Cryptocurrencies or the penultimate stamp scam
It has not been a collapse like that of the 2007 financial crisis or the energy crisis that plagues us, but the fall of FTX, one of the world's major cryptocurrency platforms, has caused the collapse of at least a good part of the savers who thought they saw in this new financial instrument the way to burn through the stages and climb meteorically to the heights of wealth.
The financial marketing specialists have to be credited with a great ability to invent the same old trick: the pyramid game, which lasts as long as there are new unwary customers who are willing to offer a counterpart to a previous dupe, in other words, what has been known since the 19th century as the Ponzi scheme.
As in the more well-known cases of the past, the collapse of FTX occurred from the first week of November onwards. The platform, founded in 2019 by Sam Bankman-Fried (the compound surname is a tricky one), had a stock market value of $32 billion. But, lo and behold, it was business as usual: all of a sudden a large number of customers decided to cash in on their allegedly ethereal gains. The 30-year-old Bankman-Fried needed $8 billion in cash overnight to honour his promises to claimants, who he asked for a few days to "convert assets and various investments" into hard dollars. It was unable to do so because no one provided the amount, which on paper was only 25% of its notional stock market value.
FTX's desperate plea prompted its main competitor, Binance, considered the world leader in cryptoassets, to snoop through its accounting books under the pretext of finding out whether there was a real basis for bailing out the platform and giving it the $8 billion requested. Binance's sleuths detected that FTX had executed what are known as "off-balance sheet transactions", the same sin that led to the bankruptcy of energy company Enron, which saw its shares delisted from the US market on 16 January 2002 before Kenneth Lay and Jeffrey Skilling, the company's founder and chairman respectively, declared bankruptcy the following day in what was then considered the biggest financial scandal in history.
Binance's final decision to withhold support from FTX was taken by its CEO, Changpeng Zhao, after it became apparent that the Bankman-Fried shark had used another company for high-risk investments, Alameda, which had caused it to be overdrawn by at least another $10 billion.
In addition to the individual investors who have been left with nothing, the collapse of FTX will lead to the cascading collapse of many other platforms that lured their clients by convincing them that they were investing in an "asset". In any case, these dupes are adding to the large number of those who still believe that the stamp duty is for others, but not for someone as clever as oneself.
On the other hand, there are those who are the unwitting victims of those who have used their money to invest it in cryptocurrencies, which is the equivalent of using tax revenue to gamble at the casino. This is the situation, for example, of taxpayers in a country like El Salvador, whose president, Nayib Bukele, made bitcoin legal tender in September 2021, investing part of the public finances in this cryptocurrency. He has done so, moreover, with considerable opacity, as he has never accounted for the amount of public treasury funds he has allocated to such an "asset". In any case, bitcoin plummeted 21% in the second week of November, reaching its worst price in the last two years, after a prolonged decline since the tightening of global finances.
In the absence of official figures, sources from the Central American Institute for Fiscal Studies (ICEFI) suggest that the losses suffered by El Salvador's treasury are estimated at around 70 million dollars. Coincidentally, the growing protests over these losses coincide with China's offer to buy up much of the country's debt - El Salvador faces a January payment of $667 million - and the announcement that Central America's smallest country and Beijing have concluded a free trade agreement.
The Salvadoran opposition, meanwhile, suggests that it would not be surprising if Bukele ended up blaming the International Monetary Fund for driving him into the arms of Xi Jinping's China, since the IMF had demanded that he abandon bitcoin as legal tender in the country as a precondition for granting him a new credit line. Bukele refused to comply with such a demand and immediately knocked on the door of the Asian giant.