Larry David made a prediction about this week’s crypto meltdown that was prettaaay prettaaay good.
In a Super Bowl ad for the FTX crypto exchange in February, Larry David sarcastically predicted that FTX wasn’t going to make it. The ad shows David’s character throughout history, naysaying humanity’s greatest inventions, including the wheel, the lightbulb, coffee and democracy.
At the end of the ad, David learns about FTX, “a safe and easy way to get into crypto.” A dismissive David says, “Ehhh, I don’t think so. And I’m never wrong about this stuff — never.”
“Don’t be like Larry,” the FTX ad closes.
The ad resurfaced on social media this week after FTX imploded. David’s character was, it turns out, right to be skeptical.
FTX filed for bankruptcy proceedings in the United States on Friday, marking a stunning downfall for one of the biggest and most powerful players in the crypto industry. CEO Sam Bankman-Fried, the 30-year-old founder of the exchange, resigned.
Rival Binance had said it would explore an FTX bailout earlier this week but almost immediately backtracked after the company said FTX was essentially beyond saving.
The full extent of FTX’s financial problems aren’t yet known, but multiple reports say the firm is facing an $8 billion shortfall. Without a quick infusion of equity, Bankman-Fried reportedly told investors Thursday, the firm was facing bankruptcy.
Despite its reputation as a dependable, low-risk investment portal, FTX’s business appears to have been built on a complex, extremely risky kind of leveraged trading.
Customers deposited their money to engage in crypto trading. But it appears that FTX instead took billions of dollars worth of that money and loaned it out to its sister firm, Alameda, to fund those high-risk bets, according to The Wall Street Journal.
CEO Sam Bankman-Fried resigned Friday. He had been one of the faces of the crypto industry, amassing a fortune once totaling $25 billion that has since vanished. He was viewed as the crypto world’s white knight, stepping in to rescue struggling companies earlier this year. FTX, backed by elite investors like BlackRock and Sequoia Capital, rapidly became one of the biggest crypto exchanges in the world.
Regulators are now swirling to investigate what went wrong, and some lawmakers are demanding a crackdown.
– CNN Business’ Matt Egan contributed to this report.
