RUSH TRANSCRIPT That was ░░░░░░░░ late 2021 and then ░░░░░░░░ few months later maybe ░░░░░░░░ year later they announced ░░░░░░░░ a formercftc commissioner was ░░░░░░░░ to join their board ░░░░░░░░ Collins is cofounder of ░░░░░░░░ and he joins us ░░░░░░░░ still a lot we ░░░░░░░░ t know Bankman bankman ░░░░░░░░ Bankman Fried talking about ░░░░░░░░ transparency transparency what is ░░░░░░░░ take on the FTC ░░░░░░░░ and Sam Bankman Fried ░░░░░░░░ It s a crippling ░░░░░░░░ to the crypto currency ░░░░░░░░ Sam bangman fried teed ░░░░░░░░ up as a champion ░░░░░░░░ regulation in the space ░░░░░░░░ him to implode like ░░░░░░░░ it s really a ░░░░░░░░ blow And as you ░░░░░░░░ see from the markets ░░░░░░░░ s having a great ░░░░░░░░ And it s reducing ░░░░░░░░ I think that s ░░░░░░░░ fair statement Reducing confidence ░░░░░░░░ the entire ecosystem including ░░░░░░░░ the stable coin that ░░░░░░░░ co founded what s ░░░░░░░░ response what would you ░░░░░░░░ to Sam Bankman Fried ░░░░░░░░ you were in the ░░░░░░░░ room with him right ░░░░░░░░ I think everyone wants ░░░░░░░░ know how he could ░░░░░░░░ let it get this ░░░░░░░░ out of hand Some ░░░░░░░░ the but I want ░░░░░░░░ to know and realize ░░░░░░░░ s still a lot ░░░░░░░░ speculation We re getting ░░░░░░░░ of this news in ░░░░░░░░ and most of this ░░░░░░░░ is coming from rumors ░░░░░░░░ don t really know ░░░░░░░░ true story And everyone ░░░░░░░░ to speculate It becomes ░░░░░░░░ more sensationalized that way ░░░░░░░░ we need a few ░░░░░░░░ days to understand what ░░░░░░░░ it doesn t mean ░░░░░░░░ didn t make some ░░░░░░░░ big missteps and I ░░░░░░░░ very interested to see ░░░░░░░░ those are and if ░░░░░░░░ re as bad as ░░░░░░░░ is speculating them to ░░░░░░░░ it s unbelievable that ░░░░░░░░ could put himself into ░░░░░░░░ position I m going ░░░░░░░░ ask you to speculate ░░░░░░░░ little bit the question ░░░░░░░░ ve got I was ░░░░░░░░ on the phone with ░░░░░░░░ reporter Kate rooney right ░░░░░░░░ the show and I ░░░░░░░░ okay they re claiming ░░░░░░░░ billion in losses or ░░░░░░░░ least that s the ░░░░░░░░ So my questionto Kate ░░░░░░░░ to you is very ░░░░░░░░ what are these 8 ░░░░░░░░ in losses this is ░░░░░░░░ exchange If uber loses ░░░░░░░░ billion a quarter I ░░░░░░░░ it because they have ░░░░░░░░ expenses that are outstripping ░░░░░░░░ revenue that happens a ░░░░░░░░ this is an exchange ░░░░░░░░ s supposed to be ░░░░░░░░ lite do you have ░░░░░░░░ idea what these 8 ░░░░░░░░ of losses actually represent ░░░░░░░░ there s a lot ░░░░░░░░ speculation and some of ░░░░░░░░ speculation is that he ░░░░░░░░ use customer funds to ░░░░░░░░ out Alameda his hedge ░░░░░░░░ venture and this is ░░░░░░░░ knockdown effect from the ░░░░░░░░ luna collapse and it ░░░░░░░░ massive ripple effect in ░░░░░░░░ industry And he bailed ░░░░░░░░ Alameda who was heavily ░░░░░░░░ in that and terra ░░░░░░░░ as well and it ░░░░░░░░ like this could potentially ░░░░░░░░ that he overleveraged himself ░░░░░░░░ stepped up they tried ░░░░░░░░ save a lot of ░░░░░░░░ that were impacted by ░░░░░░░░ terra luna collapse and ░░░░░░░░ seems like he just ░░░░░░░░ a little overleveraged and ░░░░░░░░ some things he probably ░░░░░░░░ t have done And ░░░░░░░░ that is right again ░░░░░░░░ I want to be ░░░░░░░░ we don t know ░░░░░░░░ s a lot of ░░░░░░░░ we ve got a ░░░░░░░░ of data that everyone ░░░░░░░░ trying to piece together ░░░░░░░░ DoJ is going to ░░░░░░░░ involved if it turns ░░░░░░░░ that there was just ░░░░░░░░ old fashioned losses at ░░░░░░░░ that this guy with ░░░░░░░░ m I t physics ░░░░░░░░ maybe and his team ░░░░░░░░ weren t good at ░░░░░░░░ we ve seen it ░░░░░░░░ long term capital management ░░░░░░░░ others that if there ░░░░░░░░ just losses that were ░░░░░░░░ backed up by ftt ░░░░░░░░ FTX or Bankman Fried ░░░░░░░░ customer accounts or whatever ░░░░░░░░ might be in some ░░░░░░░░ way would that be ░░░░░░░░ relief to the industry ░░░░░░░░ it doesn t necessarily ░░░░░░░░ that there is an ░░░░░░░░ wide contagion that this ░░░░░░░░ just wow they really ░░░░░░░░ up in Bankman Fried ░░░░░░░░ own words Exactly and ░░░░░░░░ of the biggest issues ░░░░░░░░ Alameda s balance sheet ░░░░░░░░ hold a lot of ░░░░░░░░ token as well as ░░░░░░░░ token and when those ░░░░░░░░ that s what they ░░░░░░░░ utilizing as collateral so ░░░░░░░░ weren t able to ░░░░░░░░ good on any of ░░░░░░░░ positions that they had ░░░░░░░░ the market And so ░░░░░░░░ s why he was ░░░░░░░░ to bail them out ░░░░░░░░ so yeah it s ░░░░░░░░ created a lot of ░░░░░░░░ sounds like I ve ░░░░░░░░ to go to a ░░░░░░░░ for this I ll ░░░░░░░░ the great philosopher Tony ░░░░░░░░ who in scar face ░░░░░░░░ don t get high ░░░░░░░░ your own supply And ░░░░░░░░ you have a company ░░░░░░░░ s backing up its ░░░░░░░░ assets with its own ░░░░░░░░ do you wonder reeve ░░░░░░░░ co founded tether worked ░░░░░░░░ razor fish you ve ░░░░░░░░ companies probably very well ░░░░░░░░ heavily regulated companies Do ░░░░░░░░ wonder how regulators just ░░░░░░░░ this just Well it ░░░░░░░░ not that they missed ░░░░░░░░ It s very difficult ░░░░░░░░ regulate And the regulators ░░░░░░░░ doing their best to ░░░░░░░░ themselves and ideally make ░░░░░░░░ regulations And Sam Bankman ░░░░░░░░ was putting himself first ░░░░░░░░ foremost in that space ░░░░░░░░ actually help them regulate ░░░░░░░░ become the most regulated ░░░░░░░░ exchange so it is ░░░░░░░░ that this took place ░░░░░░░░ do knowthat it is ░░░░░░░░ to trigger a lot ░░░░░░░░ scrutiny and a lot ░░░░░░░░ regulation But there are ░░░░░░░░ like coin base and ░░░░░░░░ base in the U ░░░░░░░░ that are already regulated ░░░░░░░░ they welcome more regulation ░░░░░░░░ they have more clarity ░░░░░░░░ FTX is again I ░░░░░░░░ no expert on crypto ░░░░░░░░ m a pretty good ░░░░░░░░ on financial markets and ░░░░░░░░ behavior having done this ░░░░░░░░ 25 years so if ░░░░░░░░ ask a stupid question ░░░░░░░░ apologize Did FTX buy ░░░░░░░░ lot of tether They ░░░░░░░░ as a stable coin ░░░░░░░░ or no Yes they ░░░░░░░░ had tether on their ░░░░░░░░ sheet Do we know ░░░░░░░░ status of those stable ░░░░░░░░ The status of tether ░░░░░░░░ the FTX balance sheet ░░░░░░░░ they re still there ░░░░░░░░ don t know I ░░░░░░░░ t know the status ░░░░░░░░ the FTX balance sheet ░░░░░░░░ well I think nobody ░░░░░░░░ reeve and I think ░░░░░░░░ s what we re ░░░░░░░░ trying to figure out ░░░░░░░░ we let you go ░░░░░░░░ there s a lot ░░░░░░░░ our viewers for them ░░░░░░░░ hear the lingo It ░░░░░░░░ a very jargon heavy ░░░░░░░░ I ve screwed up ░░░░░░░░ it many times explain ░░░░░░░░ them in just clear ░░░░░░░░ s terms the difference ░░░░░░░░ what tether is a ░░░░░░░░ coin and what an ░░░░░░░░ is because we re ░░░░░░░░ that ftt may not ░░░░░░░░ had anything behind it ░░░░░░░░ vapor Exactly so the ░░░░░░░░ to tether is it ░░░░░░░░ a 1 to 1 ░░░░░░░░ the elegance of tether ░░░░░░░░ business model is in ░░░░░░░░ simplicity you put 1 ░░░░░░░░ take it put it ░░░░░░░░ the bank create a ░░░░░░░░ and issue that token ░░░░░░░░ token now works on ░░░░░░░░ block chain And it ░░░░░░░░ always redeemable for that ░░░░░░░░ Now you might have ░░░░░░░░ that tether d pegs ░░░░░░░░ people are shorting tether ░░░░░░░░ s on third party ░░░░░░░░ Tether trades on these ░░░░░░░░ and there s lots ░░░░░░░░ demand and sell pressure ░░░░░░░░ goes down to 98 ░░░░░░░░ cent lots of buy ░░░░░░░░ it goes to 1 ░░░░░░░░ that s why people ░░░░░░░░ these massive shorts a ░░░░░░░░ million short that makes ░░░░░░░░ great news because they ░░░░░░░░ make 1 but at ░░░░░░░░ end of the day ░░░░░░░░ can always redeem that ░░░░░░░░ at the corporate website ░░░░░░░░ s why it s ░░░░░░░░ pegged to 1 tether ░░░░░░░░ d peg It s ░░░░░░░░ on the third party ░░░░░░░░ Ftt was another type ░░░░░░░░ stable coin that Sam ░░░░░░░░ to create that wasn ░░░░░░░░ one to one backed ░░░░░░░░ dollars He created other ░░░░░░░░ and other mechanisms to ░░░░░░░░ to peg it similar ░░░░░░░░ terra luna And those ░░░░░░░░ experiments And they ve ░░░░░░░░ the only one that ░░░░░░░░ battle tested and tried ░░░░░░░░ true is the one ░░░░░░░░ s super basic put ░░░░░░░░ money in the bank ░░░░░░░░ issue a token And ░░░░░░░░ s always going to ░░░░░░░░ one to one So ░░░░░░░░ feel confident to say ░░░░░░░░ founder of tether this ░░░░░░░░ not an ftt situation ░░░░░░░░ there s viewers and ░░░░░░░░ have to know the ░░░░░░░░ between all of these ░░░░░░░░ And there are critical ░░░░░░░░ Yes there are And ░░░░░░░░ s the problem people ░░░░░░░░ excited and they get ░░░░░░░░ up in the hype ░░░░░░░░ they hear that this ░░░░░░░░ is taking off so ░░░░░░░░ all pile in At ░░░░░░░░ point in time it ░░░░░░░░ like the emblem they ░░░░░░░░ in and they need ░░░░░░░░ get out before it ░░░░░░░░ until they find the ░░░░░░░░ that have the true ░░░░░░░░ like Bitcoin ethereum like ░░░░░░░░ that have real usefulness ░░░░░░░░ of these win tokens ░░░░░░░░ tokens they created out ░░░░░░░░ thin air and apparently ░░░░░░░░ up their own assets ░░░░░░░░ Collins really appreciate you ░░░░░░░░ it up coming on ░░░░░░░░ s a tough day ░░░░░░░░ is higher by the ░░░░░░░░ reeve, thank you very much