Dori: Is your cryptocurrency part of the new FTX scandal?

Nov 18, 2022, 5:02 PM | Updated: Nov 20, 2022, 6:26 am
CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill December 8, 2021 in Washington, D.C.(Photo by Alex Wong/Getty Images)
(Photo by Alex Wong/Getty Images)

Worse than Enron.

That’s what experts are calling the FTX financial scandal still erupting before cryptocurrency investors’ eyes.

Business ethics author, founder of The Integrity Institute and Enron whistleblower Lynn Brewer told Thursday’s Dori Monson Show that the FTX case could have an even deeper reach – especially for the millions of customers who bought Bitcoin and other cryptocurrencies.

Brewer – who said she was an early crypto investor for $4,000 – said she has ridden the “upside and the downside” of the purchase.

In a straight-forward interview, Brewer explained how FTX became a “giant money laundering scheme” that, like Enron, is going to hurt “the little guy who lost their money.”

FTX was started in 2019 by Sam Bankman-Fried to prop up Alameda Research, a company started in 2017. The companies – operating out of The Bahamas – would buy Bitcoin and other cryptocurrencies at a lower price in one part of the world and sell them at higher prices elsewhere, leaving Bankman-Fried’s team to keep the profits.

Dori: Parent upset with appointment of felon as Olympia School Board Member

Even though Bitcoin was a trade used on Wall Street, Alameda had zero regulatory oversight.

FTX and Alameda, Brewer explained, targeted everyday investors who wanted in on trading the popular new cryptocurrencies. High-profile celebrities – including NFL superstar Tom Brady and Larry David, co-creator of TV’s “Seinfeld” and “Curb Your Enthusiasm,” were used to advertise the company.

Company officials told potential investors last year that it was making $1 billion in annual revenue. With its leveraged, or borrowed, money, Bankman-Fried is thought to have purchased millions in offshore real estate. Before the scandal broke, the 30-year-old was believed to be worth $23 billion.

Last week, lawyers – including his Stanford Law School professor and father, Joseph – convinced Bankman-Fried to step down. John Ray III has since been named the new CEO. Ray was also on the team that dealt with the aftermath of the Enron collapse.

Reports show that because FTX and Alameda were so dependent on each other, both companies were shattered when crypto prices started dropping earlier this year. The downfall has created billions of dollars in losses for crypto traders and customers.

More from Dori: Ingraham teacher swears, blames Seattleites who ‘didn’t vote blue’ for school shooting

How were there no red flags? Dori wondered.

“There were red flags,” Brewer responded. She pointed to Bankman-Fried’s own public comments about what he saw as weaknesses in regulations that allowed him to operate.

Meanwhile, Brewer added, with $70 million in contributions, Bankman-Fried’s company was the third largest donor to the Democratic Party. In comparison, the now-bankrupt energy company, Enron, donated $100 million to Republicans.

Listen to Dori Monson weekday afternoons from noon – 3 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

Dori Monson on KIRO Newsradio 97.3 FM
  • listen to dori monsonTune in to KIRO Newsradio weekdays at 12 noon for The Dori Monson Show.

Dori Monson Show

Dori Monson

seattle police...
Dori Monson Show

Dori: Internet sleuth helps Seattle police arrest suspect in attempted rape, robbery

Using doorbell video camera images of other alleged crimes throughout Seattle, Richard used his Internet sleuthing skills to help police.
3 days ago
Dori appreciate Seattle City Light...
Dori Monson

Dori: I can appreciate government work every once in awhile

I love being a watchdog of government. And that includes spotlighting great work. I appreciate utility workers for their help this week.
6 days ago
Dori Monson Show

Dori: Should you add a kangaroo to your Christmas wish list?

Strom – who has been raising both ‘roos and wallabies for 25 years on his preserve – had some words of marsupial-owning wisdom for Dori.
7 days ago
Dori Monson Show

Dori: Petition calls for entire Olympia School Board to resign after appointing felon

Barely one month after four Olympia School Board members unanimously appointed a convicted felon to fill a board opening, a no-confidence petition has been posted by community members, calling for the entire board to resign.
9 days ago
Dori Monson Show

Dori: FTX crypto scandal hits Washington bank, politicians

Unlike Bitcoin, “crypto is the Wild West” with no regulations on truth in advertising, Brewer added.
11 days ago
Apple Cup rivalry...
Dori Monson Show

Apple Cup rivalry: Couple’s ashes to be buried in UW, WSU helmets

The Apple Cup kicks off for UW and WSU this Saturday, but one married couple is taking the rivalry to their own eventual 'end zone.'
14 days ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Dori: Is your cryptocurrency part of the new FTX scandal?