This story is going to be very interesting as it plays out, and it does bear some comparisons to the whole trading cards as an alternative investment market and exchange structure that is being pushed out. Read up on it and see what can happen when a market is created out of thin air and it has no government regulations, but lots of salesmen with websites and hype.

The celebrity spokesmen for FTX are being dragged into the lawsuits and, although they probably knew nothing about the draining of assets, they took their fat fees to pitch it. So now Larry David, Naomi Osaka, Tom Brady, Giselle Bundchen and Shaquille O'Neal have a bit of explaining to do. I wonder if the likes of Matt Damon, who plugged another group, are getting worried?

I don't know how much this will affect the entire crypto currency market, but the only thing that holds it up is demand, same as stocks, same as cards and any other collectible. Once a lot of people want to cash out at the same time, the Bank may not be able to cover. When that happens FDIC insurance looks pretty good. No such thing with crypto, and no such thing with cards either.

There are lessons to be learned here, but greed seems to always beat out common sense.

I don't see why the celebrities have any explaining to do unless they're part of upper management. Otherwise, they're just the hired help reading the card for the camera. Would it do you any good suing Sean McVay if you get food poisoning from Campbell's Chunky Soup? I don't think so.

It's a matter of reputation. If a "celebrity" lends their public endorsement to something, then their "followers" might expect that they did the due diligence on it to make an honest recommendation. That's why their opinions are more valued than the ordinary person's opinions and why they can get paid big bucks to do it. A certain number of viewers or listeners are going to believe them and think they know enough about the product to back it up.

Just look at Tom Selleck and his reverse mortgages. When Matt Damon says "fortune favors the brave", maybe somebody thinks he made that one up himself and it's a good idea to dive into crypto with him. Meanwhile he's just getting paid to sound like an authority.

I don't think any of those FTX spokespeople are involved in what looks like the criminality that has gone on. It's even possible that some of them lost money investing, maybe. But I do believe that celebrities have a responsibility not to be the face of a company just because they are paid lots of money. There has to be some cost for using your name to endorse something that turns very bad.

That cost should be a piece of your good reputation, if nothing else.

quote:

Originally posted by catskilleagle:
I don't see why the celebrities have any explaining to do unless they're part of upper management.

I totally agree with you. . . That said. . .

I think the argument is that the celebs took equity as payment giving them ownership in the company.

Even if the celebs are found liable I'd hope their only exposure would be to the equity they received, which is likely worth basically nothing now.

Well, if the celebrity has partial ownership, that person might be trouble.

Anyone who looks for a job, should look at the companies they apply at. You don't want to work for a place that many people think is going to be out-of-business in six months. In the case of cryptocurrency exchanges, what does the average person see? The whole thing is a hard to understand gamble with no government oversight. Oh, you invested in that and you've lost 90% of what you put in? People in north-central Florida have a saying. "That's what you get."

People used to laugh at the guy who just hid money in his mattress. He didn't get any interest compounded daily but then he didn't lose anything when there was a recession or something else bad happening either.

Here is a 2020 quote reprinted in today's paper from someone who knows a bit about financial markets, Warren Buffett:

"Crypto-currencies basically have no value, and they don't produce anything. They don't reproduce. Thet can't mail you a check. They can't do anything and what you hope is that somebody else comes along and pays you more money for them later on, but then that person's got the problem. In terms of value: zero."

Sound kind of familiar to something else we know.

But trading cards and autographs are physical collectibles that have individual quantities, conditions, authentications and ultimately demand. Market demand is the key because there is little to no inherit value in printed cardboard, regardless of scarcity. Art and autographs add value to the cardboard, but even that value is defined by the taste and demand of the majority of buyers at any given time. That's why it should be a hobby, not a substitute for a Bank account.

That average people would invest their life savings in crypto, when they wouldn't ever think of buying say Marvel cards, is pretty ironic. At least they could hold a Marvel card. At least they could see a Marvel card. They couldn't understand crypto. No one can because it's all made up, but they got in to make the easy money. Only it's just a number on a statement that can disappear as soon as everyone wants out. As soon as there are more being sold than bought. The worst part is, no one will reverse course until they lose big. They always think it won't be them.

I was so confused when I looked into this thread. I thought Cryptozoic was going out of business and was wondering who or what FTX is. LOL!!

quote:

Originally posted by Jessica:
I was so confused when I looked into this thread. I thought Cryptozoic was going out of business and was wondering who or what FTX is. LOL!!

Yeah, sorry. I didn't realize how close that reads.

FTX blowing up is a major scandal though and is very likely to affect all the crypto-currency exchanges. Hopefully people will realize that they are taking real risks when they don't fully understand their investments and allow under-regulated entities to have control over their hard-earned money.

quote:

Originally posted by Jessica:
I was so confused when I looked into this thread. I thought Cryptozoic was going out of business and was wondering who or what FTX is. LOL!!

Me, also. You're not alone. I thought FTX was a newer upgrade of CZX.

quote:

Originally posted by Raven:

quote:

Originally posted by Jessica:
I was so confused when I looked into this thread. I thought Cryptozoic was going out of business and was wondering who or what FTX is. LOL!!

Yeah, sorry. I didn't realize how close that reads.

FTX blowing up is a major scandal though and is very likely to affect all the crypto-currency exchanges. Hopefully people will realize that they are taking real risks when they don't fully understand their investments and allow under-regulated entities to have control over their hard-earned money.

No worries. I never understood crypto currency. My husband has explained it to me over and over again, I get it but I really don't understand why people put real money into it. Kind of like those digital trading cards or the NFTs.

I just don't get it. I guess it is like an internet thing, meaning that someone says it is good (just because they can or feel like it), then another says it, and another, then all of a sudden everyone says it is awesome and buys into it without doing their research.

A coworker's husband put $4,000 into Dogecoin right after the big hype and when it died down (which they really couldn't afford and without asking her, but that is another issue). She was like, "oh it is a good investment". I was just biting my tongue. I just don't get it. She is out that $4,000 now. I don't ever see her getting it back.

Its appeal to its enthusiasts is that it is completely unregulated and therefore provides them yet another method to cheat on their taxes and/or else to purchase suspect goods and services anonymously so no one knows they are buying that stuff.
What could possibly go wrong?

That's a shame and it's because crypto currency was given legitimacy and acceptance when Bitcoin first showed up. People made fortunes on that, but they also got in and got out. That's the key, don't get too greedy and don't stay too long at the Fair.

Ordinary folks putting money they can't afford to lose into uninsured investments having no real world value, maintained by offshore entities with almost no regulatory oversight . . . It's not a question of what will happen, just when it will happen and who's going to get stuck holding it.

To me crypto is basically like buying any foreign currency.

I'm in the US -- buying Crypto to me is a bit like buying Euros or Pounds or Yen. . . Why would I buy Pounds in the US when I can't spend them anywhere in the US?

The difference is that crypto is much more volatile, so the people who are speculating on it now are hoping that whatever crytpo they are buying winds up being used for more mainstream transactions which will drive demand and increase value.

The arguments against crypto are really not different than using cash.

The US Dollar hasn't been backed by anything since going off the gold standard. The government massively created (aka 'printed') money during the pandemic, which is a large contributor to the inflation we are seeing now.

Low value -- i.e. under $10,000 purchases with dollars are also as unregulated as crypto transactions in that you are supposed to report both. I'm not sure if crypto exchanges are forced to report transactions exceeding $10,000 -- I doubt it.

Also purchases with dollars are anonymous. In theory crypto transactions are not as they should be traceable on the blockchain. However identifying the owners of wallets on the blockchain may not be possible.

quote:

Originally posted by chesspieceface:
Its appeal to its enthusiasts is that it is completely unregulated and therefore provides them yet another method to cheat on their taxes and/or else to purchase suspect goods and services anonymously so no one knows they are buying that stuff.

Yeah I think that's what started the attraction too, but then it went mainstream as investments because cryptocurrency got endorsed by the likes of Elon Musk and other gazillionaires. So the guy with $4,000 thinks he'll make a killing too. If crypto had stayed a market for sketchy characters, there wouldn't be scandals with honest people losing money.

I don't even know who made this stuff up. No one truly knows who thought up Bitcoin? Dogecoin was made by software engineers. There are no governments involved. No countries, solvent or not. There was never any legal currency from anywhere behind it all. There is no "backed by the full faith and credit" language to hang your hat on and multiple jurisdictions means no consistent regulations.

In another era this stuff would be the equivalate of selling the Brooklyn Bridge.

I was actually able to buy the Brooklyn Bridge from its owner (a guy who was selling Rolexes on the corner 46th and 9th) for only a thousand bucks. I haven't decided what to do with it yet.