The demise of FTX and the arrest of its founder is part of the broader demise of crypto. After so much optimism in late 2021/early 2022, entire industries and careers have been gutted over the past year. Coinbase stock down from $340 to $38. MicroStrategy down from $600 to $180. Bitcoin down from $50k to $17k, and still falling. Ark Investments from $140 to $35. Grayscale’s Bitcoin fund, GBTC, from $40 to $8. NFTs, down more than 90% or totally worthless. Bitcoin tried to recover to $18k a few days ago, but I didn’t need to write a post about it because I knew it would fall, and sure enough it did. People who I occasionally follow on Twitter and other social media, have gone dark or are posting much less frequently compared to a year ago. I don’t think I have witnessed such a thorough drubbing of an asset class like I have seen with crypto over the past year. Way worse than the housing crash of 2007-2009, but no systemic risk.
I was correct in predicting last week that Sam Bankman-Fried would be indicted. It seemed obvious enough that I hardly consider it a big win on my part, but some people were apparently convinced enough that his donor-connections would somehow get him off the hook. I don’t know how that would work when he was so obviously guilty, but not only that, of no use to the ruling class with his wealth and reputation having been destroyed. This is the beginning: He still need to be extradited, arraigned, stand trial (or plead guilty), and then finally sentenced. All of this will take years, especially if there is a trial.
Reading the official indictment, to be honest, it could have been worse for him. He faces 8 counts, but only two of them are very serious, those being the wire fraud charges, which each carry a maximum of 20 years. The conspiracy charges only carry 5 years each. At the discretion of the judge, likely the conspiracy charges will run concurrently with one of the wire fraud charges. I think he will be sentenced to no more than 20 years, which would be ‘good’ compared to other examples. By comparison, Allen Stanford was convicted on 13 of 14 counts, earning him a 110-year sentence. Or Madoff, who was charged on 11 counts, earning him 150 years.
Musk vs. Journalists
The reason is for tweeting links to the plane-tracking website. Even if you disagree with the bans, to say it is without reason or explanation is clearly false.
Elon continues to exert complete dominance and control over Twitter, as I predicted would happen. There is no ‘delicate balance of power’ as others were predicting. When he strolled unnanounced into the Twitter headquarters two months ago, he meant it when he said, ‘Let that sink in.’ He’s calling the shots, banning journalists and competitor Mastodon, related to the alleged doxing of the location of his private jet.
[Apparently Elon has backtracked to some degree, and may unban the accounts after 7 days, or sooner.]
I don’t think this will hurt Twitter at all. Journalists are not important to Twitter, even though Twitter is very important to journalists. Journalists and journalism tends to get terrible engagement compared to other niches. For example, the official @nytimes account has 54.7 million followers, yet its tweets only get anywhere between 50-200 ‘likes’. On the other hand, Kanye West would routinely get tens of thousands of likes/tweet despite having far fewer followers. Journalists have a vastly inflated sense of their importance and usefulness as far as online discourse is concerned. Most of what is called journalism is really just opinion and bias.
Advertisers are not going to defect either. Advertisers don’t care if journalists are banned.
Mastodon’s users should be happy that Mastodon links are banned from Twitter, given that Mastodon is supposed to be superior, right. Why should they care if Mastodon is banned. It’s like Mastodon is supposed to better than Twitter, yet the most only newsworthy thing about Mastodon is being banned from Twitter.