SBF's crypto bailout, Zendesk sells for ~$10B, buyout targets, US diplomacy, AlphaFold & more

The recording starts with a few hosts trading jabs about who will do the introductions. One says that anyone slow-rolling the job to gain leverage should not bother, and another jokes that doing a few bad ones might get a person removed from the show. The banter is light and has no argument in it.

A sung-style rhyme then welcomes each host in turn. It teases one for his crypto holdings and for flying commercial, notes that another's ratings beat a rival show's, and describes a third as holed up in Italy while the market sinks. The jokes about ratings and holdings are the speakers' own claims and are not checked here.

One host says he surveyed listeners about covering controversial subjects such as Roe v. Wade, January 6th and Ukraine. By his account the result was an even split, about half wanting these topics and half not.

Another speaker questions the practice. When the show began, the hosts simply discussed what they found interesting, and polling listeners risks turning the show into a feedback-driven media company. The host who ran the survey agrees it should not set the agenda, describing it as a quick way to gather feedback, though he does ask for ideas each week. A second voice adds that the original approach was to be intellectually honest with one another, and that a topic vote is not something to follow.

The conversation turns to goals. One speaker asks whether the aim should be to grow the audience or to discuss what the hosts want to discuss. A reply says an audience matters, since otherwise there is no point, and that most topics will probably split listeners the way the survey did. The same speaker claims that 80 to 90 percent of listeners want markets and startups, which is an estimate and not sourced data.

A counterpoint warns that a pure audience-maximizing objective ends with something like a video of people twerking, which is not the show. The remark prompts a joke about a clip of one host dancing at the All-In Summit. The host then moves the discussion to crypto, saying people want to hear about it.

The host introducing the topic says a British Virgin Islands court ordered 3 Arrows Capital liquidated after creditors sued the crypto hedge fund over unpaid debt. He says it had 3,000,000,000 in assets under management and a large position in the failed stablecoin Terra and its token Luna, and that how much margin it used is still to be learned.

By his account, 3AC owed Voyager Digital 650,000,000 and could not pay. Voyager's stock fell 60 percent and it needed a rescue from Sam Bankman Fried. The host also says FTX gave Voyager, a Canadian crypto lender, a 200,000,000 credit line and BlockFi a 250,000,000 credit line. Citing Rolling Block 5 investors, he says the FTX terms would wipe out BlockFi's existing shareholders. These figures are the host's account and are not verified here.

One speaker points the group to a chart of Bitcoin activity against year and value. His reading is that the market has been trading up since 2018 on stimulus money, noting that the mean price then was a small number, somewhere between a few thousand and ten thousand dollars, before stimulus arrived and the price moved sharply.

He adds that people also learned to run complicated off-chain Bitcoin arbitrage operations, which he says sit behind Three Arrows Capital. He cites a tweet from Sam saying some exchanges are already insolvent, the walking dead. He stresses that the market is unregulated, with no market makers who report to a regulator, no clearing houses, and no way to see systemic risk building.

The speaker describes a pattern that he says emerged from 2018 and 2019. A company does a large round, marks up phantom equity, issues tokens and lists them on venues where trades happen off chain. When retail piles in at listing, insiders sell to retail, and the loop is repeated as quickly as possible to extract large sums.

DeFi then appeared, offering yields of 15 to 18 percent for depositing Bitcoin. The speaker says the places holding those deposits needed to earn 11 to 13 percent themselves, so they lent off chain to others paying more and tried to arbitrage the difference. When Terra went to zero, the Bitcoin used in that process vanished. A lender asking for Bitcoin back is told it was lent on, and the final borrower holds only worthless Terra coins. This is the speaker's explanation of the mechanism and not a documented account.

The speaker names two big problems and a third that he finds funny. The first is the lack of regulatory oversight, which in his view let a large amount of systemic risk build up around Bitcoin, with some money simply vaporized. People who deposited into custodial accounts at off-chain brokers may be left without recourse. Another host adds that these depositors do not hold the keys to their own Bitcoin, in contrast to people holding it in a wallet with the keys.

The second problem, he says, is that people did not understand chain of custody. They may not own what they thought they owned, and no enforceable lending contract may exist, which he expects to raise a new set of legal issues. He contrasts this with shorting a stock, where guardrails exist, and with credit derivative swaps, where a central clearing house and a bank audit are required. The third point is that crypto commentators who claimed it differed from the older financial system turned out, in his words, to be the same or worse.

Asked for a view, the next speaker says the price is plainly falling and he has no new view. His main complaint is that SBF is trying to raise his taxes in California. Asked to explain, he says the head of FTX lives in the Bahamas, perhaps for liability or tax reasons, and describes FTX as a Coinbase competitor outside US jurisdiction. A host asks whether it is profitable; the speaker says supposedly so, and quotes a net worth of 215,000,000,000 for its founder. That figure is an unchecked claim in the discussion.

The speaker says the measure SBF is sponsoring would add a 0.75 percent tax on incomes over 5,000,000 to fund a pandemic prevention institute of his design, together with Dustin Moskovitz. He objects that it would be governed by an unaccountable board rather than something like the University of California, and calls it a use of the ballot system to fund pet philanthropic projects. Another host responds that such work sounds like a federal matter.