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).