Hey now, you're an all-star...

Recording this event for posterity, on this 12th day of December, 2022:

Most of the FTX news from the preceding 24 hours had been all about how SBF was going to testify before Congress, and what would he say when testifying before Congress.

SBF will not be testifying before Congress. Because he's too busy. Being in prison.

I want to know what the charges will be. I mean, obviously it will be some species of fraud, but I'm dying to know the specifics. Admit it... you're dying to know, too.

Happy Monday!

FTC vs. ATVI+MSFT, in perspective

It appears that Lina Khan is serious about putting the brakes on tech industry mergers. Much to the surprise of many, many pundits and LawTubers, the FTC is suing to block Microsoft's acquisition of Activision Blizzard King (ABK).

The consensus of opinion seems to be coalescing around the idea that the FTC's case is weak. This consensus essentially takes Microsoft's position at face value:

1. that Microsoft Gaming is a much, much smaller player in the video games industry than either PlayStation (owned by Sony) or Nintendo;
2. that Microsoft have no presence in mobile gaming at all, unlike ABK, or any of ABK's major competitors in the mobile space, like Tencent or NetEase;
3. that Microsoft's control of ABK will have no competitive impact on the industry, since they're going to leave Call of Duty (CoD) available on competing platforms, including both Sony's PlayStation and Nintendo's Switch, for ten years.

If you assume that this argument is 100% true, then Sony appear to be freaked out over the deal for essentially no reason at all, and the FTC's objections to the deal appear to be entirely political. At best, the collective thinking goes, suing to block the deal is effectively a bargaining ploy: the entire process of resolving the suit could prolong the process of getting the deal done for months or years, and cost Microsoft hundreds of millions of additional dollars in penalties (per the deal) and legal fees. Faced with this prospect, Microsoft might be more amenable to the types of concessions the FTC might ask for.

I'm going to be the contrarian in the room, though, and point out that the FTC might be looking at a bigger picture than just this deal between Microsoft Gaming and ABK. Real talk here: taken as an independent entity, Microsoft Gaming, third-place purveyor of money-losing consoles and the games that people can play on them, probably don't have 68.7 billion US dollars to spend buying ABK or anyone else. This deal is only possible because Microsoft Gaming isn't an independent entity; it's only possible because Microsoft Gaming is merely the gaming division of a much, much larger entity.

Microsoft Gaming isn't buying ABK. Microsoft Corporation is buying ABK. And, viewed through that longer lens, the picture looks a lot different.

Predictable, and also predictable

As reported by Reuters:

Nov 19 (Reuters) - Donald Trump on Saturday said he had no interest in returning to Twitter even as a slim majority voted in favor of reinstating the former U.S. President, who was banned from the social media service for inciting violence, in a poll organized by new owner Elon Musk.

Slightly over 15 million Twitter users voted in the poll with 51.8% voting in favor of reinstatement.

"The people have spoken. Trump will be reinstated," Musk tweeted.

[...]

Trump had appeared less than keen earlier in the day.

"I don't see any reason for it," the former president said via video when asked whether he planned to return to Twitter by a panel at the Republican Jewish Coalition's annual leadership meeting.

He said he would stick with his new platform Truth Social, the app developed by his Trump Media & Technology Group (TMTG) startup, which he said had better user engagement than Twitter and was doing "phenomenally well".

Twitter did not respond to a request for comment.

Elon Musk reinstating Trump's Twitter account was the single negative outcome that almost everyone was dreading... except, of course for Trump's supporters.  The potential negative impact on the American electoral process, and political discourse in general, combined with Elon's libertarian tech-bro bloviations, had many people worried that Elon was effectively buying Twitter specifically reinstate Trump's Twitter access, as a sort of Ultimate Shit Post.

Now, just two weeks later, the reality of Musk's stewardship of Twitter have been across-the-board disastrous to such an extent that even Trump doesn't want to be associated with such a lustily-burning garbage fire, preferring his own social media startup even though Truth Social is also a hot mess, and a fraction of Twitter's size.

Ouch, baby. Very ouch.

I don't know what Musk was thinking here, but attempting to embrace Trump, only to be rejected, seems to me like a low-percentage play. A sort of "Hail Mary" play, if you will, except that he's thrown an interception on that play, while his team-mates flee the field. Because it's on fire.

GG, Elon! Nice work.

The fallout keeps falling, and it won't stop falling...

It feels a little weird to keep posting posts from someone else's blog, but I can't stop reading Molly White's "Web 3 is Going Just Fine," and I have to write about it. I've said it before, and I'll say it again - if you're not yet following her blow-by-blow historical documentation of crypto's collapse, then you should remedy that immediately. 

Seriously, Molly, if you see this, please figure out some way to put all of this crypto history into book form -- I'll preorder that shit immediately, in hardcover, just to have it on the shelf.

And now, a quick round-up of today's hits.

Another foreseeable conseqence

Surprising nobody except, presumably, crypto-bros everywhere, the United States Congress has taken an interest in FTX.

As reported by The Block:

The House Financial Services Committee will hold a hearing next month on FTX’s collapse and the broader implications for the digital asset industry.

[...]

“Oversight is one of Congress’ most critical functions and we must get to the bottom of this for FTX’s customers and the American people,” said Rep. Patrick McHenry, R-N.C., the top committee Republican, in a statement. “It’s essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”

[Note for Rep. McHenry: There are no responsible players in crypto. Just FYI.]

Rep. Maxine Waters, D-Calif., the current but likely outgoing chair of the House Financial Services Committee, added:

“The fall of FTX has posed tremendous harm to over one million users, many of whom were everyday people who invested their hard-earned savings into the FTX cryptocurrency exchange, only to watch it all disappear within a matter of seconds. Unfortunately, this event is just one out of many examples of cryptocurrency platforms that have collapsed just this past year.”

[Oh, good, someone else remembers that Terra/Luna happened.]

It bears emphasizing that Rep. McHenry is a Republican, while Rep. Waters is a Democrat. Yes, in spite of the fact that MAGA Republicans are extremely pro-crypto, the fact that crypto is sufficiently awful that there ought to be a law has bipartisan support.

Entirely foreseeable, yet somehow still unforeseen, conseqences

When Changpeng "CZ" Zhao of 1st place crypto exchange Binance started the crypto equivalent of a bank run against his rival, 2nd place crypto exchange FTX, I imagine that he thought it would remain relatively contained. Sure, FTX would go down, and it would probably take Alameda Research with it, ruining SBF (Sam Bankman-Fried) in the process, along with anyone who had significant holdings in either firm, but CZ was clearly okay with that.

After all, CZ and SBF did not like each other, and misanthropy bordering on sociopathy seem to be pretty commonplace in the cryptosphere. WAGMI, except for those who don't make it, who clearly didn't deserve to make it. HFSP, paper hands losers. Such is the ethos of crypto.

I don't think that CZ truly appreciated just how unstable crypto's house of cards had become. He should have; the wide swath of destruction wrought by the collapse of Terra/Luna, a crash so disastrous that Terra/Luna's founder, Do Kwon, is still on the run from prosecution and fighting extradition, really should have been warning enough.

But crypto people, in addition to being immune to ethics and devoid of empathy, and also pathologically incapable of learning from experience. Terra/Luna, according to this world view, didn't crash because of any sort of systemic weakness in the cryptosphere; that couldn't have been the reason. That had to be FUD. Right? RIGHT??

And so CZ, oblivious to history, heedless of the suffering of others, driven by a combination of pettiness and greed, pushed SBF, FTX, and Alameda Research over the edge. And, in the process, set in motion a chain reaction that may destroy the cryptosphere completely.

And Molly White is tracking it all on her blog, Web3 is Going Just Fine (and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet).

The saga continues...

Again, from Molly White's Web3 is Going Just Great:

This just leaves us with one question: who's next?

I've said it before, and I'll say it again: when it comes to crypto, just don't do it. Friends don't let friends buy crypto. Just say no to crypto.

Also, go follow Molly White's blog. Seriously, it's so good.