Jordan Belfort, otherwise known as the original Wolf of Wall Street, is giving his view on what he thinks happened behind closed doors at the bankrupt crypto exchange FTX.
In a new Fox Business interview, Belfort says it’s a misconception that FTX is a crypto exchange.
“It’s not an exchange. It’s like a brokerage firm or a bank that was holding customers’ money, and they were basically siphoning it off. He was using it as his own personal piggy bank, Sam Bankman-Fried. People deposited their money in FTX because they want to trade, like any brokerage firm. It would be the equivalent of going to JPMorgan Chase, deposit your money in your Chase bank account and then you find out that actually [JPMorgan CEO] Jamie Dimon has been taking your money personally and going to Las Vegas and gambling on the weekends because your money, his money – what’s the difference?
That was what was really happening. He was using all of these funds that people were depositing in the brokerage firm, FTX, and using it as his own personal piggy bank. They bought condos, whatever else they bought. They were gambling on wild derivative trading, so they were leveraging to the hilt. It had to end badly.”
As to whether FTX investors will ever get their money back, Belfort says it is unlikely that the company will make everyone whole.
“I strongly doubt that there’s a lot of money here to be gotten back. If you’re leveraging the way they were leveraging, it’s really easy to take these huge losses. I don’t think they were very good traders, by the way.”
Belfort concludes that FTX was formed to fund Alameda Research, the crypto exchange’s quant trading arm.
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