Ever since the FTX story broke, I have had two recurring thoug. This energy companyrace reminds me of Enron, the energy company that wanted to make markets in everything — especially in gullibility. I wrote about their remarkable similarities in my piece for The Spectator, which is a new outlet where I have recently become a contributor.  

In my piece, I wrote:

“Tiger Global, Sequoia Capital, Softbank, Lightspeed, Temasek, Blackrock and others invested over a billion in the company which at one time was valued at $32 billion. FTX and Alameda Research’s intermingled ownership should have raised eyebrows, but history shows greed trumps diligence.”

According to media reports, Sequoia wrote off its entire $213.5 million investment in the company. The question is not just Sequoia, but how did all these giants of risk capitalism not notice the most basic of all risks? They aren’t alone: FTX investor is a who’s who of Silicon Valley and technology investing.

And no, I don’t include SoftBank in that list. The Vision Fund might as well rename itself a “vision less” fund, for they have shown a great propensity for losing a lot of other people’s money. The other investors, however, did surprise me. Paradigm is likely going to lose its $278 million investment. And they were the crypto experts. So many of the crypto insiders I have spoken to have nothing kind to say about SBF and aren’t surprised that a strong puff of wind (Read more...)