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Co-produced with Philip Mause
It was often said that the early part of this century was the “golden age” of fraudulent schemes capped off by the enormous Madoff catastrophe, which is still the subject of media attention. Madoff was one of the main characters in the financial crisis of 2008. He swindled millions of dollars from a lot of people, including famous actor Kevin Bacon and his wife, who were two of his most high-profile clients. While the couple didn’t reveal how much they lost, it was clear most of their savings were for trusting a fraudulent man. However, they must have felt better when Madoff was sentenced to 150 years in prison.
The latest variation is the collapse of FTX, the second-largest crypto brokerage in the world. Apparently, FTX was funneling investor capital into its sister company, Alameda, which was then making leveraged bets on the crypto space. FTX was popular among many crypto investors thanks to massive advertising, celebrity endorsements, and its size. These provided the perception of safety, even though it was unregulated. Investors knew they were taking on the risk of investing in crypto, but many likely did not consider that the brokerage itself was smoke and mirrors.
It shouldn’t surprise anyone that such a thing happened in crypto. When massive sums of money are involved, fraud becomes very tempting and sometimes honest incompetence can lead to massive losses. The significant number of regulations in…
