David Schwartz, Chief Technology Officer at Ripple Labs, who is also the co-founder of XRP Ledger and XRP, said: of FTX made statements about its founder, Sam Bankman-Fried, on Twitter.
Earlier yesterday, SBF announced that it had filed for bankruptcy for FTX and Alameda Research, thus bitcoin by pulling the price further down, causing the $ 17,000 to see gold.
Ripple CTO About SBF: “Started as a Legitimate Cryptocurrency Exchange and Turned into a Ponzia”
The Ripple CTO believes there are “big clear differences” between the two, although many on Twitter have compared FTX to Madoff’s pyramid scheme. Still, he admits that FTX is a Ponzi:
“I see SBF being compared to Madoff. There are big differences between them, at least for now. Madoff started with a Ponzi and perhaps hoped to make up for it with legitimate profits in the future. SBF, on the other hand, seems to have started legitimately and then gradually replaced it with Ponzi.”
Unlike Bernie Madoff, who produced the largest Ponzie in history worth nearly $65 billion, Schwartz said Sam Bankman-Fried started FTX as a legitimate crypto business and then gradually turned into a pyramid scheme, while Madoff intentionally He believes he started out as a Ponzi and perhaps hopes to replace it with a legitimate company later on.
Schwartz believes FTX started to evolve into a Ponzi when trading firm Alameda Research, affiliated with SBF, started losing money. Another scenario here is that the founder of FTX wanted the company to become more profitable.
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
Whatever the case, David Schwartz believes that SBF puts a huge risk on the crypto exchange to first increase its profits and then simply keep it afloat.
Another difference between the two Ponzis, according to Schwartz, is that Madoff made people lose money from the start, while Sam Bankman-Fried lends out client funds this way he shouldn’t have used.
*Not investment advice.
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