Bloomberg Crypto – Details, episodes & analysis

Coming soon: When nerdy gamer Sam Bankman-Fried rocketed to fame as the world’s richest 29-year-old, he pledged to donate his billions to good causes. But then his crypto exchange FTX collapsed Billions of dollars were missing, and Sam was in handcuffs. Those who knew him were left wondering — who was Sam really? A well-meaning billionaire who made a mistake? Or a calculating con man? From Wondery and Bloomberg, the makers of The Shrink Next Door, comes a new story of incredible wealth, betrayal and what happens when “doing good” goes really really bad. Learn more here: https://podcasts.apple.com/us/podcast/spellcaster-the-fall-of-sam-bankman-fried/id1685258534

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It’s been another wild week of financial mayhem connected to crypto. But this time the crisis focused on banks. 

It started earlier this month [March], when Silvergate Capital shut down operations. The California-based bank serviced various crypto companies like Coinbase and Gemini. But its most notorious clients included the now-bankrupt crypto exchange FTX and its sister firm Alameda. As these two giants faltered, Silvergate suffered a series of financial difficulties and fell under intense regulatory scrutiny, leading to its eventual shut down.  

Then, last Friday, one week ago now,  the tech and startup-focused Silicon Valley Bank collapsed. It was the largest bank failure since 2008, and incited investor panic.

By late last Sunday, another domino had fallen: New York State regulators announced they were taking possession of Signature Bank. It was moving to retreat from crypto, but was still known for having some ties to the digital asset industry, at one point even launching a crypto-payments platform. This was the third-largest bank failure in the US to date. Bloomberg reported that regulators took action after they “lost faith in management.”

This trio of recent closures is another blow to crypto - leaving the industry nearly cut off from the fiat banking sector. All the while a Bitcoin rally ensued, but has since cooled a bit.

So. In the aftermath of one of the biggest weeks in finance so far this year, how has the crypto industry fared? And how does it move forward? 

Bloomberg senior executive editor Chris Nagi joins this episode.

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Subscribe to the Bloomberg Crypto Newsletter at https://bloom.bg/cryptonewsletter 

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It’s been three months since one of the most influential crypto exchanges collapsed into bankruptcy. FTX’s demise brought with it a wave of financial uncertainty and distress in the crypto industry. But it also had an effect on the small islands where the crypto exchange had established its headquarters: the island nation of the Bahamas.

This is not the Caribbean’s first financial crisis. History suggests it won’t be the last. But it is perhaps one of the highest profile losses, and potentially the most damaging. It comes as islands in the region try to diversify away from tourism revenue. 

The Bahamas had high hopes that an ambitious financial sector would achieve that. But crypto was a big part of that game plan, and now it’s gone.

Can the Bahamas fill the gap left in its financial sector? Can the nation still be a hub for digital assets? Bloomberg’s Katanga Johnson joins this episode.

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The equivalent of an earthquake jolted the crypto world this week:  Binance, the world’s largest cryptocurrency exchange, announced and then quickly reversed a proposal to buy out rival exchange FTX, which was reportedly facing a liquidity crisis and on the brink of collapse.  

The companies are each owned by two of the most well known CEOs in crypto: Sam Bankman-Fried at FTX, who has been touted as crypto’s version of legendary banker J.P. Morgan, and Binance CEO Changpeng Zhao, known as  “CZ.” 

Meanwhile, Bloomberg reported that US authorities, including the Securities and Exchange Commission, are reviewing FTX for improper use of customer funds. Bloomberg’s senior crypto editor Philip Lagerkranser updates this moving story with fellow Bloomberg senior crypto editor Anna Irrera in this episode.

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One of the core fundamentals that personifies the Bloomberg newsroom is its commitment to data. As part of that commitment, the Markets Live team does a weekly investor survey, asking questions about different elements of financial markets. It’s called the MLIV Pulse Survey - because it’s the Markets Live team taking the pulse of financial markets. In October, the team asked investors for their opinions about crypto. 

On this episode, Bloomberg senior editor Kasia Klimasinska with the Markets Live team explains the survey’s results, joined by Bloomberg reporter Vildana Hajric.

Editor’s Note: This episode is about a Bloomberg survey of investor sentiment relating to crypto. We collected the survey results before FTX revealed it was facing significant financial difficulties, triggering a market downturn.

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Evangelists of web3 - a term popularized by venture capitalist Chris Dixon - will often say that a big goal of the whole thing is giving more power to creators, and especially monetary power.

Web3, these proponents say, allows artists, musicians, and creators of all stripes to cut out middlemen and intermediaries and to retain more of the financial benefits of their work. In other words, why pay a platform or an agent when you can keep all your royalties yourself?

That’s where things get complicated. If you’re a musician or an artist and you sell your work as an NFT, you’ll definitely get paid the first time you sell that song or piece of art. But what happens if the person who bought it sells it to someone else? In the idealized world of web3, you’d get a royalty on that sale - automatically. In reality, most of these transactions aren’t setup that way.

For more on the current state of NFTs, and how platforms are thinking about royalties, Bloomberg crypto reporter Olga Kharif and Lauren van Haaften Schick join this episode. Lauren is an Andrew W. Mellon Postdoctoral Fellow at Wesleyan University’s Center for the Humanities.

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One of the bigger fights in crypto right now is over the definition of a security - what counts as a security, and who gets to decide - and therefore regulate - that. This isn’t just about semantics: the answer to that question affects trillions of dollars of assets in the United States, including crypto assets.

In December 2020, the SEC accused Ripple Labs, issuers of the Ripple token, of having conducted “an unregistered, ongoing digital asset securities offering that raised $1.3bn.

Nearly two years later, that fight is still ongoing. Most recently, Ripple asked the court involved to dismiss the SEC’s complaint. Among other things, Ripple does not agree with the SEC’s assertion that its token counts as a security. 

Who’s right? And what are the consequences, either way?  Bloomberg reporters Matt Robinson and Chris Dolmetsch and attorney Elizabeth Davis join this episode to explain.

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Given how the crypto industry feels about fast cars and men with big personalities, it’s perhaps no surprise that crypto is emerging as one of the biggest sponsors of Formula 1. Formula One racing is marketed as being all about competition that rewards instinct, speed, engineering innovation, and sheer adrenaline. Companies ranging from FTX to Crypto.com have spent millions of dollars on flashy deals. 

Around 80% of F1 teams have at least one crypto partner. Crypto.com even has a $100 million deal with the Formula One Group itself.  But in this current market environment, how long can crypto firms keep splashing the cash?

In this episode, Bloomberg senior editor Anna Irrera and Bloomberg crypto blogger Emily Nicolle discuss the future of crypto’s fast car sponsorships.

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Listen to the second audio excerpt from this week's special issue of Businessweek magazine, The Crypto Story.

Bloomberg columnist Matt Levine uses the full issue to explain where crypto came from, what it means and why it matters.

This episode is voice by Bloomberg Businessweek editor Mark Leydorf.

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Our colleagues on QuickTake, Tim Stenovec and Katie Greifeld, host a weekly video series called QuickTake IRL - In Real Life. Just for listeners of the Bloomberg Crypto podcast, we've got an audio version of their latest episode.  Enjoy!

Find the full video experience of the shows here.

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