This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Albert Einstein famously said that the definition of insanity was to do “the same thing over and over and expecting different results.” Well, the ex-CEO of the now-bankrupt FTX exchange, Sam Bankman-Fried (SBF), believes that resorting back to Ponzinomics – an operational model inspired by the mechanics of a Ponzi scheme – remains a viable way forward for the defunct crypto exchange.
You have to be particularly tone-deaf to double down on the very thing that created the original mess. As a refresher, FTX maintained a secretive symbiotic relationship with Sam Bankman-Fried’s crypto trading firm, Alameda Research. The arrangement entailed commingled bank accounts, allowing Alameda the facility of “borrowing” FTX client funds by simply posting collateral in the form of illiquid coins such as the FTT token. For the uninitiated, the FTT token is FTX’s in-house coin that offers a number of rewards to its holders. FTX maintained FTT’s value by periodically using a part of its fee-based revenue to purchase and then burn a proportion of the native token, thereby ensuring that Alameda’s collateral did not lose value.
This shrewd arrangement, however, came to a crashing halt once Alameda’s outsized exposure to the FTT token became public knowledge, prompting Binance to start dumping its FTT holdings. Amid the chaos, Alameda’s then-CEO, Caroline Ellison, gave away the firm’s floor price on FTT, inviting further speculative attacks. All the while, customers rushed to take their funds off FTX, creating a full-blown bank run. This eventually resulted in FTX filing for bankruptcy and Sam Bankman-Fried’s unceremonious exit from his apex position at the head of the crumbling multi-billion-dollar crypto empire.
Fire up the FTX exchange.
Issue a new FTT token.
Distribute the token to creditors/depositors.
Accrue 100% of profits to token holders.
It will be the biggest exchange in the world and users will be made more than whole.— Ran Neuner (@cryptomanran) December 9, 2022
This brings us to the crux of the matter. A delusional fan recently tweeted that FTX should “issue a new FTT token. Distribute the token to creditors/depositors. Accrue 100% of profits to token holders. It will be the biggest exchange in the world and users will be made more than whole.”
I continue to think that this would be a productive path for parties to explore! I *hope* that the teams in place will do so.
— SBF (@SBF_FTX) December 9, 2022
To this suggestion of revving up Ponzi scheme 2.0, Sam Bankman-Fried replied that it would be a “productive” path for parties to explore, essentially hammering home the point that the ex-CEO of FTX, after having triggered one of the biggest bankruptcies in corporate America’s history, seems to have learned virtually nothing and is willing to double-down on “shitcoinery,” as stated by MicroStrategy’s Michael Saylor, to save his skin. We are speechless at the sheer audacity and the callousness with which SBF still views his deliberate steps that have now caused untold misery to thousands of his clients.
FTX’s new CEO, John J. Ray III, a veteran lawyer who oversaw Enron’s bankruptcy, certainly has his hands full in trying to not only locate the misplaced funds of the exchange's clients but also curtail the damage from Sam Bankman-Fried's characteristically delusional musings.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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