WASHINGTON, DC – DECEMBER 08: CEO of FTX Sam Bankman-Fried testifies during a hearing before the … [+]
It’s easy to describe the FTX scam as “unprecedented.” After all, concepts like blockchain or cryptocurrency haven’t been around for decades, let alone centuries.
But it is anything but unprecedented. I have followed the crypto space closely in recent years and, while it is a unique segment of the overall market, it is not immune to the lessons of history.
As the pressure began to mount on FTX founder and CEO Sam Bankman-Fried, my wife happened to express interest in watching the four-part Netflix docudrama on Bernie Madoff’s infamous Ponzi scheme. (I assured her that I already understood the Madoff scandal, but I was wrong). Naturally, Madoff: The Monster of Wall Street got me thinking about Bankman-Fried and FTX—the similarities, differences, and warning signs for the future.
What they ultimately have in common is the very human ignorance—either willful or not—of the past’s insistence on being prologue. I spent more than four decades running institutions that either lent or invested money, and the scariest words I’d…
