(本文翻譯自 陳冲 FTX事件是階級翻身的挫敗 2022-11-24)
FTX surprisingly declared bankruptcy with $8 billion hole. Millions of retail investors wailed. At the same time, Buffett’s Berkshire Hathaway disclosed $4.1 billion TSMC stake, stimulating the stock price to rise. The ironic contrast, the deterioration of the gap between the rich and poor, and the disillusionment of the dream of upward social mobility flashed before eyes.
Cryptoassets (Bitcoin as the representative one) depends on blockchain/cryptography technology and thus requires enormous amounts of electricity and energy. Objectively speaking, cryptoassets are something pulled out of the air and undoubtedly with no intrinsic value. I remembered when I gave a speech in 2014, I used Bitcoin for Dummies, an episode of the American legal series The Good Wife, as an example, saying that the episode concluded that Bitcoin was basically similar to commodity. It’s only an investment tool. Once the investors believe in its future, they will continue spending money chasing its value. But due to the lack of intrinsic value, if the confidence collapses and no one wants to own it, everything will go up in smoke. In June last year, we Appacus Foundation had publicly stated that youth generation thinks they have no role in the financial game of the old generation, the distribution of wealth is uneven, and the gap between rich and poor has widened. A new form of class struggle, or the mentality of class struggle, is gradually taking shape. It’s a social crisis that no government can ignore.
For the youth generation, digital divide is an opportunity and cryptoassets the stepping stone. With new rules of the game, they can get rid of the predecessors of the Stone Age and achieve upward social mobility, creating their own paradise. However, the development of any cryptoasset requires more self-control than real economy because it’s decentralized and needs market confidence to maintain its value. In other words, the governance issue there for becomes more serious. The Economist described the FTX crash this time as unprecedentedly criminal, wasteful and useless. That SBF secretly transfer funds to trading firm, used customer funds to buy and sell tokes, and accepted its own stock as collateral are evidences showing its weak internal controls and no concept of corporate governance. The impact is that the market's confidence in cryptocurrency trading platforms and cryproassets collapses. For youth generation and new rules of the game, it’s undoubtedly a fatal blow. Moreover, as the old Chinese saying suggested, the city gate catches fire, the fish in the moat must also suffer.
To make matters worse, it was reported recently that FTX is among the top political donors, the regulatory authority seemed to ignore its problem, and there even be a secret meeting with the SEC at the beginning of the year. All add fuel to the flames and the cloud of suspicion hung over. The March executive order and September statement by President Biden to strengthen digital competitiveness are overshadowed. Personally, I think the most absurd thing is Temasek's two rounds US$275 million investment into FTX. It’s actually a national sovereign fund that should have lofty economic and social goals. How can it used profit as excuse and said that their belief in the judgment is “misplaced” so that it need to write down the loss in the end? What they didn’t know is that many retail investors believe in their investment as an indicator but at the end, one single slip brings eternal regret!
Taiwan may be recognized as the hardest hit area in the world this time with 300 thousand investors and 15 billion funds involved. However, according to Taiwan’s law, there is no competent authority except for money laundering. Well, if 300 thousand votes matter, maybe the government can consider our Foundation’s previous advice: the Premier takes the charge and directs the Consumer Protection Committee to properly handle overseas class action suits matters. In the long run, it’s still necessary to follow in America’s footsteps: the President command 18 departments to actively plan for the future of the country's digital asset competitiveness. Secondly, although the cryptocurrency boom may suffer a recession due to the FTX incident, the government should not ignore the class struggle implication behind cryptoassets. How to clear the doubts about the widening gap between the rich and the poor and provide space for the development of youth generation should be the top priority now.