Leave it to Jesse Powell to say what everyone in crypto is thinking. “I’m really trying to control my rage,” the mind behind Kraken tweeted to begin his rant. In the following article, we’ll comment on several of his very interesting points. Make no mistake, though, Jesse Powell thinks this isn’t over and the crypto industry will have to work for years to make up for… some other cryptocurrency exchange’s mistake. “More business failures are sure to come as the contagion spreads,” he warned.
2/ Our good, trusting nature makes us easy targets for con artists. Some even tell us straight up that they're here for profits, not crypto, and we praise them for their honesty.
Yet we're surprised when they turn out to be who they said they are. We need to raise our standards.
— Jesse Powell (@jespow) November 10, 2022
At one point, Powell even gave the best advice possible for future crypto investors. “Don’t trust. Verify.”
What he didn’t do, though, was naming Sam Bankman-Fried, FTX, or Alameda Research. We are assuming this is all about them, but it’s just an assumption.
Jesse Powell Allegedly Blast Sam Bankman-Fried
First of all, the head of Kraken doesn’t buy the “I made a mistake” line that Sam Bankman-Fried has been feeding the public via Twitter. And Powell doesn’t mince words while saying he doesn’t.
“This isn’t about aiming high and missing. This is about recklessness, greed, self-interest, hubris, sociopathic behavior that causes a person to risk all the hard-won progress this industry has earned over a decade, for their own personal gain.”
The thing is, Sam Bankman-Fried didn’t only blow up his two billion-dollar businesses. He blew up the whole crypto industry. “We give them power to speak for us but they haven’t earned that privilege. When they blow themselves up, it’s our house, our reputation, our people which bear the brunt of the damage,” Powell tweeted. And he’s probably right about this. Everyone will have to pay for Bankman-Fried’s mistakes.
5/ The damage here is huge. An exchange implosion of this magnitude is a gift to #bitcoin haters all over the world. It's the excuse they were waiting for to justify whatever attack they've been keeping in their back pocket.
We're going to be working to undo this for years.
— Jesse Powell (@jespow) November 10, 2022
Then, in a bizarre turn of events, Jesse Powell brought bitcoin into the mix:
“An exchange implosion of this magnitude is a gift to bitcoin haters all over the world. It’s the excuse they were waiting for to justify whatever attack they’ve been keeping in their back pocket.”
What does the FTX implosion have to do with bitcoin? In fact, out of all the crypto world, bitcoiners are the less affected by all of this. In bitcoin culture, the self-custody of your assets is paramount. And people who make the effort and self-custody aren’t directly affected by exchanges blowing up and losing their customer’s hard-earned money. They are affected by the price movements these black swan events generate, though.
FTT price chart for 11/10/2022 on Binance | Source: FTT/USD on TradingView.com
Are The Media, VCs, And The US Government To Blame?
This is the most interesting part of Jesse Powell’s rant. As bitcoiners denounced Sam Bankman-Fried’s shady business model left and right, the man became a media darling like few others. His frequent political donations, the way he said what the establishment wants to hear about crypto regulation, and the whole myth about him being an effective-altruism vegan were the perfect combination.
“VCs, the media, the “experts” failed. People torched their own reputations vouching for individuals, projects, businesses they had not diligenced.”
We’re pretty sure “diligenced” is not a word, but Jesse Powell’s message stands. The media failed miserably and led retail astray. They will never admit to their wrongdoings, but Sam Bankman-Fried was on the cover of “Fortune” a couple of weeks ago. “The New Warren Buffet?” was the article’s title.
9/ Red flags:* acting like you know everything after showing up to the battle 8 years late* 9 figs buying political favor* being overeager to please DC* huge ego purchases, like 9-fig sports deals* being a "media darling", seeking out puff pieces* EA virtue signaling* FTT
— Jesse Powell (@jespow) November 10, 2022
What about VCs, though? Aren’t they at least partially responsible for financing FTX? Before you answer, read what Jesse Powell has to say about it. He’s got inside information:
“I know for a fact that VCs wrote checks blindly. Why? Because revenues were strong. Were they sustainable? Were they bleeding out money the other side? Was it all predicated on an untenable self-dealing setup, frontrunning clients, misappropriation of user funds? Never asked.”
11/ US lawmakers & regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongfully focuses on convenient, on-shore good actors.
— Jesse Powell (@jespow) November 10, 2022
Last but not least, what about the US Government and its lack of crypto regulation clarity?
“US lawmakers & regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner.”
Jesse Powell is not saying those institutions are as guilty as Sam Bankman-Fried allegedly is, but they really dropped the ball on this one. And, as it always happens, the people suffered.
Featured Image by Luke Jernejcic on Unsplash | Charts by TradingView
