60 – NFT Wrap, FTX SBF BS continues & the Mango Project hack.

Tracey: [00:00:20] Welcome to the Crypto Curious podcast designed to help you navigate the dynamic world of cryptocurrency. We're here for anyone who is interested in crypto at all. Maybe they're ready to dip your toe in the water. Or maybe you don't know anything about it. And this is a very beginning, but we recommend heading back to the early episodes to get your footing. However, if you think you're ready to dive in headfirst, then let's do it. In this week's episode, Blake gives his inside scoop on Australia's NFT fest, which took place last week in Melbourne, and we discussed the next batch of weird happenings in the NFT saga. My name's Tracey and I'm joined by my pals from the Bamboo App, Australia's finest bachelors, Blake and Craig, who both enjoy long walks along the beach, pina coladas and bull markets. Hi, boys. Welcome. 

Blake: [00:01:05] Hi, Tracey. Doing well. Thanks. Thanks for the intro. Craig, how you doing? 

Craig: [00:01:08] What is this? Is this. This is Tracey. Tracey finding us love. 

Tracey: [00:01:14] The dating is the. 

Craig: [00:01:15] Crypto Podcast you want to watch. 

Blake: [00:01:17] So we. Should. 

Craig: [00:01:18] I don't know how many women are listening to this podcast, but. 

Tracey: [00:01:21] Excuse me there's a lot.

Craig: [00:01:22] there actually are a few I think.

Tracey: [00:01:25] There's a lot as we met at what we call how many women rate the crypto crypto coin there are so many. But I like the idea that you've just put forward a crypto podcast as one to live. Oh, that's gold. But anyway, let's get into it, shall we? Blake is going to give us, as you know, because Blake wasn't with us last week, it was Craig and myself holding the fort. Blake's going to give us a round out of NFT Fest Australia, which happened last week, so let's dive in. Blake, what were your highlights from this two day event? 

Blake: [00:01:56] Yeah, so it was a great event held in St Kilda in Melbourne, Victoria and yeah, all things NFT is a metaverse and there were some really strong themes that came through, particularly all the stuff that the big sport teams have been doing over the last couple of years as well as, you know, the prominence of Dallas and the communities that they're developing around. And if. TS So, you know, what was really apparent was that, you know, some really top end brands like the F1, the NBA and the NFL have all looked to broaden their audience and give them better experiences. And this coincided with COVID and people unable to interact with their sports fans and watch games like they used to. They couldn't go to the games anymore. 

Tracey: [00:02:45] So that's a good point. Yeah. 

Blake: [00:02:46] Yeah, it really created a perfect storm for these organisations to look at new and innovative ways to connect with their audiences. And I think we've seen so many projects come through the pipeline now, really embracing Web3, embracing Nfts, and it's just fascinating to hear their stories. 

Craig: [00:03:05] So obviously there was like those talks were the pay block sponsorships that companies that had sponsorship stalls or was it just more of a, like more of an event level thing? 

Tracey: [00:03:15] Yeah. Who was there? Who was there talking about it on that level? Who is there from sporting is talking about? 

Blake: [00:03:19] Um, yeah, the F1 there was somebody from the NFL, there was someone from Cricket Australia. 

Craig: [00:03:26] Or actually people from their associations. 

Tracey: [00:03:29] Yeah. Okay. 

Blake: [00:03:30] Yeah, that's right. Yeah. They came along and talked about the initiatives that they were working on, how they viewed the sector and, you know, how they were branding it, how they were taking their products to market. And there were some really interesting insights there. You know, many of these groups are not calling them NFT. They're calling them digital collectables to make it more. 

Tracey: [00:03:49] Digital collectables to yeah, yeah.

Blake: [00:03:52] Yeah, to make it more consumable and not, as you know, to remove kind of the barrier to entry. And they're really these organisations that are really focussed on making it as easy as possible for their fan bases to interact with so many of them. You don't have to set up a wallet, you know, it's just a one click thing and you know, you get your NFT emailed to you or it's just in an accounts on their website. So yeah, they're really focussed on the user experience which is important to broaden your use case of the technology. 

Tracey: [00:04:22] Interesting, interesting. What else did you like? What else did you like?

Blake: [00:04:25] Yeah. So there was a massive theme around Dallas and what Dallas are doing for the sector. And have you guys heard of the project called Nouns or the NFT is called nouns. 

Tracey: [00:04:36] Yeah, we love nouns. 

Blake: [00:04:37] I have now. It's an incredible project. Craig and these guys have nfts the auction every day and they on average go for about 30 to 35 aether every day. So almost $100,000 and not anymore. 

Tracey: [00:04:53] No, they're still doing really well. Yeah, they're still doing really well. Really. Yeah. 

Blake: [00:04:56] I think they were doing up to 50 Aether early. In the year. 

Craig: [00:05:00] Jeez. Yeah. 

Tracey: [00:05:01] I love nouns. 

Blake: [00:05:02] And so what happens when you purchase a noun in one of these daily auctions? Is that the if that you buy the noun which goes into the Dow, into the Treasury and they have about 30,000 aether, which makes up about a hundred million Aussie dollars. And then anyone can put up a proposal in the Dow. To utilise this is to further promote the project and those that embody the culture of the community are the ones that tend to get awarded these proposals. And there's a little story I'll just quickly share with you about a girl named Little Purple Blueberry. And she's about 12 years old and she's part of the noun community. And she started off customising other people's nouns like the nef ts, you know, stylising them. And she really embodied the values of the community and she ended up getting voted to the noun ish council. And so she's on the board or on the council of this. She's 12 years old and she's, you know, in part responsible for how, you know, this $100 million of capital gets allocated to perpetuating the Dow. So it's a fascinating example of community. 

Craig: [00:06:15] I think that's what actually Logan Paul did with his 99 originals. I wonder if he stole that from nouns, but I think that's only for holders to participate. So it's good that this is a bit more inclusive. 

Tracey: [00:06:27] I just thought it was pretty cool that you've got the photos of the little 12 year old girl that's missing school up on the stage. That's it. That was pretty cool.

Blake: [00:06:35] Yeah, that's fantastic. So what do you think about that, Tracey? You have kids and how would you feel if your kids were getting involved and participating in a deal like this? 

Tracey: [00:06:45] Well, look, I mean, kids are definitely going to get involved in it. He's like, my boys have got a couple of NFTs and if they can go a little bit further than just collecting them because they like them, then I think that's, you know, I think that's great, especially to have some kind of ownership and to learn something along these lines. As far as, you know, what a dad represents, I think that's really cool. I think it's great. 

Blake: [00:07:06] Yeah. I think we're going to see more and more of these digital communities organising and developing their own cultures and then, you know, creating art to then fund, you know, the purpose or the mission of the organisation, which is it's awesome to watch. But of course, you know, what came at this conversation was a lot of discussion about regulation. As we know, Daos aren't really regulated, they don't really fit nicely into the current regulatory landscape. And as a result, some of these daos have inadvertently broken laws as they operate from raising capital or from doing things or organising in a particular way. And as a result, what we've seen from that is the US government pursuing individual token holders because you know, these deals aren't registered, so they're, they're pursuing the community members. So those that are involved in a, in a Dao and have voted on a project that may or may not be legal, that you could be held liable. 

Tracey: [00:08:12] There's a lot of unknowns so I think we need to maybe even do a separate episode or something to look into. Daos has a lot of different stories. You were telling me that one the other day, Blake, about how Dead Dao had done something a bit dodgy. He'd voted against his own. Dao. 

Craig: [00:08:30] Yeah. Then, he stole all the funds and then made a proposal and then voted. 

Tracey: [00:08:34] Yeah. So there's a lot to unpack with DAO. So potentially we do maybe tack on the end of the news episode, some deep diving into the doubts because it's a little bit to get your head around. 

Blake: [00:08:48] Yeah. So, you know, there's also a lot of discussion at the conference about Metaverse and it was really interesting. Yes. Seeing people hearing people's insights about what the metaverse is. And, you know, people were saying, you know, the metaverse is the Internet we live in. Not saying that we browse. You know, traditionally we browse the Internet and, you know, as we move into the metaverse we will be living in it, you know, and it and in that sense, the metaverse will be like an interface. 

Tracey: [00:09:16] Did they talk about how many metaverses there would be? You know, we're always pulling the pieces about how many there are. Did anyone talk about that fact? The fact that there's so many.

Blake: [00:09:25] I didn't catch anything along those lines, but I'm sure there would have been some conversations about that. 

Tracey: [00:09:31] But they're all positive about the middle version. 

Blake: [00:09:33] Yeah. Everyone had their own take on it. You know, what's going to work, what's not. But I think the general consensus is that, you know, it's an ever evolving space and, you know, it's just going to grow and grow. 

Tracey: [00:09:44] Yeah. But overall, the presentation of the festival was bang on. I saw a lot of social media talk about how great it was. And from the look of it, you know, it looked really well presented and everyone seemed to be having a great time.

Craig: [00:09:57] So it was this sponsor. Ship stalls at Blake. 

Tracey: [00:10:01] Didn't look like. 

Blake: [00:10:01] It wasn't really a sponsorship store. But I you know the nouns they sponsored the event I saw Penfolds they were also a sponsor so they're definitely Penfolds Wines. Wines. So they're doing something in the sector. And there are many other smaller sponsors, including Coyne Sports as well again. 

Tracey: [00:10:21] Yeah, and there were some other really good talks that I saw on LinkedIn and places like that. So I think and obviously those who listen to us regularly, we had Greg on a few weeks ago who was the organiser and I know that he seemed to be pretty happy with how everything went. So, you know, kudos to those guys and hopefully I'm sure it will happen again next year. We'll hopefully get along and it'll be bigger and better with lots more guests and a lot more going on. And hopefully the market's turned around a bit more. 

Craig: [00:10:48] True. 

Tracey: [00:10:49] Next year. So we'll see. But thank you, Blake, for the recap. And if anyone else did get along that wants to point out anything that they thought was cool and shoot us an email. But let's get into some news. The last seven days, actually, no, it was the last three days because everyone knows we dropped an episode Monday and we're moving to Wednesdays. So this is really the last news, the last three days or four days since we last recorded this next story. I'm titling Bit Boy in the Bahamas on a mission to confront SBF, and I'm going to hand over to Craig here because he knows a bit more about what's going on because I actually haven't kept up with this one. What is boy doing in the Bahamas? Craig, tell us his story. 

Craig: [00:11:33] Yeah, so bit boy, very controversial, I'd say crypto influencer. He has a million followers on Twitter. I think he has over a million on YouTube. So he's a guy that some of the OG think he's a bit of a Shilla. Anyway, let's go into Big Boy, but Big Boy, he is sick of the week journalism from the New York Times, and he's actually flown himself down to the Bahamas and he's videoing himself carrying on with Sam's car at Sam's apartment. So he's actually like in the Bahamas, if you get the chance to go to his Twitter, have a look. But actually breaking news, Tracey Sam has actually agreed to join a Twitter space and has been beat boy so this is going to break Twitter.

Tracey: [00:12:18] Feed or rejoin. 

Craig: [00:12:20] Yeah so he just tweets SBF and I agreed to do it. Twitter space is within the next two weeks. He's unblocked me on Twitter. So you can confirm we have spoken. I look forward to getting the answers for the community that must move forward. So a very interesting development in the FTX's site. 

Tracey: [00:12:37] I see. I heard it first. Breaking news. 

Blake: [00:12:40] Yeah, gorilla gorilla journalism at its finest Craig. 

Tracey: [00:12:44] A bit boy and SBF that is going to be thrilling but onto our next bit of news and this one is still on the SBF saga, but this one is really interesting and we've spoken about this briefly, the three of us, but let's dig into it a little bit more. FDA has bought a bank and this was a while ago. FTX invested 11.5 million in the parent company of the farming state bank through a subsidiary. This is what we know. The bank was the 26 smallest banks in the US and it only had three employees. So when it invested this 11 million, it only owned 10% of the bank. But the valuation of the bank then went up to over 100 million. So this bank didn't even offer credit cards before and it was just, like I said, a really small bank. We don't actually know how it got approved by federal regulators because to buy a bank you need licencing to do so. But they're speculating that this is something to do with getting a banking licence to be able to do some kind of crypto banking in the future. Is that correct? 

Craig: [00:13:49] I think the issue here was it was sort of low key because I mean, there's a famous chart of all the subsidised subsidiaries and there's like 30 of them. 

Blake: [00:13:58] 130 of them. 

Craig: [00:13:59] 130 of them.

Blake: [00:14:01] There's 130 subsidiaries of FTX. Yep.

Craig: [00:14:04] Yeah. So one of them bought FTX and I think some eagle eyed people have now figured it out. But I guess one of the issues here is obviously there's a licencing thing that you touched on trace, but also. You know, I don't. Making accusations. This is what I. But I'll go ahead and do it. But sort of the commentary in the media saying, you know, FTX using this. It's called Farmington Bank for some sort of shady money laundering scheme because before the investment, the deposits were at ten mil. And then in the third quarter of this year, the deposits were 600% more at 84 mil. So that is some pretty good performance from the bank, but also ties in deeper because this bank apparently has ties to Tether Bitfinex and the parent company Deltec is based in the Bahamas. So I think this runs really deep about what's actually gone on here. And, you know, we've seen it already with SBF donations and how he's been covered. And I think it's just going to be that these things are just going to keep coming out for a long time. 

Tracey: [00:15:08] What are your thoughts here? Blank. I can't take you seriously. Those glasses on, by the way, I've taken a screengrab, by the way, for our listeners of Blake in his announced glasses. I'm going to put it in our Facebook group. So if you're not in their head to the Facebook group to see a photo of Blake, it is the noun glass that he got from NFT fest back to farmington. What are your thoughts around Farmington? 

Blake: [00:15:29] Well, you know, I think it's prudent for a crypto company to build good relationships with the banking sector because, you know, all too often we've seen here in Australia and in other countries, crypto companies often get deep banked because of regulatory pressure. Right. So, you know, this could have just been a hedge for them to, you know, ensure that, you know, if one of their banking channels went down, then, you know, potentially they had another one available to them. But yeah, who knows what else they used for, you know, I think there'll be more that comes out around this story in the coming weeks and months. 

Tracey: [00:16:03] Moving on to our next story, a hacker has stolen 100 million from crypto Project Mango. Just how did it go down? I'm going to leave Blake to explain that because he knows the long and the short of it. And that's actually a bit of a pun because it's to do with longs and shorts. So, Blake, how did this work? 

Blake: [00:16:22] Yeah. So there was a hack on this project called Mango Dao, which had a platform for doing decentralised trading on cryptocurrencies and using leverage. And someone hacked the Dow for over $100 million. So they've done pretty well out of that one. Then he said to the community, to the Dow members, you know, I'll give you half of the money back or a portion of the money back. If you say that, you know, this wasn't a hack, this was, you know, a great hack and, you know, it was a bug bounty. And you guys pay me, you know, the difference of whatever I give back. And, you know, he put some money or he put this up as a proposal in the Doa. And because he held all the tokens in the mango tokens or whatever they're called, he voted the proposal through. So then the Dow couldn't prosecute him or file charges against him. Who knows if they would have done that anyway. But we have this interesting situation now where, you know, somebody is really taken advantage of, you know, the dynamics of how it operates by stealing all this cash and potentially getting off scot free. 

Tracey: [00:17:34] So that's how it happened. 

Craig: [00:17:35] Yeah, well, this actually happened about a month ago. And so the proposal that Blake just mentioned, that's only just happened. So he's taking a bit of a clip on the ticker on the funds as yeah. As a bug. And I mean, when you think of it like that, a hacker either takes it all or. Yeah. John I mean, so this is another risk with defi protocols and if you Google defi protocol exploits, you know, bridges, these guys decentralised exchanges, they're all massive targets because at the end of the day, oh, trust in code, not humans. So saying. SBF Humans are greedy mangoes. Sometimes the code isn't isn't foolproof. 

Tracey: [00:18:16] As secure as you would like it to be. 

Craig: [00:18:18] Isn't secure. Yeah, exactly. Right. 

Blake: [00:18:21] So yeah, it really reminds me of your bank robberies back in the Midwest in the 17 and 1800s. And I feel it's the modern day version of that. You know, these hackers are going in and looking for as much cash as they can get. Yeah, I. 

Tracey: [00:18:37] Know. And they can all do it and be semi kind of anonymous as well sitting behind a screen or I think on with our short, sharp news bytes for this week as well. And I'll go first. As suspected, Blockfi filed for bankruptcy as the contagion spread. So Blockfi filed bankruptcy just days after suspending withdrawals last week. FTX had extended a 400 million line of credit to this lender earlier in the year. So again, notice no surprises here. We thought this one would play out as it has. 

Craig: [00:19:13] Thank you, Tracey. That is no surprise, but. Look for it in the bin. I don't know if they're available in Australia. That's I hope none of our listeners were impacted. They were not. Okay, good. And if these are dead. Well, that's maybe not a question mark on that one, because a gold and fur board ape, which I love, has now sold for just under 1,000,000 USD, so over a million Aussie. So there are some big purchases being made. I saw zombie cryptopunks as well. So there is still some action going on in Thailand. 

Blake: [00:19:47] Yeah. This museum from the Solana Foundation that they lost over $180 million of crypto on FTX. Now FTX was a big proponent of the Solana project and led maybe even led one of their capital raising rounds early on. And as a result, there was a strong relationship there between the two groups. And of course, Solana would have used FTX for liquidity for different purposes and now, you know, unfortunately have lost a chunk of their treasuries. So I don't know how much was in the Treasury, but, you know, 180 mil is no short change. So hopefully they recover from this one. 

Tracey: [00:20:27] So crypto exchange Kraken has settled a case with the US Treasury over serving customers in Iran. Kraken has agreed to pay 362,000 to settle its potential liability for violating US sanctions. So not a big one. They're just more of a little slap on the wrist. Kraken who are having. 

Craig: [00:20:46] And we are actually reversing Iran, a nation they have sanctions on in the World Cup, which would be and the winner will go through the group stage. So that would be an interesting match. 

Tracey: [00:20:55] Sneak in a bit of the World Cup in there. 

Craig: [00:20:57] Bit of World Cup and a bit of politics as well. So crypto exchange Binance tries to add another billion to the secure asset fund for users Go. 

Tracey: [00:21:09] Binance. It's. Your birthday. 

Craig: [00:21:11] What do you call it? Portfolio some portfolio. So me and BlackBerry actually go on to a Binance denial tomorrow, apparently. And they're going to talk about some digressing here talking about the challenges that we face. So we'll come back to you guys with Binance and you. 

Tracey: [00:21:25] We're going to and Ceesay was going to be there but he has. 

Craig: [00:21:28] He was going to be there but he's clearly a bit busy. He's been talking shit on Twitter, then. 

Tracey: [00:21:33] He's been made to stay in his bedroom. He's been naughty boy and just the other guys and Binance will be there but look good on them. 1 billion is now 2 billion for this fund and they've got dirt. 

Craig: [00:21:42] So it's a little bit controversial though, because it's held in BNB, USD and BTC and a lot of the commentary on Twitter is around was it held in BnB because you can't sell it without crashing the price. 

Tracey: [00:21:55] Right, right, right. Yeah. 

Craig: [00:21:57] Yeah. 

Tracey: [00:21:57] Yeah, yeah. And it's not just Binance. So we've got Simon Dixon who jumped on like literally the second season, said he was doing this. Simon Dixon from bank to future got on and said, Look, I'm into this. What's his name? Son from Tron. But anyway, he's involved there as well. So good on them, three of them. And there's probably a few more there's. 

Blake: [00:22:15] A few more well-known hedge funds and investment funds that have come on board to join the fund. And they'll be looking to help prop up some of the affected parties from the optics saga. So they're doing a great thing, I think. And many great businesses are going to be recipients of some of this cash. So, yeah, looking forward to seeing how that is deployed in the coming months.

Tracey: [00:22:40] And that's it guys, for another week in crypto news, all three days as it has been. So join us again and remember we're coming out in Wednesday's now with the very very up to date and on the pulse crypto news so please join us next week. Keep the questions coming via email at podcast@getbamboo.io. Follow us on social media and in the Facebook group. Don't forget to rate and review us. Wherever you are listening to your podcast, please tell your friends about us so they can come along this journey with us. So listen to us next time. Bye for now. 

Craig: [00:23:13] See you guys.