Ripple CTO Says FTX Differs from Madoff's Ponzi, But There’s a Catch

Nov 13,2022
Ripple CTO Says FTX Differs from Madoff's Ponzi, But There’s a Catch

David Schwartz, the technical director of Ripple Labs, is both the founder of XRP Ledger and XRP. She defended the reputation of Sam Bankman Fried, the founder of FTX, on Twitter.

Earlier today, SBF announced that it had applied for the closure of FTX and Alameda Research, and further lowered the price of Bitcoin to below US $17000, as well as all cryptocurrency markets.

Ripple CTO believes that although many people on Twitter now compare FTX with Madoff's Ponzi scheme, there are "very significant differences". Even so, he recognized that FTX eventually turned into a Ponzi scheme.

According to Ripple CTO, the biggest difference between SBF and Madoff depends on the Ponzi scheme

Schwartz felt that, unlike Bernie Madoff, who created the largest Ponzi scheme in history with a value of nearly 65 billion dollars, Sam Bankman Fried seemed to regard FTX as a legal and compliant data encryption business process gradually, and then it gradually became a pyramid, while Madoff intended to use Ponzi deception gradually, Perhaps it is willing to replace it with a legal and compliant enterprise in the future.

In his view, when Alameda Research trading company associated with FTX gradually lost money, FTX gradually turned into a Ponzi scheme. Another scenario here is that FTX founders want to become more profitable.

Peter Schwartz thinks that no matter what the situation is, SBF has added great risks to his cryptocurrency exchange - the key is to improve the efficiency, and then just to make it operate again.

Madoff made people lose money from the beginning, and Sam Bankman Fried borrowed money from customers, but he should not do so.

So far, Rob Bankman Fried has announced that he has declared bankruptcy to FTX and Alameda. This event pushed the price of Bitcoin below $17000 and down to the ATH level before 2017.