Crypto Scoundrels: Debauchery, Downfall & Dungeons—The Post-Winter Edition 😈💰

What a frosty year was 2022! The crypto aristocracy, having always styled themselves as visionaries, suddenly found their fortunes melting faster than an ice sculpture in a Victorian greenhouse. Billions evaporated. The industry, much like a well-dressed dandy after midnight, teetered tiptoe on the brink.

Those bold architects of digital misfortune? Well, they now savor the aroma of prison porridge, contemplate the beauty of cement walls, and compose letters to bank creditors with a melancholy reminiscent of exiled poets. Debt, like bad poetry, lingers.

A Winter Colder than a Banker’s Heart

When the crypto frost arrived in 2022, it did so with the subtlety of a sledgehammer in a glasshouse. Factors abounded: Inflation soared to the level of upper-class egos, interest rates attempted gymnastics, and recession fears danced a macabre waltz across the globe.

The battered economy wasn’t alone in its misery. Crypto insiders staged their own farce: FTX and Terra-Luna toppled with such flair, Three Arrows Capital defaulted with panache, and crypto lending platforms performed bankruptcy rituals that would make even Wilde’s creditors blush.

Figured I’d dust off some lesser known facts about SBF given today is his sentencing

1. In January ’22, Sam market sold $75M of stETH, leading to a massive depeg event which set off the Celsius bankrun and the daisy chain of events that included the blow-up of 3AC

— Conor (@jconorgrogan) March 28, 2024

Thanks to their spectacular flame-outs, Sam Bankman-Fried, Caroline Ellison, Do Kwon and Alex Mashinsky have now achieved a level of notoriety usually reserved for scandalous debutantes and mischievous vicars. 📉

Three years onward, crypto has staged a recovery the way an ill-bred relative recovers from embarrassment: Denial, optimism, and a new hat. But the villains? Still mired in consequences, darling. So where are these charlatans now?

Sam Bankman-Fried (FTX Exchange)

Mr. Bankman-Fried, once the pious prophet of altcoin pulchritude, now finds himself serving a 25-year sentence in California. Should his prison manners improve, rumor has it the authorities may let him out a few years prior—provided he teaches good conduct classes to the inmates or perhaps organizes a charity chess tournament.

Convicted of fraud and conspiracy (so dreadfully vulgar, but terribly practical), Mr. SBF orchestrated a scheme so convoluted, even Wilde’s Bunburying would seem honest by comparison. FTX, now in the closing chapters of its bankruptcy drama, recovered $14.5 billion—proving the only magic trick greater than the vanishing act is the forced reappearance, with interest.

Caroline Ellison (Alameda Research)

Ms. Ellison, who once captained Alameda Research with a philosopher’s bravado and a gambler’s luck, currently resides at a low-security institution in Connecticut—less gilded drawing room, more fluorescent hospitality. She charmed the authorities with her sincerity and a rather damning testimony against SBF, earning herself a two-year sentence and a fragrant reduction to boot.

Alameda, recipient of FTX’s misappropriated largesse, was the pit where fortune went to perish. Now, like an unsuccessful playwright, its only assets are footnotes in bankruptcy ledgers.

Do Kwon (Terraform Labs)

The fascinating Mr. Kwon, dealer in algorithmic daydreams, waits in limbo after the Terra-Luna disaster cheerfully vacuumed up as much as $60 billion—a sum even Wilde would find excessive for a theatrical flop. Arrested in Montenegro (so continental!), Kwon was extradited to America, where he now faces a cast of charges impressive enough to fill a West End playbill. He pleads—charmingly—not guilty.

The SEC banished him from the financial stage, and Terraform Labs is being liquidated—liabilities being the only thing spreading faster than a London rumor.

Alex Mashinsky (Celsius)

Ah, Mr. Mashinsky. With promises as tall as the columns of St. Paul’s, Alex presided over Celsius’s collapse with the serenity of a man offering umbrellas in a drought. Later he was found guilty—or, as he might say, “artistically misunderstood”—of fraud, netting himself a 12-year sojourn courtesy of federal hospitality, several million lighter in the pockets (the horror!), and a supervised release to boot.

Celsius investors now hold partial ownership of a Bitcoin mining remnant—with all the glamour of panning for gold in a hotel fountain—and chase Tether in court for billions, proving hope is indeed the last thing to go bankrupt.

Su Zhu and Kyle Davies (Three Arrows Capital)

Messrs. Zhu and Davies: the Laurel and Hardy of leverage. Having single-handedly attempted to turn reckless speculation into a respectable science, they instead managed, in true Wildean style, to lose other people’s money with enough drama to fill a serialized novel. Zhu took a brief sabbatical in a Singaporean jail; Davies, ever elusive, continues to evade liquidators, perhaps hiding behind a potted palm in a discreet hotel lobby.

3AC’s collapse was the domino that tipped the entire topiary garden. Liquidators now scramble about with all the dignity and success of a footman at a fire drill, trying to recoup $3.5 billion—a number so large even Oscar’s creditors might have swooned.

Thus ends our brisk tramp through the snow-strewn graveyard of crypto’s finest. Society recovers, fortunes change, but, as Wilde once said, “The only thing one can do with good advice is to pass it on. It is never of any use to oneself.” Rather like most crypto tokens.

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2025-07-05 23:32