GOOD TO TALK TO YOU.
>> THANK YOU SO MUCH, KENNEDY.
KENNEDY: SO DID SAM
BANKMAN-FRIED RUIN
CRYPTOCURRENCY FOR EVERYONE?
ADDED SLOW CANDIDATES ARE TRYING
CAN BE ADVOCATES ARE TRYING
ANYTHING THEY CAN TO DISTANCE
THEMSELVES FROM FTX’S FALL FROM
GRACE AND SAVE WHAT’S LEFT OF
THE CLIP EAU INDUSTRY.
LAWMAKERS STILL VERY MUCH OUT
FOR BLOOD AS THEY HAVE BEEN EVEN
IN THE BEST OF TIMES.
REPS FROM BOTH SIDES OF THE
AISLE TODAY HAD CHOICE WORDS
ABOUT WHAT COULD COME NEXT FOR
CRYPTO.
>> THE IDEA THAT CRYPTOCURRENCY
CAN BE A SOLUTION FOR FINANCIAL
INCLUSION IS NOT ONLY LAUGHABLE,
IT’S DANGEROUS, MR. RAY.
THESE GET QUICK RICH KIND OF ADS
TARGETING MY RESIDENTS, IT IS
PREDATORY.
AND TO QUOTE MY FRIEND SENATOR
WARREN, IT’S [BLEEP]
>> WE HAVE AN OBLIGATION TO DO
EVERYTHING IN OUR POWER TO
INSURE THIS NEVER HAPPENS AGAIN.
KENNEDY: SO WILL THE BIGGEST
REACTION BE INDUSTRY-KILLING
REGULAR RATION?
JOINING ME NOW TO DISCUSS,S
HISTORIAN KURT WALKER.
KURT, WELCOME BACK.
FROM YOUR PERSPECTIVE, WHAT IS
THE POTENTIAL FALLOUT HERE IN
TERMS OF REGULATION?
>> WELL, REGULATORS LIKE TO DO
ONE THING, AND THAT IS CERTAINLY
REGULATE.
LIKE I SAID LAST TIME THOUGH,
THE STUFF THAT HAPPENED HERE IS
CRYSTAL CLEAR LAW BREAKING, AND
SO TREATING, TREATING FTX LIKE
THEY’RE SOME KIND OF ANIMAL IN
BUSINESS THAT HAS NEVER EXISTED
BEFORE STILL JUST STRIKES ME AS
REALLY BIZARRE.
JUST RECLASSIFY FTX AS TO WHAT
THEY ARE WHICH IS, ESSENTIALLY,
AN ILLEGAL BANKING OPERATION
THAT IS RUNNING A GIGANTIC PONZI
SCHEME, CASINO, WHATEVER YOU
WANT TO CALL IT.
THERE’S ALREADY A LOT OF LAWS ON
THE BOOKS THAT CAN BE VERY
EASILY POINTED TOWARDS SAM AND
AND HIS COHORTS AND ULTIMATELY
TIGHTEN UP.
I DON’T THINK WE NEED SOME NEW
BUREAU OF REGULATORY PEOPLE.
WE DON’T NEED ANOTHER THOUSAND
FEDERAL EMPLOYEES JUST TO DO THE
SAME THING THEY’D BE DOING WITH
OTHER INVESTMENT COMPANIES
AROUND THE ECONOMY.
KENNEDY: ALL RIGHT.
HE WAS OBVIOUSLY A VERY HIGH
PROFILE PERSON WHO BOUGHT ACCESS
AND PRIVILEGE IN WASHINGTON.
WAS THERE RESENTMENT FROM YOUR
COMMUNITY HAVING JUST ONE GUY
THERE WITH ONE VOICE CRAFTING
HIS OWN LEGISLATION IN CONGRESS?
>> IT IS WEIRD.
SO SAM REALLY DID KIND OF POP
OUT OF NOWHERE ABOUT TWO YEARS
AGO.
I HAD NEVER HEARD OF HIM, AND
I’VE BEEN AROUND FOR TEN YEARS,
AND I KNOW A LOT OF PEOPLE THAT
DO A LOT OF THINGS IN THE SPACE.
HE DIDN’T JUST SHOW UP, HE
SHOWED UP AS THIS BILLIONAIRE OR
WHO GOES OUT AND AND HOPS ON
STAGE WITH BILL CLINTON AND TONY
BLAIR, AND HE’S ON THE COVER OF
"FORBES," AND HE’S GOING TO BE
THE NEXT WARREN BUFFETT.
AND A LOT OF PEOPLE I MOW WERE
SAYING, DID YOU KNOW HIM?
IF WHERE DID HE COME FROM?
AND THEN ALL OF A SUDDEN HE’S
TALKING ABOUT REGULATION, HE’S
GOING TO CHANGE THE WORLD AND
HE’S GOING TO GIVE ALL HIS MONEY
AWAY AND HE’S A VEGAN.
AND SO HE JUST, HE KIND OF COMES
ACROSS AS SOMETHING LIKE A PR
AGENCY MADE SOMETHING OUT OF
CLAY THAT LOOKS EXACTLY LIKE A
MOLE TO MAKE THE INDUSTRY LOOK
GOOFY.
AND THEN, OBVIOUSLY, NOW HE’S
MADE BASICALLY EVERYBODY IN THE
ENTIRE BLOCKCHAIN ECONOMY VERY
SUSPECT TO MAINSTREAM OBSERVERS,
AND I DON’T KNOW, WHOLE THING
JUST REALLY STINKS.
AND THE FACT THAT IT TOOK 30
DAYS OR MORE FOR HIM TO BE
ARRESTED?
ALL OF IT’S GOOFY.
KENNEDY: YEAH.
AND THE FACT THAT WE’RE TALKING
ABOUT $32 BILLION.
SO, YOU KNOW, YOU’VE GOT A LOT
OF SMART PEOPLE THAT HE
INTERFACED WITH, PEOPLE WHO HAVE
BEEN BURNED BY FRAUDSTERS IN THE
PAST.
HOW DID HE GET INTO PLACES LIKE
SEQUOIA?
IF IS IT JARGON?
>> WELL, HE’S A RICH KID, FIRST
OF ALL, YOU KNOW?
SAM DRESSES LIKE HE’S 15 YEARS
OLD AND JUST CRAWLED OUT OF BED,
BUT HE’S 30 YEARS OLD, AND HE’S
THE SON OF SOME VERY POWERFUL
AND WELL-CONNECTED PEOPLE.
AND SO IT’S THE KIND OF THING
WHERE YOU CAN SAY, HEY, DAD,
DIDN’T YOU HAVE A FRIEND AT
SEQUOIA?
AND IF THE ANSWER IS YES OR
MAYBE, THEN I THINK SAM PROBABLY
JUST TUGGED ON THAT THREAD.
IT’S REALLY THE ONLY THING THAT
MAKES MY SENSE TO ME, FRANKLY.
NOW, HE DOESN’T STRIKE ME AS A
PARTICULARLY GOOD SALESMAN, HE’S
NOT A PARTICULARLY GOOD SPEAKER.
HE DOESN’T EVEN REALLY INSPIRE
MUCH CONFIDENCE IF YOU SIT AND
LISTEN TO HIM TALK ABOUT MUCH OF
ANYTHING.
THE ONLY THING THAT MAKES SENSE
IS SORT OF OLD FAMILY TIES AND
REALLY KIND OF PAINTING HIM AS
SOMETHING THAT HE ISN’T.
AND IT ALMOST FEELS LIKE HE’S A
KIND OF A PATSY OR SOMETHING.
I DON’T WANT TO GET
CONSPIRATORIAL --
KENNEDY: GO AHEAD.
>> YEAH, I MEAN, OREGON HOW TO
WALK INTO SEQUOIA TO ASK FOR A
BILLION DOLLARS.
[LAUGHTER]
KENNEDY: YEAH.
AND YOU MOW A LOT.
YOU HAVE A LOT OF INFORMATION IN
YOUR HEAD, AND WHAT SETS YOU
APART FROM SAM IS YOU PROBABLY
READ ABOUT STUFF.
YOU PROBABLY DO MORE RESEARCH.
SO, YOU KNOW, IT’S ONE THING TO
GET IN THE DOOR.
A LOT OF PEOPLE CAN GAIN ACCESS,
BUT MAKING IT THROUGH THOSE
MULTIPLE LEVELS AND SECURING
PEOPLE’S CONFIDENCE, THAT’S WHAT
A CON MAN IS.
AND THAT’S WHAT HE DID.
AND I TEND TO AGREE THAT, YES,
THIS IS GARDEN VARIETY FRAUD FOR
WHICH THERE ARE A NUMBER OF LAWS
AND STATUTES ON THE BOOKS TO
WHICH HE CAN BE PROSECUTED.
YOU KNOW, BUT THE QUESTION IS
FOR PEOPLE WHO WANT
DECENTRALIZED CURRENCY, HOW LONG
WILL IT TAKE TO GET BACK TO A
PLACE OF TRUST?
>> WELL, THAT’S THE UNFORTUNATE
THING ON THE ALTAR HERE THAT’S
BEING SACRIFICED IS WE ACTUALLY
HAVE REALLY GREAT TECHNOLOGY
THAT ALLOWS FOR LOW FRICTION
GLOBAL PAYMENTS AND FOR
INCREASED DATA INTEGRITY.
AND, IN FACT, THE TOOLS TO STOP
THE SORT OF FRAUD THAT SAM HAS
COMMITTED HAVE EXISTED FOR
ALMOST 15 YEARS IN THE BITCOIN
SPACE.
AND THE FACT THAT SOMEBODY LIKE
SAM WAS ABLE TO GET THIS MANY
PEOPLE TO TRUST HIM AND THEN USE
CELEBRITIES TO ADVERTISE AND
TAKE IN ALL OF THESE BILLIONS OF
DOLLARS, IT REALLY JUST SPEAKS
TO THE FACT THAT PEOPLE DON’T
UNDERSTAND WHAT THE TECHNOLOGY
IS, THEY DON’T KNOW WHAT IT’S
FOR, AND THE FACT THAT IT WAS
USED AS A SORT OF PONZI SCHEME
AND GIANT GRIFT -- CAN.
KENNEDY: SO EASILY.
>> -- THAT’S A BIG BLACK EYE,
AND IT REALLY STINKS.
IT’S VERY UNFORTUNATE.
KENNEDY: YEAH.
WELL, SAM, SO EAT SOME CHEESE.