The Fallout Of FTX’s Bankruptcy - Spencer Cornelia

1. 0:00 – 1:27

   Intro

   1. SCSpencer Cornelia0:00

      It's kinda scary when you realize how much damages can be brought to the world by one single person. This guy pulled a massive trick on so many people and the financial damages are in the billions, with a B, from one person's behavior. Think of how scary that is.

   2. CWChris Williamson0:17

      Spencer Kornelia, welcome to the show.

   3. SCSpencer Cornelia0:19

      I love to be here right now. This is an interesting moment and I am super excited for this conversation.

   4. CWChris Williamson0:23

      Yes. I, I feel like it would've been nice for our first conversation to have been under less insane situation, but, uh, yeah, man, it's, it's a very, very important time. Has it ever been this crazy, do you think, in the finance space?

   5. SCSpencer Cornelia0:36

      Never. But this is what leads to the most enjoyable conversations, right?

   6. CWChris Williamson0:40

      Yeah. Yeah.

   7. SCSpencer Cornelia0:40

      If nothing's going on, there's nothing to talk about.

   8. CWChris Williamson0:42

      Well, I think the internet's completely awash with conversations about the downfall of FTX, which was a crypto trading platform, and Sam Bankman-Fried, who was the owner and CEO, and where he is and what he's doing and stuff. I don't think that we need to do a huge postmortem on that. I think that's already kind of been done by people. What I'm interested in is having a conversation about the ethics of the influencers that were s- promoting that platform. And then also what this means for, uh, moving forward the effect of altruism movement, which Sam Bankman-Fried was hugely influential and involved in. He was the single biggest donor toward that. Uh, and then kind of some, uh, speculation about what he and the crypto world might do next, 'cause that's, those are the most interesting things, I think. But we do need to start with some kind of a primer

2. 1:27 – 11:38

   What Happened in the Crypto World Last Week?

   1. CWChris Williamson1:27

      so if somebody has been underground for the last five days, week or so, how would you explain what has happened in the crypto world over the last week?

   2. SCSpencer Cornelia1:39

      Someone who went on a trip to, to Europe might have completely missed the entire story. Think how crazy, that's how fast it was. Uh, so essentially there was a tweet that really kicked off a bank run, essentially. There was a tweet by a competitor that was signifying that there might be issues at their number one competitor, it kicks off a bank run, and within 24 hours, the second biggest exchange in the crypto market is bankrupt. How insane. So essentially, it kicked off a collateral damage firestorm, and what's so fascinating about this case is you have a lot of people involved. You have real influencers with global audiences, NFL players, NBA players. You also have influencers in the YouTube space, and this is, to my knowledge, just off the top of my head, this might be the first time we've really seen something go awry that includes both global celebrities and influencers, YouTubers more specifically, and they're all kind of guilty of the same thing, and it's fascinating to see the fallout.

   3. CWChris Williamson2:36

      What do you mean when you say bank run?

   4. SCSpencer Cornelia2:39

      A bank run for this, uh, example is essentially there might not be money left in this, in this company. They're insolvent, and so they're supposed to be holding customer deposits, and so if you hear that a bank or crypto exchange, whatever, that's supposed to be holding your money might be insolvent, what's the first thing a reasonable person would do? You go on your app and you say, "Give me my money back." And when that happens to the extent of six billion dollars as reported within 24 hours, if you only have let's say a billion dollars in assets and all of a sudden six billion dollars worth of money is being asked for, you don't have the money to pay everyone out. And then when people aren't able to get their money, pandemonium comes in. And with social media s- news stories, spreads like wildfire. Once it's reported that your money might be gone, pandemonium sets in, and I think that's what we saw.

   5. CWChris Williamson3:29

      Should it be the case that a crypto exchange is using users' capital for anything other than simply holding it on their books ready for them to withdraw? I know that that's what banks do. Is that common practice or should that be common practice for crypto exchanges?

   6. SCSpencer Cornelia3:44

      Well, absolutely because it's not their money, right? When you take on money, you should just get a cut of the, of the fees, the small fees. That's how you make your money. Yeah, what's so dangerous about this is you have someone who took customer money and essentially went and gambled it away on a, something that's even more risky, which is these crypto tokens. What are they worth? I don't know. For me in my eyes, I don't think they're worth anything, but there's a community that thinks, thinks they're worth something. Well, unfortunately when that crypto token goes to nothing and that, you're, you're borrowing money against that token, you're leveraging trading it, it creates a, uh, essentially a Ponzi scheme. And yeah, it's really unfortunate because you have one person that acted totally against the terms of service of his own company and it created a, uh, essentially a Ponzi scheme. And unfortunate with Ponzi schemes is they fall immediately and it happens within 24 hours.

   7. CWChris Williamson4:32

      That's Sam Bankman-Fried, CEO-

   8. SCSpencer Cornelia4:35

      Correct.

   9. CWChris Williamson4:35

      ... and owner, founder of, uh, FTX and of Alameda Research that are the two big companies that are involved in that. Can you just explain what's going on and w- how all of those client funds ended up going somewhere that they weren't supposed to?

   10. SCSpencer Cornelia4:52

       I'd love to know where the money went. That's always the first question. So he was, he's the owner of Alameda Research, which is a trading firm, and then he also owns FTX and now we're finding out that he was the owner of 3,000 different LLCs it feels like. Where did the money go? Because he was buying real estate apparently right before, which by the way, is, uh, usually an indication that they know they're at fault is right before the hammer comes down, they're always buying stuff. They somehow magically have money, they're buying $200 million worth... I think there's reports out there. Who knows if it's true. But a lot of these guys go out and buy a bunch of assets that you might not be able to find. And, uh, yeah, it's really unfortunate. I, I'm guessing the money went in his pocket.

   11. CWChris Williamson5:30

       Really?

   12. SCSpencer Cornelia5:30

       Oh, oh, sorry. We also know, we also... Yeah, Bankman-Fried. We also know that he was the second biggest political donor in the Democratic Party. So there's, like, layers to this story that might come out in the next week. We might find out this goes way deeper than just one bad actor. This could be a systemic issue.

   13. CWChris Williamson5:46

       Why was it that their business was operated out of and registered in the Bahamas? Is there some extra degrees of fuckery that you're allowed to do if you're over there?

   14. SCSpencer Cornelia5:56

       It's a great question. I'm not entirely sure. My guess is yes when you're unregulated and that, that brings into question, you know, the-... the companies that you get behind or you invest in, or you put your money in, if they're overseas it adds a, uh, a le- extra layer of risk, I think.

   15. CWChris Williamson6:13

       Mm.

   16. SCSpencer Cornelia6:14

       I, I don't really know. My gue- my guess is because they weren't in the U.S., they're not regulated, and so they can get away with what they're doing.

   17. CWChris Williamson6:19

       Okay. Yes. So, should this have all been foreseen? Was this foreseeable, this, this, a huge downfall was... is it right to say that the smart people were able to see this coming from a million miles away?

   18. SCSpencer Cornelia6:32

       If you ask YouTube right now, everyone saw it coming. But my guess is no. Uh, look, there's companies that put 200 million dollars into this business. You have venture capital, numerous venture capitalists. You have people that looked at their books that didn't know. Of course, you know, what, what's unfortunate about situations like this is the, the follow-up. What happens immediately after is the next week everyone becomes a forensic researcher, and then they find one interview, one article, one incident, and they go, "Oh my God, how did we not see this coming?" The challenge, it's always 20/20. Like, there's so many things out there that look shady that are totally legit. Uh, unfortunately when something bad happens, everyone looks to bl- you know, "How did we not see this?" And then it becomes, quote-unquote, "obvious" after the fact. So, good question. Depending on who you ask, some people think they could've seen this coming, seemed to fool everyone. Why didn't they contact the SEC, right? If, if everyone knew it was a scam (laughs) , why didn't you contact the SEC? You could've saved a lot of people money, right? If you wanna play the, the moral game.

   19. CWChris Williamson7:27

       Did we not see this with SoftBank and, uh, WeWork as well, right? That they were... They're supposed to be this hugely successful, they can do the forensic accounts, they put this money into a company that claims it's a tech company and it's, it's not a tech company. It's a real estate company masquerading as a tech company.

   20. SCSpencer Cornelia7:46

       Correct.

   21. CWChris Williamson7:46

       But because they had a s- a seductive CEO, everybody was prepared to s- not observe perhaps some of the elephants that were in the room. Uh, but yeah, I mean, I... I don't know. I, it, it does strike me as strange that no one saw this coming if, in retrospect, it was so obvious.

   22. SCSpencer Cornelia8:06

       Oh, yeah. I'm being a little facetious here, um, because some people right now are making videos about how obvious it all was, and I think that's a little disingenuous. Like, it's good to have skepticism and raise concerns. By all means, and if you are right, bump your chest, you're right. However, I'm just saying that, um, there's a lot of things that seem shady or seem like they're X, Y, and Z, and it's only until it comes out that it is that then those people are right, right? But they, they weren't... Were they going to the regulators? Were they going to the SEC, right? Were they emailing people just saying like, "Hey, you should look into this a little more"? I don't know. I, I would've never seen it coming, as did, you know, massive investors that put hundreds of millions of dollars in this company. What about Enron? Enron was a public company, right? This stuff just happens, unfortunately. It's very unfortunate and people lose money. But, uh, yeah, now, now you're, now we're in that news cycle of let's figure out where did we go wrong.

   23. CWChris Williamson8:55

       Yeah, there's video clips of maybe the COO or something talking about how she only uses, uh, primary school level mathematics at her job, even though she's got a PhD. And Sam Bankman-Fried basically admitting to the fact that it's a, a large Ponzi scheme. And, uh, at the time, that looks like, uh, cutesy, uh, casual language. In retrospect, that looks like a smoking gun. And-

   24. SCSpencer Cornelia9:20

       Absolutely.

   25. CWChris Williamson9:21

       ... yeah, I think that it, it, it is an interesting one to consider why people put so much faith into Sam Bankman-Fried as somebody that I'd heard. I am not in the crypto space. I am not a part of the investing world or the finance world. I'd heard through personal friends about some of the dodgy shit that he was doing, that he had access, a backdoor into the, uh, trades on the backend of FTX, and he was able to short to, like, uh, get in ahead of short positions and long positions on different trades in order to scalp extra money off the top for either himself or for FTX. So, I mean, again, but like what, what am I gonna do? Am I s- am I... Does that mean that I'm gonna ignore this huge, what is second-largest, third-largest crypto exchange in the world? Like, it's only fortunate that I have the tiny sliver, like two grands worth of Bitcoin that I own is on Coinbase. Like, for all... Had I have gone on a different app on a different day, it would've been FTX, and that would've been my money gone as well.

   26. SCSpencer Cornelia10:18

       Yeah, and that brings up an interesting question, which is, is promoting Coinbase right now, is it scammy? Should you get f- you know, did anyone who promoted Crypto.com, Coinbase, they're all kind of the same, right? If you, if you think the system is all a scam, right, in regards to these exchanges, then you'd say it's unethical. It's just what's challenging is you don't, you don't really know until it happens, right? Everyone's a genius after the fact. And unfortunately, we'll have that news cycle now. My guess is there's probably gonna be another week of this, and then people will come to their senses and will start to dig in. Thankfully, what generally happens too is you, you have a group of people that realize, like, "Something bad happened. How can we, how can we protect ourselves from this in the future?" And then that's when we start look at the signs and we go, "Okay, well, let's start looking around in other places and try to figure out where, who else is going wrong."

   27. CWChris Williamson11:01

       Surely though, there's some rightful retribution and vengeance and ire that needs to be directed at all of the people that run that company. Like, it's not just about-

   28. SCSpencer Cornelia11:11

       Absolutely.

   29. CWChris Williamson11:11

       ... like, "Oh, okay, let's just let, whatever, $10 billion worth of capital go and then we'll, you know, we, we'll just move on. We'll learn from it and continue going forward." That's not the way it works.

   30. SCSpencer Cornelia11:21

       Right. I agree. Yeah, unfortunately in situations like this, really everyone's to blame, everyone who's involved, right? You influence people, you put your name to it, that's just part of the game. If you sponsor something, you're gonna, you're gonna face reputational damage if things go wrong. That's unfortunately part of the risk you take on with, with taking on money.

3. 11:38 – 17:20

   What is Sam Bankman-Fried Doing Now?

   1. SCSpencer Cornelia11:38

   2. CWChris Williamson11:38

      Have you been doing any research about what the CEO, Sam Bankman-Fried, is doing right now? It seems like people are trying to track different jets and stuff out of the Bahamas, and he's going to Argentina or maybe Dubai or something with no extradition. I don't know.

   3. SCSpencer Cornelia11:52

      Yeah, crypto Twitter right now is certainly an interesting place. I feel like it's the, it's drama for adults. Like, we, we look at, um, we look at certain shows on TV like the Kardashians and, and guys are like, "Ah, I would, I would never watch that stuff." But then, like, we, we tune into the most drama-full (laughs) space on the internet, which is crypto Twitter. You know, when stuff like this is happening, it is our version of drama.... I, I don't know what he's doing. I don't think anyone knows what he's doing. There's a lot of speculation. It is pretty fascinating though once someone gets caught. How do... You know, what are they doing? They're always running.

   4. CWChris Williamson12:22

      Apparent- apparently it seems like he's got maybe between half a billion and a billion of, um, publicly known cash still left over. So, he basically got unlimited funds to be able to find people to squirrel you away, to travel and be secure, uh, provide security and close protection and shit like that for you. Uh, but I would guess that there will be a lot of people very, very keen to try and find out where he is. But I don't really know what you'd... What, what do you do if you get your hands on Sam Bankman-Fried? Like, I, I, actually-

   5. SCSpencer Cornelia12:52

      Yeah. He's in, he's, he's in the bathroom next to you.

   6. CWChris Williamson12:54

      Yeah. He very well-

   7. SCSpencer Cornelia12:54

      You know, you go to a restaurant, he's in the... He's next to you, going to the bathroom. You're just, "Hey, hey, wait, you're the, you're the most hated man in the world right now."

   8. CWChris Williamson13:00

      What do you do? Uh, well, I mean, what, what are the legalities? Are you aware of the legalities of what has been done? No. Right.

   9. SCSpencer Cornelia13:12

      No, not at all. Obviously, there's gonna be criminal proceedings, but I have no idea. It... To me, it just seems you just, you just go find him. Like, okay, here's the thing, we can track people down if they can't make a car payment, right? In Las Vegas, Nevada here. If someone doesn't make a car payment, somehow some Dog the Bounty Hunter is able to find him within 24 hours. You're telling me we don't have the ability to find a guy worth a billion dollars that's as public as him? I just don't buy it. And so, I, I'm just shocked that this stuff... That they don't have a full team of squ- uh, a, a full SWAT team outside his house or wherever he is, right? Can you not track his phone?

   10. CWChris Williamson13:46

       But if he's across-

   11. SCSpencer Cornelia13:47

       I'm guessing they come-

   12. CWChris Williamson13:47

       ... multiple different countries and jurisdictions, who do you send? Do you send... Do, do the American government send someone to-

   13. SCSpencer Cornelia13:56

       That's fair.

   14. CWChris Williamson13:57

       ... Dubai?

   15. SCSpencer Cornelia13:57

       That's fair. I guess, that's the benefit of being in the Bahamas. He was in the Bahamas. So then, yeah. Uh, there's reports, who knows what's true, but there's reports of him, like, paying off the local police, so that... Yeah, then that comes into question if, if someone's making the equivalent of 30,000 US dollars a year. If someone pa- paid them a million dollars to just say, "Don't show up," or, "Show up to my house and say I'm not here." I'm not saying that's the ethical thing to do, but I, I get it (laughs) . Right? Right? You're not making much-

   16. CWChris Williamson14:20

       Well, that was one of the reasons that, uh, John McArthur decided to stay in the... Where was he? Not Venezuela. He was in s-

   17. SCSpencer Cornelia14:27

       I don't remember.

   18. CWChris Williamson14:27

       He was in some insane... El Salvador or Belize or something like that. And, uh, one of the big reasons was that corruption was gonna be much more, uh, easy for him to complete. And if you've got someone that can backhand all of the local prosecutors and police chiefs, you've got a lot less to worry about. So...

   19. SCSpencer Cornelia14:48

       There's a Kanye West song where it goes, "There... No one man should have all this power." It's kinda scary when you realize how much damages can be brought to the world by one single person. This guy pulled a massive trick on so many people and the financial damages are in the billions with a B, from one person's behavior. Think of how scary that is. And there were, there were... There's a system in place to try and prevent this, to some degree, right? You have people investing their money. Obviously, they're gonna try... They're gonna do their best to make sure their money is safe in regards to the investors and people close to him. You even had employees at his company that I'm sure were the... Were... Are great people that had no idea and they were able to get fooled. Scary, isn't it?

   20. CWChris Williamson15:33

       I don't know, man. I mean, I wonder what sort of pressures have been placed on him behind the scenes. I... The, the guy is ultimately the, uh, bearer of responsibility. That's what the CEO and founder/owner's job is. Um, but there's no way that it's only him that was involved in this.

   21. SCSpencer Cornelia15:52

       Right.

   22. CWChris Williamson15:52

       You know, this conversa... There's... My favorite conspiracy is that SBF was a government insider who's trying to give the government a good justification to more heavily scrutinize the crypto industry by purposefully bringing it down.

   23. SCSpencer Cornelia16:06

       That would be an amazing movie plot (laughs) coming to you in 2025. (laughs) If that's true, man, that is e- even more scary, I think, because there's an inherent level of trust we have in a lot of people in government regardless of if you, you know, like government or not. I think there is an inherent trust like they're gonna go after the bad guys. And if you find out they were in bed with the bad guys, and in some sense giving them more power, who's to say someone else out there isn't as corrupt?

   24. CWChris Williamson16:34

       Well, especially given that the crypto community is very anti-authority, very anti-government, it doesn't want oversight. The entire reason for having a decentralized currency is that you're safe and secure and walled off from all of this stuff. And yeah, I think this is one of the reasons that... Uh, well, I, I learned about your glowing. Have you heard about glowing on the internet? Oh, so it's... Uh, I think it's a term that people use to identify someone that they think is potentially a federal agent or a government insider that is trying to move the conversation in a particular direction, and your glowing is we can see that you're actually not one of us. You're one of these bad actors that's in here to try and infiltrate and get us to do stuff or say stuff that we're not supposed to.

   25. SCSpencer Cornelia17:16

       Huh. Not familiar.

   26. CWChris Williamson17:17

       Well-

   27. SCSpencer Cornelia17:18

       I've, I haven't heard of them.

   28. CWChris Williamson17:18

       ... you learn something new every day.

4. 17:20 – 24:25

   Should We Be Worried About Coinbase?

   1. CWChris Williamson17:21

      What about stuff-

   2. SCSpencer Cornelia17:21

      I'll have to google this.

   3. CWChris Williamson17:22

      What about stuff like Coinbase then? Would you be worried about Coinbase?

   4. SCSpencer Cornelia17:26

      Uh, from the standpoint of it falling, I think there's gonna be a massive fallout because my sense of crypto... And by the way, I'm, I'm pretty ignorant to all this. But, you know, I know enough to at least... When I see the Twitter, crypto Twitter talk about this that it... There's gonna be massive fallout, meaning they're... A lot of these companies seem to be interconnected to some degree. There's loans and there's leverage. And once you have one company fall, if they were... If they had given out a loan or something and to someone else or they're receiving a loan, now all of a sudden, the other company might be tied to them or they have their assets on FTX to some degree. It's kinda scary to think about how quickly it can all fall.

   5. CWChris Williamson18:02

      Okay.

   6. SCSpencer Cornelia18:03

      So, in, in regards to Coinbase, like, is, is Coinbase just as vulnerable now? Is there gonna be a bank run on, on Coinbase as influencers start talking about, "Get your coins off these, off these exchanges," right? Is there gonna be another bank run?... and you know how momentum happens. Right? You've had all the stuff that happened this summer, now you've got FTX. Who's to say that all the momentum doesn't cause another bank run?

   7. CWChris Williamson18:24

      It does seem like the last... W- since there's been blood in the water over the last year, I think if you go back the- the all-time high of Bitcoin was almost exactly a year ago. I want to say. If you put in a year, it's like 67,000 s- 75% down year on year, which is just fucking terrifying. Absolutely terrifying. And all of the conversations about NFTs have stopped. All of the conversations about decentralized banks and that we should adopt it as our national currency and all of this stuff, all of those conversations have stopped. And you think, well, when something is an appreciating asset, everybody's happy to blow it up. But when something's a depreciating asset, everybody's terrified to even touch it.

   8. SCSpencer Cornelia19:10

      I also think the sentiment turns as well, because crypto, for the most part, has been a get rich easy, get rich easy scheme, right? Peop- you see your neighbor, you see your friend who made 1,000 extra returns in six months, and there's a, there's a certain hopium that comes with it, right? If you're not making much money, if you just find the right coin, you will go from $20,000 net worth to 2 million. It's happened enough, there's so many examples of it on social media, that you feel like you're g- you have the ability to be the next one. And I think what happens when the market tanks the way it has, is y- a lot of people lose that sentiment, and this is where markets turn, especially in something that is driven a lot by momentum, like crypto is. And, uh, and so I wonder if the next year or two you see a lot of turn in- in- in the market sentiment.

   9. CWChris Williamson19:57

      What do you think-

   10. SCSpencer Cornelia19:58

       That- that being ju- that being just people's perceptions of- of possibility. I actually had a thought that I wanna share with you. So, one thing that makes America great is we all have this ability to, uh, of upward mobility, meaning if we work h- there's the- the ethos of if you work hard or if you start a business or inve- you invest in the right thing, then you will be able to move up in the social status. I think what happens during downturns and what we were seeing now, the stock market's crashed, real estate's n- never been this unaffordable, and then you also have the crypto crash, is I wonder if people are gonna start losing that feeling like they can have upward mobility, right? Because if all of that's either stagnant or crashing 75% that you just alluded to, how do you go from making $30,000 a year to $100,000 a year? Taking on a bunch of debt? That's scary. Right? Student loan debt. And that's what I'm really curious to see over the next 12 months, is i- i- if there's a sense, if there's a feeling of that lack of potential upward mobility within this country.

   11. CWChris Williamson20:54

       So if a poor market means that the cultural sense of America being the land of hope and blue sky vision, th- that might fall away. I don't know. I mean, you know, if you were to read what most of Twitter and headlines talk about at the moment, I think that seems like it's long gone to people. It d- it... That- that's a very cynical view that a lot of people hold, but it's a lot of the people that seem to be in positions of social and media influence that they talk about America as being this awful, terrible place that n- needs to be basically torn down and rebuilt anew. I was driving along, uh, from Houston back to Austin with my housemate a- about a month ago, and we were going past these two huge, uh, flagpoles with these- these f- flags were the size of a house, right, and they're moving super, super slowly. It's like really, like cinematic and beautiful and artistic. Texas flag and the American flag. And I was looking at it and thinking, "That's really fucking cool." Like to see that, to see the pride in not only a state, but in the country at large. And I said, I was like, "Dude, I- do you know what it is? I- I really enjoy the fact that I'm here at the moment, but I kind of wish that I'd been here during the '90s." I feel like the '90s was this sort of absolute golden era where you'd got out of the other side of the Cold War, no one really had too many fears about being nuked, 9/11 hadn't happened yet and you just had this culture, sports, movies, cinema, Hollywood thing. It was before people-

   12. SCSpencer Cornelia22:17

       Michael Jordan.

   13. CWChris Williamson22:18

       Michael J- Yeah, it was basically a country of Michael Jordan, yeah. And that to me just seems like such a golden era, and I- I'm... I don't know, I love being here, I think it's a fantastic country that I very much enjoy my time in, but it doesn't seem like the same country that I have read about from the '90s.

   14. SCSpencer Cornelia22:36

       That's a really interesting idea, and it is something I will be tracking closely. My belief is that right now we're starting to see the market turn both in numbers on a screen, but also in people's beliefs and in their belief that they can make a lot of money investing. I've noticed there's an energy on YouTube, and you could argue maybe this isn't the best view of America at whole, I'll totally accept that argument. However, I've seen an energy that exists that I don't think existed 12 to 24 months ago, and I'm worried that a lot of young people don't think they have the ability or live within a system that will provide the opportunity for them to better their lives, and that's what I'm gonna be tracking very closely. The reason why I bring that up is I think there is, uh, a lot of pushback against influencers right now, and I think there's a lot of... I don't like to jump to the word jealousy, I feel like that's a cliche trope, but I- I get the sense that there's a lot of people struggling and influencers are succeeding, and I think what made this FTX fiasco so interesting is that they were very popular influencers, ones that make a lot of money, both the NBA stars, Tom Brady and YouTubers, and they essentially made money to a large degree, you know, a- a significant amount, and then p- influenced people to lose money, and I've never seen the energy before that's happening right now, right? It's unfortunate circumstance, it's un- it's awful, it's so... It's really sad that people lost money. I would just be curious to see if like the same thing happened three years ago if the same pushback would have happened. I don't know, if- if it's the same then my theory is wrong, but I- I would- I would bet that the energy is much different today.

   15. CWChris Williamson24:16

       Like the current cultural milieu has primed itself to be very, very negatively reactive to this. It- that'll be

5. 24:25 – 39:27

   Ethics of Influencers Promoting FTX

   1. CWChris Williamson24:25

      interesting. All right, so what do you think? Give me your thoughts. What do you think about the influencers that have been involved in promoting FTX?

   2. SCSpencer Cornelia24:33

      What's so fascinating too about this recent week, um, b- with the FTX fiasco and the pushback and seeing all the... I, I read the comments, so I see comments and videos all throughout YouTube. And I think everyone's to blame, right? If, if there's any fraud that goes on, if, if someone promotes something, right, if you go to your neighbor and say, "Hey, you should buy a house. It's a great time to buy real estate," the second they buy, the market crashes and their house is worth $100,000 less. Like, yeah, yeah, in a sense, you should be blamed a little bit, even though it's not entirely your fault. So there'll always be blame to give out. What I find interesting is, is where they're pointing the blame and also just the, um, just the unfortunate nature that people were sponsoring something that was a complete fraud without them knowing. And so the, the... To me, the real question is, did people know it was a fraud or a scam and still promote it? That's where my ethical line is drawn in the sand.

   3. CWChris Williamson25:25

      Why do you think that your position in Coffeezilla's is, uh, different on this?

   4. SCSpencer Cornelia25:31

      We actually agree to a large extent. I think we were just disagreeing on, like, some points that aren't really that relevant. For instance, here's a great question. So he, he brought up the idea of Tom Brady's not a financial expert, Steph Curry is not either, so you don't go to them for financial advice, right? My position is they were getting paid, let's just assume 50 million, right? For Tom Brady to, to do what he did is probably... I mean, he had, he'd have to get paid some serious dough. My guess is he probably got paid somewhere in the 30 to 50 million range, which means he's probably influencing that much, right? Any business sense will tell you there, they had reason to believe whatever they paid him, they'd make back at least one to one. And so who's really at fault? If, if Tom Brady's not a financial e- expert and people aren't going to him for financial advice... I totally agree on that point, right? If you go to a financial YouTuber, there absolutely is, is more responsibility on them. I've never argued that. My point is that Tom Brady influenced at least 100X to 1,000X the damages. And so if we're being reasonable people here, and let's figure out where to place the blame, my point is that if someone caused 1,000X the da- person A causes 1,000X the damages as person B, a reasonable person would place the blame more on person A. They both deserve blame. And that's what I said in my video. And what I, what I'm bringing up is how interesting it is to see the feedback, and this is where I get to, like, the public sentiment and the negativity, is that I was being incredibly reasonable. Even said, "You can blame my friends, they are partially to blame here." Like (laughs) this is not, like, a new... This is not, like, an argument I was trying to fight against. It's absolutely true. My point is that, um, I believe there were other factors at this, there were other people that are just to blame. And then Coffeezilla also brought up the point that so-and-so is not an expert because this happened, right? Well, if you use that same logic, then anyone who invested in this company is not an expert. I would like to consider BlackRock, Sequoia Capital, and these other massive funds as experts. I will not change my position on that because of FTX, nor does anyone, nor does anyone change their opinion. So why now are you changing the opinion of someone who influenced them? Does that make sense?

   5. CWChris Williamson27:32

      It does. Does it not make sense also to say that if you push something which ultimately turns out to be a scam, that your validity and how much faith people should have in you goes down a lot?

   6. SCSpencer Cornelia27:43

      Absolutely. You should absolutely question it. And now you should wonder what's next, right? If, if someone were to promote a scam or a fraud and the next thing they promote is something similar, I would say major red flags. That's not a good look, right?

   7. CWChris Williamson27:59

      So I, I understand the approach that you're taking, which is kind of like a utilitarian thing. There is a total pot of damage that has been done in terms of every influencer that contributed to FTX. We should be, um, proportionately putting our vengeance and our displeasure toward those that did the most. But when you're referring to most of the content that's going out at the moment, it's going out on YouTube, it's specifically being aimed at YouTubers, and given the fact that it is on a platform that these people exist on, Tom Brady doesn't have a YouTube channel, he's not a YouTuber first and foremost, YouTube has every right to point fingers at members of its own community and say, "You done fucked up. We're gonna make everybody know that this is, this is something that was a huge error on your part as somebody that claimed to be a financial expert."

   8. SCSpencer Cornelia28:48

      I absolutely agree. And yeah, I never disagreed with that point at all. It's like if, uh, if you went on Tom Brady's website, right, you're, you're probably gonna see comments about Tom Brady (laughs) for this situa- You're not gonna see comments about Graham Stephan, right? So I totally get that argument. My point is that you can lead... 'Cause all this comes down to, it's almost all clickbait, right? Like, a lot of the venge- a lot of thumbnails is, like, a little sensational and, you know, "So-and-so is a scammer. They're the worst person ever." Right, I get it. It's sensational. My point is that you can make videos about these people on YouTube, 100%, that's a smart thing to do. I would do the same thing. If I was talking about something that happened with YouTubers, I'm going to put the YouTubers in the thumbnail. My point is that throughout the video, you then bring out a reasonable argument that contains what I'm saying, right? So you start with the YouTubers, they're at fault, however, you then introduce the fact that there are many other factors in this. But I think if you only target three or four individuals, to me that's dishonest. And that's where I came from, and that's why I responded the way I did. When I don't think something's fair, I'm gonna mention it.

   9. CWChris Williamson29:47

      You'd mentioned that you are friends with a bunch of the guys that are kind of culpable at the moment. I think you're on the same management company, creator of-

   10. SCSpencer Cornelia29:53

       Yes, creators agency. Yeah.

   11. CWChris Williamson29:55

       ... co-

   12. SCSpencer Cornelia29:55

       Yeah, they get us sponsorship deals.

   13. CWChris Williamson29:56

       Is that jading your view of these people at all? Is that causing you to be less unbiased with your approach?

   14. SCSpencer Cornelia30:04

       Do you think we are capable of understanding our biases?

   15. CWChris Williamson30:08

       To a degree.

   16. SCSpencer Cornelia30:09

       You think so?

   17. CWChris Williamson30:10

       Yes. I think that it's your job to discount the position that you hold based on what you think your biases would be about those people. So, like, if someone starts criticizing my roommate and best friend, I, I know that there is going to be a part of me that is going to immediately stick up for him no matter what the criticism is, but I need to account for that. It's my job to think-I'm close to this person, I have a ton of biases that are playing with this. So if I want to rationally look at this, which is what you're proposing, you're proposing we take this rational utilitarian view, how much damage is being caused overall, that is absolutely something that needs to be turned inward on yourself when you're saying, "Okay, just how biased am I when it comes to me talking about my friends and, and co-creators within this agency?"

   18. SCSpencer Cornelia30:56

       I agree. So number one, this is why I bring up that I'm friends with them throughout the video. So I don't... I make it very clear that you can assess that however you want, right? I feel like it would be disingenuous if I didn't bring up that point, and then I was trying to play like, "Oh, yeah, I barely know them," when in fact I do. I also... By the way, I put my... I put creator's eg- agency email in my thumbnail, or in my description, and I have all... pictures all over my Instagram. It's like, it's- it's kind of funny that people are trying to expose this, as if it's- it's like very public. So, yes, I'm so... I'm- I'm attached to them, but also we're discounting the fact that I teamed up with them because I like them in the first place, and I think they're good people. Who doesn't? Dude, I eat dinner with these guys every Tuesday. I hang out with them for hours. You don't think we discuss this stuff? That's unfortunately what doesn't go into YouTube videos, is you don't see the hours behind the scenes where I actually talk to them about FTX, and... Anyway, I've also... In regards to bias, I think the best way to challenge a bias is to bring up an identical scenario, but you remove the emotions. Meaning, let's do the exact same scenario, but ins- let's replace the people where you may have a bias towards, in this case my friends, let's replace them with random people. Let's call them Tai Lopez, Grant Cardone, and all these people. Had they promoted FTX... Here's the thing, I'm very, very, very confident that my position would not change. Obviously, you can believe whatever you want to believe. You don't know me as well as I know myself. Uh, the story is Sam Bankman-Fried, right? When I look at stories, I like talking about fraud, I like talking about things that have been proven. To me, the story is SBF, and how he fooled everyone, and how he fooled some of the smartest minds in the world. Additionally, I would have talked about the influencers who were at fault for influencing this. The problem, and the reason why I made the video I did, is I would not be making a sensational title and making the video only about them. The story is Sam Bankman-Fried, and maybe halfway through the video I'd bring up Tai Lopez, Grant Cardone influenced people to lose money, let's... in- in the most simple terms, right? They influenced people to lose money. Are they at fault? Yes, but I would have began the story with all the people who I believe are way more at fault. And so am I biased? Of c- it's so funny. Am I biased? Of course I am. But also in the same video, I... Coffeezilla is the one person, like I respect him more than anyone. He's probably my favorite creator, and I disagree with him even knowing by disagreeing with him that I'd caused an emotional response. I could have easily put clips of his in the video and just not disagreed and like made the, made people not react the way they did. And so am I biased? Yes. But I also felt like I was more than fair because I'm defending friends, and I'm actually going against the one person I respect the most. Like, we have similar audiences, way more than say like a Graham Stephan or Andrei Jikh. And so I was essentially going against the narrative of my own audience. And so when people ask if I'm biased, well, sure we all are to some degree, but that's taking away from the fact that I kind of stuck my neck out knowing that there'd be a massive negative response, and I still made the video. I didn't have to make the video. So that's my answer.

   19. CWChris Williamson33:49

       I think that one of the concerns people have, o- one of the difficult positions that anybody in the call out space, the grift scam identification space has, people feel like the policeman that breaks the law is doing something that's particularly egregious because they're the ones that are supposed to live by the law. They enact it, right? And it's kind of like you guys are the police of the internet in a way. It's like somebody steps out of line, we're gonna find it, we're gonna do a video on it, and everybody's gonna laugh at them and- and call them a- a wanker. That means that you get held to the highest level of scrutiny of anybody. And it... The concern, I think, is that if you're supposed to be on the side of holding people who promote scams accountable, this should be applied in the same degree of intensity toward everybody that was a part of FTX.

   20. SCSpencer Cornelia34:41

       Wholeheartedly agree, by the way. Th- that's the best argument presented towards me, and one that I actually, uh, very much appreciate when people challenge me like that, because I totally agree. The thing is, in my video I say that you can place blame on them. I'm not saying don't place blame, I'm saying everyone is at fault. The argument I presented is just y- to have a weighted scale so inc- for... So we don't, uh, argue in circles here. Becau- because I said weighted scale, what I was really trying to say is, you can blame person A and person B, just send a little more of the vengeance energy towards person A if he caused way more damages.

   21. CWChris Williamson35:15

       What-

   22. SCSpencer Cornelia35:15

       But, yeah, I totally agree, man.

   23. CWChris Williamson35:16

       What level of scrutiny do you think influencers should go through when they do a partnership like this? Obviously, one of the questions that we're talking about is how foreseeable was this. In retrospect, it seems completely obvious, in advance it seemed almost completely unobvious. How much work do you think these influencers should do to work out whether or not what they're promoting is legit?

   24. SCSpencer Cornelia35:43

       I think step one of this, or kind of the first question, I think transparency is always best, right? If- if- if someone was emailing them the whole time just saying, "I have secret intel, do not promote this product, it is bad," and you still do. Yeah, a little more burden of proof is on you to show that you're not the bad guy here. So I think it's always important to come out and sh- and just share like what exactly happened from your perspective. I see nothing wrong... If you were duped as well, I think it's important to talk about it and not shy away from it, and let people know that you were duped as well. I think what's important is that you question, you can always question people. It's always fair to be questioned, that's why I'm always open to criticism. I'm totally cool with people making videos about me. Say whatever you want. You can question my reputation, credibility, standards of ethics, you know, whatever. Totally cool with everything. It's n- there's n- I've never had a problem with people criticizing or making videos simply questioning. And so in a situation like this...... when there is a scenario where you influence people to lose money, I think you absolutely should have your whole operation questioned. And I think what's most important is now to see how they respond, right? In a time of crisis, I think how you respond tells you everything you need to know. If you begin promoting, let's say, crypto altcoins or something after this fiasco, or begin promoting another crypto exchange, probably not a good look, even if it is reasonably safe. And so I think that's, um, that's where y- you question first and then you evaluate the behavior after. If the behavior after doesn't change, I think you then can att- attack with the vengeance I'm seeing today. I think that's, uh, the fairest way to do this.

   25. CWChris Williamson37:17

       Well, that's kind of what we were talking about at the beginning, right? That there is, there is obviously a lot of distaste at the moment on the internet, and the closest people that can be touched and that a lot of the internet feels like they can impact, literally the guy that everybody is trying to find, no one knows where he is on the planet, right? We don't know where Sam Bankman-Fried is, so he's currently off the table. People can send all of the tweets that they want, but nobody feels like they're actually going to impact Sam Bankman-Fried's day. Like, he's already having a pretty bad day, right? The people that most of the internet that do have disgust at what happened with the FTX debacle, the ones that they feel like they can apply some pressure to are the creators of the size of a Tom Nash or a Graham Stephan or whatever. And the reason that they're putting pressure on them is because they think that they can make some sort of a change, that they're going to appear within their mentions, that someone's going to send them the video or whatever.

   26. SCSpencer Cornelia38:11

       And they know they'll be heard, right? That's most important. If BlackRock had a comment section, would we see the same energy? I don't know. I'm not sure. But you can't access them. You can't access Tom Brady. You technically can respond to his Twitter or something, or his Instagram, but he's not gonna read it. He's not gonna see it. Yeah, so this is the front line of the, of the pushback. And that's why... And look, this is what we sign up for. I can't really complain, right? (laughs) Whenever you do get pushback, it's like we get the glory, we get the, the fun life, we get the, you know, for some of us, the money, extreme levels of money. And, uh, and we get a lot of benefits. And then when something happens, yeah. I think that was another Coffee Criticism is like, you can't have your cake and eat it too. Yeah, I totally agree. Like, I'm... When you, when you sign up to sponsor something, you're kind of putting your reputation on the line.

   27. CWChris Williamson38:54

       Mm-hmm.

   28. SCSpencer Cornelia38:54

       And I think when, when something goes wrong, you do take a hit for sure.

   29. CWChris Williamson38:57

       Yeah, that's why I would be hesitant to say, um, y- you get like a life, you get like a... You're allowed to have one of these errors within this domain, but then if you do it again, then we're gonna come after you. It's like, no, like, fucking $10 billion of money has been lost. Like, you don't get to, you don't get to get out that j- get out of jail free card. It's like, "Oh, it's only a mistake if I make it twice." I, I, I don't think that's a strong argument.

   30. SCSpencer Cornelia39:18

       My argument, that is?
6. 39:27 – 46:58

   Is This a Lesson in Due Diligence?

   1. CWChris Williamson39:27

      go through about their, the companies that they are partnering with is, that's a really interesting question. Like, how much due diligence are you supposed to do? Presumably BlackRock did a fair bit of it, but then we also see situations like the SoftBank and WeWork one, where they also did and continued to pump tons and tons of money in. So you know that humans have these biases where a charismatic owner or someone that's got a great story or whatever can encourage people to spend more money than they should do. And okay, well, just how much m- time and effort, uh, should be spent on this? And where's the threshold, right? Like you say, if it was an obvious shitcoin, well, what's an obvious shitcoin? Like, if you've got selling Gravity and promoting, like, a fundamental law of the universe on one side and promoting an absolute shitcoin on the other, at what point you are no longer liable for something going wrong? Like, if you promoted the US dollar, right, which has done all right over the last year. If you promoted the US dollar and it went down, like how culpable are you for that? Like, it's an interesting question to look at where that line lies. And I think that the internet at the moment seems to suggest that it lies below where most of these influencers are, i.e., that they are culpable for pretty much everything that's happened.

   2. SCSpencer Cornelia40:44

      Yeah, I think that's a fair argument. Here's where I come in. I like to look at intentions of behavior in all scenarios. I try to evaluate the best I can. I think that matters most. Like, what are your real intentions, right? If your intentions... I- if you're promoting a- an altcoin, some of these altcoins, and it's incredibly likely that they're going to pump and dump, right? And especially those who took money right before a pump and knowing there was going to be a dump, your intentions are clearly to take money at the expense of your audience. I think that's an entirely different argument than someone who takes money. All right. So you're both taking money to promote something, but in, uh, in option two, you legitimately think and have reason to believe that your audience will benefit from the product or service you're promoting. In regards to the due diligence, th- that's such a fascinating argument because we have an inherent level of trust in everyone, right? Like, you assume BlackRock did due diligence. But now, and- and my point about like the week, the week following, you're gonna find all these, these red flags, right? There was some story about Sam Bankman-Fried in a meeting where he was trying to raise money. He's like playing video games and, and eating snacks. It's like that, that is incredibly large red flag. However, there's probably 100 examples of someone in a very questionable manner in a, in a fundraising meeting, and yet it turns out to be the most legitimate thing in the world. That's why I'm saying there's, there's like, there's not a single... In life, there's never like a single thing that you can point to that goes, "There is an obvious fraud or problem, and I, I can spot it from the start." It's like you can find examples... That's why life is so nuanced. Yeah, it's challenging.

   3. CWChris Williamson42:18

      What would you do if you were one of the influencers that had been involved in this? What would you do moving forward?

   4. SCSpencer Cornelia42:25

      Th- well, first off, thankfully I didn't promote it. (laughs) So, thankfully. Yeah, I, I purposely stayed away from crypto. Anything crypto related, man. I'm not into crypto space. It helps that my audience is not crypto related, so it, it kind of gave me that easy out where I just... Anything crypto, let's stay away.I think the first thing is you, you are incredibly transparent about the process you went through to figure out that it's legit. Because by the way, I've had conversations with these guys behind closed doors that no one knows about. Like, they've done way more due diligence than the average person. And this is... By the way, this also goes into my video that I make that unfortunately people just don't see, which is, you don't think I've talked to them about this stuff over dinner? It... Like, they know way more. There's... My buddy, Tom Nash is another one. He... I'm not gonna explain, but he, he had a very trusted source that, like, let's just leave it at he had every reason to believe this was an incredibly legitimate company, with way more credibility, his sources, way more credibility than the average audience. And so anyway, I think it's important to share all that you know if you can, share how much money you made. And typically, it's best to share the process on how you're gonna improve. So, you first show empathy towards the people who have lost money. You second, share complete transparency about everything you went through or even all the benefits you had from it or you gained, and just say, "This is really unfortunate." And then most importantly, you show that you're willing to improve from what happened. I think that's the best-case scenario. But I've also... But full disclosure, I've never experienced something like that. I've never gone through, like, a media scandal.

   5. CWChris Williamson43:55

      Mm-hmm.

   6. SCSpencer Cornelia43:55

      And so I, I'm just... From my perspective, that seems to be the best case. Like, whenever you see people handle it really well, that seems to be the process they follow.

   7. CWChris Williamson44:03

      Yeah, it's an easy, uh, sideline tactic, I think. But when you're in the midst of it, someone's saying, "I got paid 50 grand a month or whatever from FTX." Meanwhile, all of the people watching are 50 grand down, you know, on their investment. Uh, I haven't seen... I don't know whether Tom's done a, a video about this yet. I've seen maybe a couple of the ones online. There is a, uh, like a, a tone to finance YouTube that's a bit dispassionate. Like, it doesn't really feel like there's a massive amount of emotion going in there. It does sometimes feel a little bit like a press release that's coming down from a, an office on the 45th floor. And I do think that you're right, that, you know, genuinely showing empathy, not just reading lines that sound like empathy, but genuinely showing empathy is important. I also don't think that I've seen anybody disclose how much money they were paid for this partnership yet. So, uh, I would say that given your tactics, as of yet, no one's followed any of them.

   8. SCSpencer Cornelia45:07

      Yeah, I agree. Yeah, that's a really uncomfortable conversation, right? Is you got paid for work and you got... Let's say, let's just call it a fair market rate. And then when that thing goes wrong, like, do you give the money back? Here's the, here's the thing. Like, yes, you... In a perfect scenario, you just... "I got paid five grand to do this and I'm going to give five grand to these homeless puppies down the street, right?" And, "Oh my God, you're the good guy here." But what happens when it's, you know, a decent amount, but you did it for so long that... You know, you have... You're worth something too. You're putting in work and giving value to the world other than the sponsorship, right? And the sponsorships help you pay your bills and, and help you produce the content that hopefully is helpful outside of the sponsorship, right? Yeah, what is your responsibility in making people whole? That is an incredibly tough ethical question, and something that I'm not really going to speak further on because I don't want to position my friends as doing the right or wrong thing, because everyone's... That's their, that's their fight. I'm not in this, so... You know, what would I do? Yeah, and by the way, I think it totally changes. If you get paid a thousand dollars and you've got a lot of money, you're probably just going to pay it off. Just, "Hey, I'll give it up." But, you know, what happens if my, my net worth is X, what happens if I'm getting paid, you know, a significant amount from that sponsorship? And now I'm not liquid, right? If whatever I got paid, if I'm not liquid that or if it's going to massively damage my life, you know, where's the ethical line between giving it... And by the way, what's also challenging about this is the variable that you can't account for, is that just by giving the money away, let's say, it doesn't mean that everything's made right. You're not... You maybe didn't even save your reputation. So, that might not even be the solution, right? You, you might... If you, if you gave away the funds, you might help out your, your cause in the moment, but is that angry mob that's coming after you, are they going to be fine with that and agree that that is an adequate follow-up to what happened, or are they still going to be just as angry?

   9. CWChris Williamson46:54

      Ultimately, I think what-

   10. SCSpencer Cornelia46:54

       That's an incredibly challenging question.

   11. CWChris Williamson46:56

       Ultimately, what people want to see is someone that

7. 46:58 – 54:40

   How to Endure Media Scandals

   1. CWChris Williamson46:58

      looks and sounds and genuinely is sorry about what's happened-

   2. SCSpencer Cornelia47:02

      I agree, by the way.

   3. CWChris Williamson47:02

      ... what's happened to everybody. Like, you could give the money back and do all the rest of it, but if you don't have genuine sympathy and sorrow for what, what's gone on... But on the other side of this, man, like, I understand that it's really cool on the internet to throw shade at these guys. And Tom's been on the show before and I like him. I think he seems like a cool guy from however much we've spoken so far. And, um... I don't know. It's like a fucking... It's a hard, a hard situation for them as well. Like, they didn't want-

   4. SCSpencer Cornelia47:26

      We're all dealing with this together. There is no standard, right?

   5. CWChris Williamson47:28

      They didn't want... So, they, they didn't want this to happen, right? I understand that. I do think that a lot of the ire that's on the internet at the moment is justified. I also think that it's a really fucking important learning opportunity where you go, right, maybe all crypto stuff should just be... And anybody, it should be completely off out of the, the purview of a good ethical influencer or creator. And anybody that does immediately raises a red flag as like, "Look, this person's pushing something that shouldn't be done." Maybe there's a question around given how many Save The Kids token NFT pump and dump things. The argument on the other side of that is, have we not already learned this fucking lesson? Like, how long have people been dicking about in the decentralized finance space and there's been rug pulls and there's been all sorts of other stuff? Surely someone should have realized before now that being involved with this is putting your audience at huge risk.

   6. SCSpencer Cornelia48:28

      Yeah, I totally agree. By the way, the... I think the most fair criticism that, funny enough, I haven't really seen being thrown out is that the YouTubers in question almost all universally follow sound investing principles, which is match your 401 (k) , get a good job, invest in index funds over the long haul, invest in real estate. These are all, like, reasonably safe and just proven over time. And then to promote crypto-... even though their portfolio might have contained a small amount of crypto, so it's like, "Hey, I use this exchange for 5% of my portfolio is crypto." I do think a lot of the ire and the anger is coming because their, their reputation, their brand, their investing strategies has all been one way, and then they promoted this highly risky asset class and possibly influenced people to engage in investing strategies that they don't follow, right? Even though they might say, "Hey, inves- only invest 5% in crypto," maybe people put 100%. And I think that's where a lot of the anger comes from, because I would almost guarantee, I haven't been able to prove this, that crypto YouTubers who are probably promoting FTX and are like the degen, you know, this like cool, like degen, "I'm going all in on Dogecoin." If they promoted FTX, I can almost guarantee that their audience didn't turn on them, because that's kind of baked into their brand, "We're going all in on this stuff."

   7. CWChris Williamson49:43

      Oh, everybody already expected that they were a piece of shit?

   8. SCSpencer Cornelia49:47

      Yeah, I wouldn't say (laughs) I wouldn't say piece of shit, but just like some of these cultures is just, "I'm going all in on the next, the next 1,000x coin," and it's all kind of part of the gimmick, right? It's kind of like, here- here's an interesting scenario. So if I'm, if I'm a degenerate gambler and I'm all about playing slots and I talk about like, "Hey, with $500 a month extra, I just go play slots. And like over time I'll probably lose. By the way, this is the best casino to play at." I don't think that's unethical because your brand is about playing at casinos. However, if I, being the guy who's like, "Be safe with your investments, invest smartly," if I all of a sudden started promoting a casino, I think it would be appropriate for people to come at me. And you're promoting the same thing, the same service, the same product. Why does one audience deserve to attack the creator? Why does the other not attack the creator? I think, I think my theory is that I think this is part of it.

   9. CWChris Williamson50:39

      Yeah. I, I'm not convinced ethically that that's right. But I think in reality that's how it would happen. That people-

   10. SCSpencer Cornelia50:44

       Yeah.

   11. CWChris Williamson50:44

       ... people just look. I'm, I'm not convinced (laughs) that, uh, Tom or Graham are going to take solace in the fact that their highly regarded brand position is the only reason that they're getting as much kickback as they are at the moment. I don't think that's gonna make them feel g- very good. Uh, although i- it kind of is like a, a backhanded compliment in a way. I also don't think that it's necessarily going to make the people that are complaining at them feel any less virtuous about complaining. The... Basically, the... Situations like this, it is almost impossible to turn down the, the volume. It's basically just not going to happen. So if it was me, if one of the guys was like, "What do I do?" Another friend of mine, True Geordie, at the moment, man, I don't know whether you've seen, that guy has been fucking unpersoned from pretty much everything that was earning him money. Gymshark dropped him. Myprotein dropped him. Poker, PokerStars or Poker.com dropped him, and then he got banned from Twitch. All of those gone, completely gone. And, uh, if I was to give advice to any of those guys, it'd be like, there is no way of speeding this, this situation up. Put your apology out, make it sincere, uh, which was criticism that True Geordie had with his first one. He put this apology out and then at the end of the video did like a, "Don't forget to like and subscribe." Which I'm like... Even though it was done in a semi-jokey fashion, I was like, "Oh dude, come on. Like, the optics are not good here." Um, put your apology out and just wait. I- I-

   12. SCSpencer Cornelia52:06

       I agree. What's, what's unfortunate about media kind of qui- and by the way, media scandals is almost like pretentious, as if we're that important. This is such like a, a two-week thing. But anyway, I think when you have scandals and what makes it so challenging and what makes someone look like they lack empathy is that truly the best way to do this, the best way, is to move on as if nothing happened. Because when you have an angry mob, they're super emotional, and no matter what you do is a loss, right? So unfortunately, the best case scenario is just to move forward. And I'm, I'm not saying pretend like it didn't happen, but you just move forward and you don't address it.

   13. CWChris Williamson52:41

       You think?

   14. SCSpencer Cornelia52:42

       Yeah. I- I'm not, I'm not saying the best as far as creating the audience or keeping that relationship with the audience, I'm just saying in, in media scandals, in almost all scenarios, what do lawyers tell you? Don't speak. You just move on. You have to let the fire go out, because...

   15. CWChris Williamson52:58

       So I, I think that from a, a legal perspective, that might be right. When it comes to this new world though, when you have a vacuum of information, it sucks in speculation. And that speculation-

   16. SCSpencer Cornelia53:07

       Oh, 100% agree.

   17. CWChris Williamson53:07

       ... that speculation causes absolute fucking havoc. And you look like an- a complete dick if you just roll forward with, "The new earnings report from Apple is out, and here's four reasons why it's whate-" Like, no, no, no, no, hang on, hang on. There's this, there's a huge FTX 10 billion sized elephant in the room. Like, we need to deal with this. If it was me, I would say, "Look, just I, I think now is not the time to post any new content." Get the apology out there, wait for a while for everything to calm down. Maybe come back and talk about what you've learned. Uh, make some statements about how you're going to change going forward. If you were to say, "I'm never going to work with another crypto exchange again. This is a promise that I'm going to make to you. This is a lesson that I've learned. This is a duh-duh-duh-duh-duh." Like, look, how have you changed? This is what you said. People want to see change in terms of behavior on the other side of this. It's early to say-

   18. SCSpencer Cornelia53:54

       By the way, I totally agree. I try- I tried to separate those two, by the way. I think the best thing to do in almost all scenarios is just move on, like selfishly. Because what happens is if you, if you start addressing things, you might bring up another angle and then people will make videos about that. And you, you're re- you're rekindling the flame. So my point is that if you just move on, like, like let them have their moment. They'll have three days to make all the videos about you, and then they'll have to move on to something else 'cause they- they're just gonna regurgitate themselves. But in, within this space, I'm saying with creating a relationship with your audience, what you said is, is the best way. So I, I entirely agree. And it's unfortunate because you have to go through that pain period of like, "Yo, I messed up." Or you, you take a week off from making videos, which is a hurt, you know, albeit small, but a hurt to the income, a hurt to the views and all that stuff. Yeah, I, I agree.

8. 54:40 – 1:02:06

   The Future of Crypto

   1. CWChris Williamson54:40

      What do you think this means for the future of crypto? It was already something that people were hugely skeptical about if they weren't in it. It is... Yep, you. You were the one that was hugely skeptical about it. Um, it seems to have been over the last 12 months just a calamity of errors. ... faceplant after faceplant after faceplant of things that would make someone that had even good faith lose faith, and someone that was skeptical say, "Never for me."

   2. SCSpencer Cornelia55:07

      I feel validated, to be honest. That's the-

   3. CWChris Williamson55:10

      Are you smoking at the moment?

   4. SCSpencer Cornelia55:11

      ... and I hate it because y- people lost money. And so, when you feel validated when people lose money, it's like never fun. However, I was saying a year ago, invest in real estate, don't invest in crypto, it's at a bubble. Please be careful. Like, there's going to be a small subset of you that crush it in crypto, and you guys are awesome, but 95% of you should not be touching crypto. And when it's popping, you look like the idiot. And I took a bunch of flames for probably a month. NFTs, crypto, I made a video like, NFT markets, or the NFT bubble's about to burst, right? And I made these videos and people came at me, ugly comments like, "Oh my God, Spencer's an idiot. I made so much money." Well, a year later, and, and I said in the videos, I said, "In a year, I'm going to have significantly higher net worth than the people who are big into crypto." And other than the, you know, the 1% of people who figured out and they, they trade and, and they're excellent, you know, 90% of you, I'm going to have multiples more net worth. And it came true. So that's the validation part. Now, ego aside, I think it's very unfortunate to see so many young investors lose money. I think a lot of young kids were persuaded (laughs) very accurate, uh, to this conversation, but persuaded, influenced into crypto from TikTok and Instagram. And I'm, I'm the guy on the side saying like, "Yo, these are not, this is not a good investing principles. This is all gambling." Some of you are going to win, most of you are going to lose. And I, I really hope that young investors don't lose sight of like what investing is because they're taking a punch early. I'm fascinated to see how long the market lasts, this bear market, because I think crypto is going to be wiped out for three years. And I think what is going to also happen is that get rich easy mindset is gone, and so all these people that were coming in and gambling, all that liquidity is gone. Are institutional investors gonna pour money in now? I don't know. May- maybe they do, and that, that will combat my argument. However, if a lot of retail money loo- it, it no longer enters, how is crypto going to survive?

   5. CWChris Williamson57:02

      I, you still-

   6. SCSpencer Cornelia57:03

      Also alt coins. How do they survive?

   7. CWChris Williamson57:04

      Yes, but I don't think that you can underestimate the power of somebody believing that they can get rich off of absolutely nothing.

   8. SCSpencer Cornelia57:15

      Very fair.

   9. CWChris Williamson57:16

      Right?

   10. SCSpencer Cornelia57:16

       Very fair.

   11. CWChris Williamson57:17

       Mi- uh, Mike Winnet's, uh, intro to his old contrapreneur thing was the people that got the richest during the gold rush in the 1800s weren't the people that went searching for golds, they were the people that sold the shovels.

   12. SCSpencer Cornelia57:28

       For sure.

   13. CWChris Williamson57:28

       For as long as there is an incentive for someone to tell you that you can get rich, they will find a cognitive bias or a neurolinguistic programming way of writing the correct piece of website copy or getting the correct influencer at the right time with the right script to put the right video out, and the l- number of people that are going to continue to fall for that because this one's different, I think that there are unlimited lives on that. There is a unlimited number of times that that same formula can be used. Is it going to have to look different? Yes. But there's a, uh, literally infinite number of ways that you can combine words on a page. So...

   14. SCSpencer Cornelia58:04

       And how powerful is that too, by the way? So like, yes, I agree, you know, that will be influential and there will always be people that sign up for a course on how to get rich in, in six months. H- how many people fall for that is always the question, right? Because if a lot of people do, then yeah, th- there's going to be liquidity in every little dog poo Inu, uh, zombie Inu and stuff, it's just going to pop up, right? But once all that money leaves, once all that little gambling money leaves... I don't know.

   15. CWChris Williamson58:29

       Oh, so what you're saying is that because there's going to be less capital to support these projects, there is going to be less places for people to waste their money?

   16. SCSpencer Cornelia58:38

       Yes, exactly, exactly. Because a lot of these projects succeeded because the, the velocity from the start was so powerful, right? They get a bunch of people in the Discord, you'd have 1,000 people sign in, and th- there was no liquidity. So if you put it at ten zeros one, I don't, I don't know what number that is, right? So if, if $1,000 enters into the coin, it all of a sudden the market cap's $1 million or whatever, th- you get a Discord full of 1,000, 5,000, 10,000 people from Twitter and Instagram and all this, and, and marketing shout outs, and then all these people put money into the system, it, within that, the first 24 hours, the coin spikes, and then all of a sudden it attracts more. Well, what happens when all of those Discords don't exist? What happens if there's only a couple and the money is really not that good and the, the early spike is not that great and people don't make money and then they're like, "Eh, I'm not going to be in the next project."

   17. CWChris Williamson59:26

       Think about it like this. Think about it like, um, each five to ten year, uh, miniature generation that is thinking about investing needs to learn a lesson of pain in order to ensure that someone that has the predisposition to a get rich quick scheme gets burned so that they don't lose tons of money. Treat it like a, an inoculation, right? Like, this is a small loss. And for some people it's going to be entire life savings, right, that they had absolutely everything in FTX and that's now gone and it's gated and they can't get it out. Like, awful for those people. For a bunch of other people, it's going to be smaller amounts, right? Large portions perhaps of the net worth, but an amount which is recoverable as far as they can... they, they will move forward. And that means that in future they're going to look at investing in a different way. I... Because I think that the fundamental desire to get rich easy is never going to change amongst humans, and the incentive for the people that want to capitalize on those people is never going to change, I think that you're going to just continue to end up with this same repeating cycle every 10 years or every 5 years over and over, and it's just going to be an inoculation each time, and it's going to be a new cohort of people that come in. And e- every time that it happens, they go, "Fa... Who could have seen this coming?" If you'd spoken to somebody that was 10 years older than you, maybe they could have told you about the .com bubble or the housing market bubble or the crypto bu... or whatever it is. Like, pick whatever the thing is that you want to get your painful lesson from, and I think that consistently that... That's the only way that this can happen. And there are people that have a disposition like mine, like t-I have played about with small amounts of money, percent, single digit percents of my net worth. And the rest is in real estate and in the S&P. And that's it, right? Like, and I've spoken to, I don't know much about finance, but I've spoken to Morgan Housel a fucking ton. And I spoke to the guys that did, uh, uh, Just Keep Buying. Who was that? Um, Justin somebody, somebody. Anyway, wrote a great book. Uh, my point being, minimum viable strategy when it comes to looking at investment, there are a ton of people out there that will do that. The number of people that are always going to be susceptible to the other type of investment, I don't think is going to change.

   18. SCSpencer Cornelia1:01:41

       That's very fair. I think you're, I think you're absolutely right. And it's why we've seen so many iterations of the fake gurus in, like, six years, right? You had, first off, the fake guru courses. Then you had these automation services, YouTube automation, then you've got crypto and NFTs. What's next? I don't know.

   19. CWChris Williamson1:02:01

       Have you seen-

   20. SCSpencer Cornelia1:02:01

       But either way, I, I have a career out of it. (laughs)

   21. CWChris Williamson1:02:03

       That's, that is true. You have been able to call them out.

9. 1:02:06 – 1:12:13

   Finance Influencers Who Only Care About Money

   1. CWChris Williamson1:02:06

      So, one of the interesting dynamics that I've seen is, uh, Do Kwon, Martin Shkreli, BitBoy, a bunch of other people, every previous generation of villain has celebrated the, uh, now more en vogue foe of SBF being the current villain that everybody wants to have a crack at. Like that's been so in- it's like, uh, Martin Shkreli did a, a, a podcast a couple of days ago saying to Do Kwon, like, Do Kwon was on there with him and Shkreli's saying, uh, "Jail's not that bad." And you're like, (laughs) wow. Like it's just, it's so fucking fascinating to see this, uh, like fucking suicide squad of-

   2. SCSpencer Cornelia1:02:47

      You wanna know why this stuff exists? What punishment did Martin Shkreli really have? And let me ask you an ethical question, one that's really tough. If you're 24 years old and you're smart enough to understand that you can make $10 million in 24 months and the risk is reputational harm, you get slandered in the media, and you go to jail for two years. But you come out and you have all your little investments, you're smart enough to put your money elsewhere so, like, people can't come after it, so when you get outta jail, you got it. I'm not saying I'd do it. I would never do that. However, there's enough people in this world that care more about money and they'll make money at the expense of others, risk jail time, and in some cases serve jail time, but they know the way our system works is in two or three years when you're out, you now have the, uh, you now have this, like, big persona, which Jordan Belfort has now been able to turn. Like y- you, if you go through the redemption arc, you now have the, you have massive audience already, and then if you just go through the redemption arc, you can actually capture, like, 80% of those people. So anyway, but then you come out and have a bunch of money. There's this guy named Bam Akeeva that I've gone after, and this guy, like, stole, uh, who knows how much, millions and millions of dollars, he scammed them from credit card, uh, fracking I think is the word, word they used. He goes to jail and comes out and buys Lamborghinis. And so these guy... What a lot of people have figured out is that you commit all this fraud, white collar crime, of course, you serve two year- two or three years in jail, at worst, and it's not in county prison, and then you come out and you've got massive amounts of money stored away, and then you just live the rest of your life however you want. I hate, I hate it because I think that's ethically bankrupt. It's awful. However-

   3. CWChris Williamson1:04:17

      So-

   4. SCSpencer Cornelia1:04:17

      ... enough people are willing to do this. What I'm getting at is I, if we lived in a system where these people were, their lives were ended the second they were convicted of this, how many times would we see this happen? My guess is it would reduce probably 90%.

   5. CWChris Williamson1:04:31

      But what you're looking for with the justice system is not vengeance, right? You're looking for justice. Uh, uh, it-

   6. SCSpencer Cornelia1:04:37

      Right, right.

   7. CWChris Williamson1:04:37

      People that have lost all of their money, they might wanna see this person beh- I'm pretty sure that I saw a, "SBF should get the death sentence," was trending on Twitter earlier on.

   8. SCSpencer Cornelia1:04:47

      Yeah, sorry-

   9. CWChris Williamson1:04:47

      You know-

   10. SCSpencer Cornelia1:04:47

       I'm go- I'm going to the extreme. I don't, I don't know my opinion on that. But, like, I'm going to the extreme to prove a point. Like, for instance, if you, if you drove after drinking one beer and you got caught, and the punishment is that you no longer have a YouTube channel, you can no longer put out content online, and you will serve 10 years in jail, and you are unable to have a woman visitor to, uh, you know, have fun. As a guy, would you, would you drink a beer and drive? I'd like to think that you would, uh, you would, even after a beer, you would strongly consider asking for a ride or taking an Uber. Right now, I feel like the punishment for all these crimes is so minimal that the only thing we have is media. The only thing we have is like, how can we at least somewhat try and prevent this? Which is funny 'cause that actually counters the entire argument, which is like, then what happens when the influencers influence you to be a part of the scheme, right? But, uh, anyway, we live in a system where, uh, I'm going through a lawsuit right now and, like, the, the amount of money you spend on legal fees for something so minimal is just, it's so insane that we live in a clown world in a lot of ways. And it's very unfortunate. And I think that's why a lot of these schemes happen.

   11. CWChris Williamson1:05:47

       One of the interesting things you've got is how much somebody values money and how much somebody values perhaps their freedom or their time or their reputation or whatever it is. So, a problem you encounter is when you have somebody who doesn't value their freedom or their time very much, but values money massively. Because for that person, going to jail for five years, for 10 years, for 10 mil would make complete sense. Whereas, you know, if you were to say, "Would you go to jail for 10 years to get $10 million or $1 million?" Th- there would be a huge bunch of people that would say no. And what you have are, um, differing levels of priorities. And what you need is like a fucking bespoke judicial system that works out how much pain a person is going to pay individually for that particular type of freedom that's being taken away from them. And yeah, I, I think that you're right. There are people out there for whom material wealth is so high up on their list of priorities that they would be prepared to pay pretty much any price in order to get $10 million bucks. Uh, and for those people, yeah, you know, two years in jail and then a, an ankle tag for a little while-

   12. SCSpencer Cornelia1:06:52

       It's a, it's a fair trade-off.

   13. CWChris Williamson1:06:52

       ... doesn't feel like much. Yeah.

   14. SCSpencer Cornelia1:06:53

       It's a fair trade-off.

   15. CWChris Williamson1:06:54

       Yeah, precisely.

   16. SCSpencer Cornelia1:06:54

       And that's why a lot of fake gurus exist, by the way, is because they value your $1,000 for their course over customer satisfaction. The, the stuff that a lot of the, the real bad fake gurus do...... it's very clear that they very much value the small amount of money they make per customer, the thousand bucks or whatever. They don't care about their reputation, they don't care about screwing the person. They'll take the money and th- they'll never give a refund. That's how they're able to make their money. How do you stop it? You can't.

   17. CWChris Williamson1:07:19

       Another interesting element of all of this is the effective altruism movement. So, this is a charity, a very advanced charity, that looks to try and maximize the effectiveness of any money which is donated to it. Uh, m- a lot of people have heard online about the bloat and the sort of uselessness of many charities out there, that it's basically being spent on expenses and a bunch of other things, and it's just a, a marketing campaign that allows executives to live a nice life and doesn't really make much real world impact. Effective altruism is a part of long-termism, which was started by Will MacAskill, who's been on the show. Uh, Will's having a super, super bad time of it at the moment because Sam Bankman-Fried was the single largest donor to that. His plan was to donate almost all of the wealth that he generated. He was planning to earn to give, which is make as much money as is possible and give it all away to the most effective charities. The really fucking interesting question that needs to be asked is, from a utilitarian perspective, is it ethical to con people out of money in order to give that money to causes which are more worthy or would make better use of the money than the people that originally had it and donated it? Like, i- uh, do the ends justify the means is a fucking, for me... And remembering that the EA movement is all about utilitarianism, rationalist perspective, all that stuff, that's a really fucking difficult question to answer.

   18. SCSpencer Cornelia1:08:44

       Are humans even capable of answering this one? That's like so challenging, right (laughs) ? I think my mind immediately goes to, if there's, if there's victims in anything, you try to avoid it at all costs, right? So my, my mind goes there. So we've got, okay, you just explained, there is a victim. You take $1 from person A, you give $2 to person B, and somehow they're able to create a system where everyone benefits more, maybe at the expense of one, but five people are benefited. It's, uh, you know what's a really fascinating thought exercise for this, is the, it's the why train, where, like, if, if the train goes down one path, it, it-

   19. CWChris Williamson1:09:14

       Trolley problem.

   20. SCSpencer Cornelia1:09:14

       ... takes away one person, or, or whatever, you know, and the other one's, like, five people but it saves a kid or something. Like, yeah, it's like a, a moral dilemma that's so incredibly difficult to answer. That's so fascinating, man, because then I think the counterargument people can bring up is, "That's just how our system works," is like in almost all scenarios, you're, you're taking from someone and giving to others.

   21. CWChris Williamson1:09:33

       Dude, I have a friend-

   22. SCSpencer Cornelia1:09:34

       That's, that's old capitalism to a T.

   23. CWChris Williamson1:09:35

       I have a friend who believes that everybody is someone's exit liquidity.

   24. SCSpencer Cornelia1:09:41

       Wow.

   25. CWChris Williamson1:09:41

       Everyone is someone's exit liquidity. That's how he sees humanity.

   26. SCSpencer Cornelia1:09:45

       Right.

   27. CWChris Williamson1:09:45

       I'm someone's exit liquidity, and so are you, and so is he, and so is the person that's watching.

   28. SCSpencer Cornelia1:09:48

       Yeah, we buy real estate, right? We're the exit liquidity from the previous owner. They're able to cash out-

   29. CWChris Williamson1:09:52

       Everyone is someone's exit liquidity.

   30. SCSpencer Cornelia1:09:53

       ... and made a bunch of money.

Episode duration: 1:18:17