Originally published on frontruncrypto.com — click here to subscribe for free.
Dear frontrunners,
The system of complex corporate structures & financially engineered crypto derivatives continues to unravel with every new bankruptcy proceeding, creditor claim, and financial statement leaked on the internet. Two themes permeate throughout every document: FTX is at the center, and more customer funds are lost. It is mentally exhausting that we continue to give this criminal any airtime; it is not my intent to extend his 15 minutes of fame.
We are here to document the criminality of FTX and how a small group of 8 crypto banks and hedge funds intentionally colluded to engineer synthetic bitcoin derivative demand using depositor funds while simultaneously creating complex, opaque corporate structures to obfuscate their true assets and liabilities.
In part 1, we outlined how these firms used depositor and institutional funds to buy bitcoin, to convert to GBTC, to use as collateral to borrow USDC, to buy more bitcoin, to convert to GBTC, to use as more collateral for USDC, to buy more bitcoin, to convert to more GBTC in an infinite loop of synthetic (fake) demand.
If you haven’t read it, I encourage you to start here, as this analysis will expand upon the flow of funds…
