This article is transferred from author | Zhang Sheng
The so-called "decentralization" has finally become a joke. The biggest scam of mankind in the 21st century, the avalanche has entered the countdown!
One
The billionaires of the 90s are completely cool overnight!
On December 13, cryptocurrency exchange FTX founder Sam Bankman-Freed (SBF) was arrested in the Bahamas, and Freed was charged with a series of serious financial crimes including securities fraud, conspiracy to commit securities fraud, and money laundering.
Next, Freed will be extradited back to the United States, facing up to 115 years in prison, the 30-year-old virtual currency boss, who was worth as much as 26 billion US dollars (about 180 billion yuan), and has now announced that the rest of his life will be spent behind bars.
A month ago, on November 8, the currency circle just encountered the darkest scene in recent years, the world's largest virtual currency exchange FTX suddenly exploded, its virtual currency FTT waterfall plummeted by 80%, directly bringing the coin king Bitcoin to collapse by 20%, and a number of virtual coins fell even more ghosts crying wolf.
Unexpectedly, this was the beginning of hell, and then less than a week later, FTX boss Fried suddenly filed for bankruptcy in the United States, and a generation of cryptocurrency empires collapsed, and 32 billion US dollars (about 223 billion yuan) of wealth fell to zero overnight, and millions of investors behind them lost their blood.
But behind the whole incident, everywhere reveals strange and unusual, the richest Chinese and Binance boss Changpeng Zhao played a key role in it, FTX's bankruptcy application disclosed liabilities as high as $10 billion to $50 billion, may involve more than 1 million creditors, only a very small part of assets have been confirmed, more than 80% of the hole may not be filled.
With the arrest of the FTX boss, it has almost confirmed the largest bankruptcy case in the history of the currency circle, and it is also the biggest scam.
One second it is still an asset worth hundreds of billions, and the next second it becomes a fart, what a game and a dream!
Two
FTX's epic thunderstorm pushed almost the entire coin circle to the brink of a "nuclear explosion".
The whole incident is indispensable to the participation of Changpeng Zhao, the richest man in China, after all, FTX, as one of Binance's top competitors, can sit and profit if something happens.
On November 2, an analysis article on the industry website Coindesk suddenly published a major problem with the balance sheet of Alameda Research, the core company of the FTX boss, pointing out that the company has $14.6 billion in assets and $8 billion in liabilities, most of which are self-issued FTT coins.
What's more, FTX has more than $5.8 billion in FTT on its books, but only $4.36 billion in FTT in circulation.
As soon as the report comes out, discerning people can taste the taste at a glance, if the company's finances are not good, it must raise money to solve the problem, and the market liquidity can not eat such a huge amount of selling, so a faster crash than who runs will inevitably happen...
Just as a large number of investors rushed to sell, Zhao's richest man first came to the bottom of the well, saying: In view of the recent news, worried that FTT will repeat the collapse like Luna, decided to empty all the remaining FTT on the books, and has sold $584 million.
Even if FTX came forward to call out Zhao's richest man and said that he was willing to take over all of Binance's FTT at $22, it still couldn't prevent the crash that had occurred, and FTT plummeted all the way to $5.
On the day of FTX's full collapse, Zhao's richest man officially struck, tweeting that FTX came to me for help due to a "severe liquidity crunch", and we have signed a non-binding letter of intent for acquisition with it, which may be completed in the next few days.
But just a day later, Zhao's richest man repented and announced that he had abandoned the acquisition, which was equivalent to directly sentencing FTX to death.
Desperate FTX boss Fried had to file for bankruptcy and quickly fled to the island nation of the Bahamas, more than 2,000 kilometers away from the US mainland, but still could not escape the "long-arm jurisdiction" of the United States and was arrested.
Many insiders that subvert the perception of the cryptocurrency circle are gradually being made public:
1. Since the establishment of FTX 3 and a half years ago, the relevant US agencies have begun to conduct a secret investigation into its boss Fried.
Fried's arrest came when the SEC charged him with using FTX clients' money to make undisclosed venture capital, large real estate purchases, huge political donations, and "years-long fraud."
2, FTX secretly left a backdoor, can unlimited embezzlement of customer funds, FTX is Freed's personal ATM.
The SEC said that since mid-2020, FTX has made secret changes to the exchange software code, allowing Freed's hedge fund firm Alameda Research to have direct borrowing immunity, ignoring the value of the collateral it provides, and allowing it to use "unlimited amounts of lending."
The SEC has identified billions of dollars that FTX secretly lent to Alameda, not from the company's own reserves, but from FTX customers' deposits.
As soon as the news came out, a stone stirred up a thousand waves, and the entire currency circle fell into turmoil, and countless people cursed and closed their positions and left, shouting that they would never play again.
Behind the crash, investors based on the minimum "decentralized" and "immutable" belief in exchanges and virtual currencies were shattered.
Three
The crash of FTX is not the first and will not be the last.
As long as there are leeks that become rich overnight, there will never be a shortage of scythes for harvesting.
In the field of the currency circle, there has never been anything new, and exchanges that do not agree with each other and tamper with transaction data are all common things.
But the theft of virtual currency from the platform requires cross-chain transactions, and each execution of this transaction requires the consent of the "keeper", who is like a security guard who monitors the entire cross-chain transaction process, and no one can steal the cryptocurrency without the consent of the "gatekeeper".
Therefore, in addition to changing the code to leave a backdoor like FTX, the easiest way is to "bribe" the janitor through some means, get the clearance key, and steal the coins unknowingly.
Just in October this year, Binance, the exchange of Changpeng Zhao, the richest Chinese man, staged a shocking scene.
Zhao Changpeng posted that the platform has just been hacked, and within 2 hours, 2 million Binance Coin (BNB) was looted, losing $100 million worth of money and suspending investor deposits and withdrawals.
Soon, investors found that things were not simple, the loss was not only 100 million US dollars, the hackers had not had time to transfer the value of the currency, there were 430 million US dollars, plus other virtual currency assets that had been successful, the loss has exceeded 718 million US dollars (about 5.1 billion yuan), which is the largest on-chain attack in history.
Zhao's richest man insisted that he would continue to track down the identity of the hackers, but there has been no further news so far, and it may still be the same as countless previous cases.
1. The last cryptocurrency circle theft record happened on August 10, 2021, known as the world's leading "lightweight" heterogeneous chain cross-chain platform Poly Network, more than 610 million US dollars of virtual currency assets were transferred in less than 1 hour, triggering a global cryptocurrency circle and blockchain platform earthquake, thousands of miners held a headache and cried, and countless people returned to the pre-liberation overnight.
Just when people were in disarray, a miracle happened, after a series of communications, in less than 2 days, the hacker took the initiative to return all the assets, and said that he just "thought it was fun, not interested in money", and countless people's wealth was lost and regained.
But to this day, there are still many doubts in this case, why hackers are willing to give up billions of wealth in hand, whether there is a cruel truth behind it, it is still a mystery, good results are good, but this luck is by no means every time.
2. Japan's "Mentougou Incident" is the most notorious case in the history of the currency circle, and FTX is almost a copy of this case.
In February 2014, Mentougou, then the world's largest virtual currency exchange, abruptly suspended trading, claiming that 850,000 bitcoins had been stolen and declaring bankruptcy a few days later.
You know, 850,000 bitcoins accounted for 7% of the total circulation of the whole market at that time, plus about 20% of bitcoins were permanently lost, the actual proportion accounted for more than 10%, the event directly bombarded the entire market, bitcoin plummeted 90% in a week almost to zero, the rooftops of the world's major buildings, overcrowded for a while...
Six months later, the owner of Mentougou was arrested, and investigators found 250,000 bitcoins in an old wallet address, and its owner was the owner of Mentougou. In other words, this is a farce of self-theft.
Behind the FTX crash, there must be more unknown shady scenes, and now even Zhao's richest man may not have expected that the entire currency circle has been affected, and the Binance platform has been withdrawn by investors in a week with more than $3 billion, and it continues to flow out.
It shows that more and more players choose to recognize the game after seeing the reality, which is better than completely zeroing out after all being hacked.
Four
There is no buying and selling, so that there is no harm.
The tears that gamblers shed today are all saliva shed yesterday for the dream of becoming rich.
In China, we will never recognize Bitcoin, our legal tender, only a digital yuan issued by the central bank.
To put it bluntly, these so-called virtual currency exchanges are all anarchist carnivals, none of them are clean behind them, what "decentralization" is just a pretense to persuade gamblers to join it, how to change it behind it, knocking code in the background.
Never feel that you are smarter than others, you will not be the last stick to beat the drums, even if you can get away with it in the first 100 times, but the fall of the 101st time will make you doomed.