Updated: Jun 7
As many of you already know, The U.S. government just indicted Samuel Bankman-Fried, the founder and former CEO of leading crypto exchange FTX, for a series of financial crimes involving the siphoning off of billions of dollars of customer funds. SBF, as he is widely known, caught both the crypto and traditional financial world by surprise. This indictment and the accompanying revelations have only added fuel to the dumpster fire that has been the 2022 crypto market.
I have been following this story closely, watching hour by hour as a volcano of sordid details spews from news outlets like hot liquid diarrhea. Every new spewing seems to be worse than the last. Because of this fiasco, I've taken to a new habit of yelling kosher expletives at Youtube. "What?!" "How!?" "If I ever see SBF in the streets I'll punch him in the nuts!" Why am I so angry, you might ask?
I've been involved with crypto since around 2017, when the run up to mainstream coverage for the nascent industry was just hitting its stride. Interestingly, I had known about crypto since around 2010, just a year after the illusive Satoshi Nakamoto wrote "thee" whitepaper. I read about it my favorite magazine, Wired, and I remember thinking about how exciting it all seemed. I also clearly recall thinking that it was "too late" for me to get in. Boy was I wrong! But...that's a different story for a different day.
During 2017, I was a full-fledged participant in the wild crypto bull run that saw Bitcoin and other cryptocurrencies skyrocket thousands of percentage points. I was like a kid when you get your first bike and realize that you can go anywhere now. I bought Bitcoin, I bought Ethereum, I bought Cardano, I bought Solana, I bought Shib, I didn't buy Ripple because it was too hard to get. I bought Open Sea's second most favorited NFT (a rotating golden ape head which I am still very proud of). It was thrilling, it was confusing, it was scary, it was on everyone's lips it seemed.
Some of my friends and colleagues went from being "thousandaires" to being multimillionaires within months. One of my friends took $10,000 and turned it into $10 Million within about 3 years. I was hooked, line and sinker. I was metaphorically and physically hanging off the edge of my seat on a daily basis watching my balances go way up, then down a bit, then up and then up and up and up. Myself and millions of other people just like me thought, in a few months, I might just replace Elon as the world's most interesting person.
Then came the first crypto winter most of us had ever really experienced. Suddenly, around the new year, the numbers and the charts started dropping off like a giant had suddenly started flushing all our money down some nightmarish invention that was part black hole and part toilet. Even though I knew better, I sold everything except my monkey head. I even sold my Shib dust. At the time, I was becoming burnt out with Weedash (my company at the time), and I figured I could use the cash to coast for a while and then invest in something else when the time was right.
Fast forward five years and a pandemic later, and I find myself in the same cycle, but this time with a much bigger stake. I founded a crypto company, Crypto Labs LLC. I started my own projects and roadmaps and grabbed up every "Yacht Club" username on Open Sea known to God or man (I'm proud to say I'm Jean Michel Basquiat and many other notable artists on the platform). I minted hundreds of NFTs from the Met public domain image library as world firsts. I played in Decentraland for hours and talked to strangers. I bought Mana and scoped virtual land plots for a few weeks. I even learned how to code just so that I could get my SPL tokens named and verified on the Solana json list.
I'm not going to say how much but let's just say I invested an extraordinary and probably reckless amount of money into Bitcoin mining machines with Compass Mining last year in the middle of the bull run. I worked out the math and I would be making more than six figures after taxes doing absolutely nothing. My brain was a movie which said "Soon I will just sit back, relax, and have some Micheladas with some guy who looks like Jason Mamoa. Life is good. Thank God for Satoshi you weird bastard. Even though I know you're probably really just the CIA." Boy was I wrong. Again.
Well, let me clarify. It's not that I was wrong. It's that my time horizon needed to stretch. All of the publications I read and financial experts I follow told me just that multiple times. People like the Bitcoin evangelist Michael Saylor and macro god Raoul Pal have said countless times to just buy and hold. When that metaphorical giant with the money toilet started flushing again this year, I cognitively knew just to hang on tight. But what I didn't forecast was my level of physical and mental exhaustion from the whole scene. It's been more than five years now for me of wild ups and downs. And I'm just tired.
I didn't forsee that I was going to be experiencing another round of burnout at the same time as the crash and SBF's dumpster fire. I begrudgingly sold most of my mining machines at a fraction of what they cost me, to use the money to live off of while recalibrating my life trajectory. I quit my teaching jobs in California and moved to Texas. I took myself completely off the dating scene. I learned how to use "do not disturb" on my phone more frequently. I keep taking off then putting back on "CEO of Crypto Labs" on my social media bios.
Having a few months of sabbatical allowed me to zoom out on a lot of things crypto related and otherwise. With the FTX scandal I can see something that is common not just in crypto but in any business: the incredible psychological pressure to rob the golden goose. It's the archetypal story of Gollum and the ring in Lord of the Rings. It's the story of Icharus. I see in SBF myself and all of us in a way. He, too, was caught up in the excitement and the hype. So much so that he began to believe that he could defraud millions of people and fool US intelligence agencies.
I do believe that SBF and his wacky girlfriend knew what they were doing and they knew it was both ethically wrong as well as illegal. But with a huge pot of gold sitting in their living room and eyeballing it daily, with the fact that there is not yet substantial regulations for crypto companies, and with the commonality of truly spectacular bull runs in the space, they thought it was all going to work out somehow. So did all of us, and so have all of us multiple times.
The Challenge in Not Commingling as a Crypto CEO but just as a regular person is keeping an even keel emotionally and not betting on an everlasting bull run. As GOT says "Winter is coming." Winter is always coming for crypto, and we have to constantly remind ourselves not only of the fact that the runs cycle, but that just because there is no comprehensive regulatory framework for crypto in particular, we still live in the US and there are still general laws regarding finance and consumer protections no matter what industry you're company is in.
Let us all take a moment of silence and reflect that from now on, we must let the golden goose sit and roost without stealing her eggs before they hatch. As Buffett heeds "Buy and never sell." And if you're a crypto CEO, build and don't commingle.