CHARBONNEAU – Follow the stars and lose your money

INVESTORS, HEARING of a “good thing” but don’t have a clue, look to the stars for advice.

It has always been so. We elevate ordinary people to the level of gods, only to find they have feet of clay.

And those we elevate respond to the adoration with the unshakable belief in their own inflated egos and sense of infallibility.

Sometimes ordinary-looking people seem to be prophets; people such as the leader of the failed cryptocurrency ponzi debacle, Sam Bankman-Fried.

Bankman-Fried had an almost hypnotic influence over his followers, despite, or perhaps because of his schlubby dressing. He followed the trend of tech leaders by under-dressing for the occasion — a trend going as far back as the prophet Isaiah who preached in sackcloth. A humble style emulated by Steve Jobs with his jeans and black turtleneck.

Dressed in modern-day sackcloth, Bankman-Fried spoke in prophetic terms.
When asked to explain the concept of “yield farming,” the method he had supposedly mastered for earning massive windfalls, he answered that crypto yields could be “squeezed” from a metaphorical black box that does “nothing.”

If it sounds cryptic, would we expect anything else of crypto-prophet?

A humble appearing man, who came to reveal the revelations of tech to followers, also attracted stars into his orbit.

Actors, athletes and other celebrities rushed to embrace the gospel of Bankman-Fried. And who could refuse the easy money of cryptocurrencies?

During the boom times, Paris Hilton, Snoop Dogg, Reese Witherspoon and Matt Damon all gushed about, or invested in crypto projects, bringing a mainstream audience to the dubious world of digital currencies. It was fun, and lucrative, while the prices soared.

One of those stars was Tom Brady, the seven-time Super Bowl-winning quarterback. As an “ambassador” for FTX, he had appeared at the company’s conference in the Bahamas and in TV commercials that promoted the exchange as “the most trusted” institution in the world of crypto.

One meeting between the football star and the prophet was mesmerizing, says an executive for FTX. He described the meeting with Bankman-Fried and Brady in a deal in which Brady would praise the “revolutionary FTX team.”

“Imagine a tiger and a lion talking,” the executive gushed, “They’re slightly different, they do different things, but they’re really formidable in their own arenas.”

After Bankman-Fried’s fall from grace, Brady’s money was at stake. As part of an endorsement agreement, FTX had paid him US$30 million, a deal which consisted almost entirely of FTX stock. Brady’s wife at the time, supermodel Gisele Bündchen, was paid US$18-million in FTX stock.

That was just the start of Brady’s heartaches. He divorced his wife. The “money” he was paid is almost worthless. Now Brady is being sued by a group of FTX customers seeking compensation for his endorsement of the exchange.

On top of it all, the terms of the deal have required the former couple to pay taxes on at least some of their now worthless FTX stock.

We look to the stars for guidance and to gods come to earth humbly-clothed. It often turns out badly.

David Charbonneau is a retired TRU electronics instructor who hosts a blog at http://www.eyeviewkamloops.wordpress.com.