Sign Up on MEXCRipple CTO Has This to Say On FTX Being A Ponzi
David Schwartz, the chief technology officer of Ripple Labs and a co-creator of XRP Ledger and XRP, has taken to Twitter to somewhat defend FTX founder Sam Bankman-Fried’s reputation of being called a Ponzi creator.
As CoinGape earlier reported today, SBF announced that he had filed for FTX and Alameda Research bankruptcy, upon failing to meet a $9 Billion hole in their financial records.
Read More: FTX Exchange Files For Bankruptcy
Twitter Debates Over FTX’s Ponzi Link
Following this, Twitter is abuzz with SBF orchestrating a large-scale Ponzi scheme through its FTX.com and therefore comparing him with the likes of Bernie Madoff. Ripple’s CTO however believes that there are “huge apparent differences” between the two, but then again, he admits that FTX ended up being a Ponzi later on.
David’s Take on SBF vs Madoff
According to Schwartz, Sam Bankman-Fried appears to have started FTX as a legitimate cryptocurrency business before it gradually turned into a pyramid scheme, in contrast to Bernie Madoff who intentionally started with a Ponzi scheme in the hopes of later replacing it with a legitimate business, but instead created the largest Ponzi in history worth nearly $65 billion.
He believes that when Alameda Research started to lose money, FTX gradually started to become a Ponzi scheme. Another possibility is that the founder of FTX wanted the company to increase its profitability.
He further went on to state,
His scheme ran off the rails either when Alameda starting losing money or he just wanted Alameda to make more money. He put huge, entirely inappropriate risk on FTX, at first possibly to make it more profitable, eventually in an attempt to keep it afloat.
I'm seeing SBF compared to Madoff. There are huge apparent differences, at least now. Madoff started off a Ponzi and maybe he hoped to replace it with legitimate profits at some future point. SBF seems to have started off legitimate then gradually replaced it with a Ponzi. 1/6
— David "JoelKatz" Schwartz (@JoelKatz) November 12, 2022
Another key difference between the two Ponzies is that whereas Sam Bankman-Fried lent customers money that he was not permitted to do, Madoff made consumers lose money from the get-go.
Read More: This Famous Billionaire Investor Defends FTX’s SBF, Deletes Tweet Instantly
SBF’s Net Worth Today
At its peak, SBF had a net worth of over $16 billion. But crypto’s once-shining star, lost 98% of his wealth in a single day, following the demise of FTX.
- Expert Predicts 138% Shiba Inu Rally as SHIB Futures Listing Opens Spot ETF Path
- Bitcoin Will 200x From Here, Twenty One Capital CEO Says as BTC Breaks $117K After Fed Rate Cut
- BNB Chain Takes Lead in RWA Tokenization, Expert Sees BNB Rally to $1,300
- Grayscale’s GDLC Fund Holding SOL and ADA Gets SEC Nod for NYSE Debut
- Crypto Market Rally: Will Bitcoin Catch Up With S&P 500 Gains After Fed Rate Cut?
- Toshi Coin Gains 57% in One Day: What’s Driving the Sudden Upside?
- Shiba Inu Price Set to Soar as Exchange Reserves Dive Amid SHIB ETF Chatter
- Pepe Coin Price Prediction as Whale Moves $25M From Robinhood- Is a Breakout to $0.00002 Next?
- XRP Price Prediction as Market Longs Hit 78% amid VivoPower Treasury Expansion Launch — Is $4 Next?
- SHIB Price Forecast: Taker Buys Lead as Developers Counter Shibarium Exploit
- Solana Price Set for a 25% Jump as Open Interest Nears a $20 Billion Milestone
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
