As it happens, Coffeezilla, a YouTuber who investigates online scams, published a video on April 27, 2022, in which he drew attention to Sam Bankman-Fried’s (SBF) controversial remarks during his interview with Bloomberg financial columnist Matt Levine and the Odd Lots podcast.
‘A box’ that does nothing
During the interview, SBF tried to describe what yield farming is but ended up accidentally describing a Ponzi scheme that starts “with a company that builds a box.” As he explained: As he continued, Bankman-Fried highlighted that “then this protocol issues a token, we’ll call it an ‘X’ token, and ‘X’ token promises that anything cool that happens because of this box is going to ultimately be usable by governance vote of holders of the ‘X’ tokens.”
Creating the hype
Going forward, the former FTX CEO said that “in five minutes, with an internet connection, you could create such a box and such a token, and that should be worth like $180 or something market cap for the effort you put into it. In the world we’re in, everyone’s going to be like, ‘ooh, box token, maybe it’s cool.’ If you buy it, it’s going to appear on Twitter, and it’ll have a $20 million market cap.” Describing the hype that might follow, SBF said that “all of a sudden, everyone’s like ‘wow people just decide to put $200 million in the box, that is a pretty cool box,’ right? (…) And who are we to say that they’re wrong about that?”
How long can Ponzi scheme continue?
Upon the hosts noticing that what he was describing was basically a Ponzi scheme, SBF didn’t seem to mind and took it even further: Recently, Coffezilla went back to his old video and commented that it has “aged like a fine wine,” referring to the scandal surrounding the crypto exchange and the damage spilling over to the entire crypto market, sinking its total capitalisation back to pre-2021 levels, Meanwhile, the crisis has earned SBF comparisons with Bernie Madoff, a Wall Street financier who ran the largest Ponzi scheme in history, by both the “Rich Dad, Poor Dad,” author Robert Kiyosaki and podcaster Joe Rogan. Watch the entire video below:
