even though he says he doesn't think he's gonna get arrested, there has been an acknowledgment that he might get arrested if he comes to the U.S and so when he speaks at conferences in the United States, he does so via Zoom CZ himself is based out of Dubai, which Dubai is one of those places that people tend to go when they're trying to stay away from regulation in other countries and potentially avoid paying taxes on the money they're making. Now we know that Binance got kicked town of the United Kingdom. On top of that, Binance sued Forbes when Forbes did this hole expose on how Binance was setting up bait and switch strategies for their customers and then Binance eventually dropped that lawsuit. You would think if you know Forbes messed up here, they wouldn't drop the lawsuit, just listened to some of the shadiness. There were other signs that Zaos pivot to conventionality. It might not be entirely urgent. The day of the interview, Zao said a reporter could visit the new Dubai office, but after a flurry of emails, calls and texts during which assistance and PR Consultants made an array of excuses, a Binance representative said that in fact the office was closed because of a surge in Covid-19 cases. That was odd Zao hadn't made no reference to the disease during the interview, nor had anyone else at the company. The previous day, Binance had arranged a separate interview with the company's head of Middle Eastern Operations, who showed up unmasked at a crowded hotel lobby where he appeared to be conducting in-person meetings. Really? So, the head of the Middle Eastern Operations is showing up in a Lobby to do interviews in a Lobby and then 10 days later, the head of Publicity offered Businessweek a virtual tour a virtual tour led by a head of the HR team. But before the tour, Binance explained that the offices weren't exactly bustling, but gave the impression that there was at least some activity in them saying quote. So we have offices, but people only go to the offices a couple days a week. Okay, this is literally like the last company standing. Uh of of like huge uh means in the crypto space because we know obviously Coinbase still exists and like Crypto.com and stuff. but this is the big boy and they're like the last J-pow Remember FTX was the first shape out. this is like the next in line and after that, that's it. J Like the real Jpow ain't coming in to bail out Crypto? Uh, then of course. uh, you know this. This particular article here ends with this uh reference to Binance tweeting saying they had 2 000 open positions and they were hiring That they said ended up being just a joke and they didn't actually mean they were hiring. You've got your scene over from Ark whom I've had on the channel as well and people are taking massive risks saying it's been a crazy day at the office. FTX is basically insolvement insolvent BTC testing new lows uh Sam Bankman Freed's Investment Company toast Binance planning to acquire FTX uh, the FTX token down 80 potentially headed to zero CZ Announcing this proof of Reserve Model this by the way I think is just a kind of a a little weird Okay So look at this: CZ This is the guy who we just got a profile on from Bloomberg is now saying that all crypto exchanges should do basically a proof of Reserve System A Merkel's tree is just the way blockchain and hashing works. You don't really have to know what that means, but what's really wild about this is he's making this argument that oh, crypto exchanges should not operate like Banks and run on fractional reserves. That way you have all the money in case anybody wants to withdraw it. But the problem with this is he's just suggesting this as an idea and it's happening at a time of a massive liquid. Did he crunch? So sure. This is a great idea and it makes him seem like a genius because it's like, yeah, that's right, screw the banks. What he's really doing is manipulating the world and thinking, yeah, we're all still United FDX Screwed up. Okay, they suck, no problem. but the mission of crypto lives on. Yeah, let's do this. but they're not doing that. And not only are they not doing that, they're probably unlikely to ever do that because transparency is the last thing we get from CZ. If anything, everything is pretty arcane and murky with CZ. On top of that, he tweeted this stay Seifu hashtag which is a reference to their Secure Asset Fund for users and on their Binance website. They say that the Secure Asset Fund was valued at one billion dollars based on pricing in January on January 29th, 2022. So they're trying to say like, hey, we have this emergency Insurance Fund set up that was established in 2018 to protect users funds and look, we've got a billion dollars over here. Well no you don't because unfortunately you park this stuff into things like the Binance token and the Binance token. that's down like seven percent today. Uh yeah, seven point three percent Today, the binance tokens falling. So basically the more that falls, the less money you actually have in the Insurance Fund So this is kind of like saying hey, we have an insurance fund so that basically if crypto tanks, you could get your money out. But wait a minute, that Insurance Fund is funded by Binance coin. and if Binance coin tanks, then there's less insurance to protect people. In case the Binance coin tanks, there's a complete disaster. Look, it's like investing. It's almost like a tether on steroids over here. Uh, like whatever. I Think you get the point. These are the actual wallets which don't actually show a billion dollars anymore. What they show now is about 331 million dollars. Plus the second account shows. Let's see here. I Want to say it was about 150 million dollars? Yeah, here it is. This is the second account. This shows about 144 million, uh dollars available. So really, you've got maybe 480 million dollars in this. Insurance Fund That's less than half of what you said it was in January and what you're kind of advertising it as so even Seifu isn't even really safe. So long and short of it. Bottom line: Naya Keys Not your crypto Number one, Number two. When these big companies go bust, not only does it increase volatility, but it kills a lot of trust in the entire system. Blockchain technology Will Survive But the valuation of crypto assets with all this insane speculation and nonsense will come into a heavy question. especially if Binance pulls the plug and doesn't buy. FTX If they don't buy FTX FTX Could end up going bankrupt. If FTX goes bankrupt, we could see Mass Liquidations in crypto as people. Well, basically as FTX goes through bankruptcy and then what, that could actually hurt finance. And if Binance goes down GG Game over. Good game, well played. Wish you all the best. Check out the programs on building your wealth. Link down below and we'll see in the next one.