him trouble, those troubles i saw in preparation to cutter cameron's national team are playing it friendly match against jamaica players. even referees are warming up to the reggae songs of bob marley. ah, fans enter the stand. it feels like a carnival, some dressed up to bless their team before their departure. others excited for the event they wore like lions? ah! it is a display that catches onlookers even the media's attention. after all caught her 2022 is also their world cut. messy group, who, oh, so much of football is less about what's happening on the page. but what's happening off the page? it's an opportunity for found to be creative and celebrate their team. most cameron's won't make it to the gulf country. those that are like body painter and gondo pick it, have celebrity status. they are as famous as the football players on the pitch

inspiring legions of fans to put the paint on for the team. and for the occasion, nicholas hawk al jazeera yo and day come rude. ah, it scripts every with a solo, adrian, so they get here and know how the headlines from al jazeera talks are underway. barley between u. s. president jo by been on china's lead a. she's in thing, it's fast in post meeting since 5, and came to office leaders of the world's biggest economy. so they want a frank discussion on issues that divide them as the leaders of our 2 nations. we share responsibility my view to show that china and the united states can manage our differences, prevent competition from becoming anything, every near conflict. and to find ways to work together on urgent global issues. a

require mutual cooperation. and i believe this is critical for the sake of our 2 countries and the international community, ukraine's president says, visited the castle region. just a is out. there is forces we took part of it. russian troops fled the regional friday. a lot of me, zalinski has since accused russia of committing war crimes. he spoke with soldiers and locals, jury a visit to cass on or off. we don't believe russian. they're drinking with all the well, that's why we have to wait for. we're ready for our 3, it's for our country. it's our country all over the east african leaders have and i was talks aimed at stopping, fighting in the democratic republic of congo. the discussions will be held in kenya on november 21st. it comes as congolese forces battle rebels for control of land

between kibble and regarding it's the closest the rebel group. m $23.00 has come to the regional capital since it began it's offensive in march. the u. k says it's working to secure consumer access to an activist. jailed in egypt. a lot of alpharetta has been on hunger strike since april. he's now started to drink water after refusing to do so. we could go. the british egyptian activist was accused of spreading false views. and those are the headlines on ours here. we'll have much more news believe after today's edition of inside story, which is coming up next. ah, what future crypto caress is, have after the full of f t x,

the exchange platform has filed for bankruptcy, leaving thousands of clients in the dark. the immediate fall out was a sharp fall in the digital currency price. so what does this collapse mean for the industry and his investors? this is inside story. ah, hello and welcome to the program. i'm hash an abala, one of the world's largest group to exchanges, as it's investigating hundreds of millions of dollars of unauthorized withdrawals, another se, millions of dollars worth of assets have been moved from the platform. after max file for bankruptcy on friday. it says it wants legal protection as it looks for ways to return money to customers. former boss sam, bank man freed,

has stepped down as chief executive kept prices have been sliding all year by the collapse of f. t extends out the platform had earned the trust of more than 5000000 users worldwide. and traded more than $700000000000.00 worth of crypto last year alone. cut her caresses have seen an explosion in popularity assist rising to providence in 2009. today, more than 20000 crypto caresses are being used. thus more than double. those in circulation last year, some of the major ones include bitcoin and ethereal. last year the jointly made up more than half of the crew to market. the digital currency emerged as an alternative to money free from the control of governments and central banks. they run across a network of computers and are under penned by block chain technology by the industry has its challenges. bankruptcies have come fast and furious since the

middle of this year. the industry was once valued at roughly 3 trillion dollars. it's now worth about 900000000000. ah, now lets bring in our gas in los angeles. robert cap is the chief executive officer of g economics, a global economic and strategy advisory firm in singapore. then and capron is the founder and director of corporate asia, an independent research and consulting firm focused on the asian financial services industry in london. glenn goodman is consultant to the finance investment platform . it's thorough and author of the crew to trade or walk up to the program. gentlemen, i would like to unpack with you exactly what went wrong with ts and m is thought with you, mr. robert, what do you think was the main trigger for the collapse of f t x governance and in

a single word i, it says that everything started rattling. of course, there was a lot other problems going on prior to this, but just a week ago i, it was revealed in a report that the f t x exchange had been secretly shoveling funds and alameda research, a 2 entities owned by the founder. i stand by men freed so it that, that's when it comes down to bad governance. it seems almost non existent, oversight zed and so is the secret transfer of a customer's funds from f t x all the way to alameda. another company owned by a, by miss a free, do you think that was a truck traditional case where people suddenly freak out decide to withdraw their cash. the company cannot really handle the rising demand, and there you go. the same crashing scenario. sure. i think, you know,

over the past couple months we've seen a number of notable classes in the crypto space and so i think people are very aware of where there is smoke, there's probably fire. and so even when the 1st discussion problems came up, we started to see customer. and certainly that was a large part of the problem. but one of the biggest challenges is obviously the way that they were using customer funds because it appears that they were putting it in to essentially what, what banks to, to a certain extent with fractional reserve and, and actually finding it out into much higher risk product category then we would expect to see an exchange used for something like that. so i think it was a combination of multiple errors, but certainly the customer funds was not helping the situation. glenn, in this particular industry, the fact that she try to cushion against any losses or having an issue of liquidity, or transfer cash from a company all the way to another one,

which she own. well ethically speaking, is this something which is legitimate or no? well, we don't know all the facts yet, and of course it depends partly on the jurisdiction where a company is based. and as we know, f t x is an offshore company. it's not american, it's not european. it's based in antigua and the bahamas. so the question overly galaxy will be looked at and certainly the americans are sort of flexing their muscles, the c c a getting involved, even the justice department might investigate. so we'll see what kinds if any, legality was, was committed. but you know, legal questions aside in terms of the ethics of all of this, what i would say is it seems like sam bank and free chris had that classic era of doing want to chorus did flying to close to the sun and getting his wings burned we saw over the past couple of years,

this guy rise from seemingly nowhere. nobody had heard of him a few years ago. and then suddenly he's on the stage with bill clinton, tony blair, which is a bunch. and he's being hailed is one of the greatest philanthropists of the modern era. and nobody even heard of him 5 minutes early. so, you know, even while i was watching those things, i was thinking, this is a little bit strange on rice. so incredibly quickly how do these exchange become so enormous? so quickly and allegedly, it seems like the answer to that will be using huge amounts of leverage to grow much more quickly than would organically be the case. robert in trying to understand the economics of crypto currency, the fall of disk, or the fall from grace for sam or bank man fried. is this something that has to do with the way has been running the company or is it also different access? particular the seo of buying and so initially said who was willing to bail out of

the company and then decided wait a 2nd. i'm not going to go for the deal or just that answer itself. you trigger this? yeah, massive reaction. well, there's a lot with objects. i like what the previous this constant mentioned how you've got someone who did kind of come out of nowhere. he does have a silicon valley pedigree. his father, a professor, bank man, is well known legal and business scholar at stanford university. and in fact, that's one of the things that the people now piling on to the company asking for answers are hoping that family might exert some pressure here. but you did have an interesting class of personality. so sam, banker and fried s b f as a, he's the known and tank pung dow c z. you had these 2 kinds of acronyms, different personalities bagman breed was kind of more of the relax guy. he had testified before congress. he was seen as, it's the most sort of reputable,

i guess you could say he was, it was easy going. he speculated he'd be able to buy out goldman sachs another year just other element to this rise from obscurity into, you know, being the world's biggest bank in the financial world. ah, at least of the investment was the notion there. but anyway, yes, there was a lot of class of personalities by you know, the, the move by c z and finance to simply walk away from the deal without explanation. it did create that run. i guess i would go back and say, well, that was all rooted in governance good points also that you know, the scc and others want to get involved as a realizing what a mess this is as a huge money for us investors, but it's really a mess for global investors that and this has all the components of an american sag because just overnight and in pile, fortunate, reputation, all ever rated. but when you look at the detailed lease is really quite interesting . the clash between the 2 titans, c, z and and s b. particularly when it comes to the moment when caesar decided that he

is going to look into acquiring f t x looks into the balance. she said, that is a massive black hole here. he twits saying that i'm pulling out and we know what happened later was this, and that sounds bice easy to undermine the man who has been saying, who was biting him for quite some time. yeah, it would seem to indicate that way. i mean, when we look at how dog changes are kind of proving their balances, there's no simple way of doing it. you know, i think what we've seen in the past couple of days as well. it since f t x really kicked off as a number of the other crypto exchanges claiming their proof of funds. and there is actually some questions about how they're doing that in terms of, you know, we see a lot of large transfers that are moving between fund or between crypto exchanges, which could indicate that they're actually pulling funds to kind of prove their reserves. and then they're moving their funding to a different exchange. so indicating

a certain amount of collusion within the exchanges. so there could be other things that are happening around there. but this is, this is certainly something that's been there for a while. and as we discussed earlier on, you know, i think when we look at the positioning that had, and as you know, he was, he was kind of seen this remarkable individual in the space. and it's taught for a lot of people to have that proven wrong. but that really seems to be the case because a lot of the that were made must have been done over a course of time that really caused this to cause these issues and caused the claps . glen. we'd like to understand what does it mean when f t expires for bankruptcy? what does it mean for the company itself and for the customers and for the massive black hole? something like $9000000000.00. well, the 1st thing i'd like to address is that previous point i'm the problem is that when with proof of reserves as the then on was saying is that

you just get a snapshot. so it would be interesting, it would be good to see some of these exchanges showing their reserves in real time, and that was kind of hinted at by see that i think so, it would be nice. you know, if we could see a real time over time, then nobody would be able to do any clever shenanigans to do with moving money from one place to another and then back again or anything like that because we don't see it happening when you just have a proof of reserve snapshot one moment in time. then obviously, you know, a company, i'm not indicating any company, but i'm just saying hypothetically, they could bump up their balance sheet with assets as dental saying, and then move them somewhere else to another state. and then they could do that natural, we don't want to see any of that we want. we want sort of convincing proof would be wonderful. as for the bankruptcy, i'll just address that very quickly. this is going to be a long price is of course these things always are gonna work out well. asset they've got what liabilities, you start to find out what companies might be owed money by f t x. so then we can

find out what kind of companies might actually be in trouble, because obviously the entire market, bitcoin everything, all the price has been pushed right down by the uncertainty of not knowing exactly where the liabilities are at, which companies might be in more trouble. than others as a result of but having in the linkages with f t x. ok. robert? usually when you're filed for bankruptcy, there's always this understanding that potentially looking forward to see someone coming and bending out for the company. the x has a new chief executive john j array of the turnaround specialist. what can he offer? what can he do? except for perhaps asking the american support or more, or of an aggressive regulatory apparatus to put an end to what's been going on with the crypto land. actually, that's probably going to be the long term. and i honestly can't answer the question in terms of what's going to happen is bankruptcy. or, you know, john, j is,

is well known for restructuring enron. and that, that was much very structured. that's more of a clean up. we saw this similarly with layman brothers. so often these sorts of bankruptcies, you know, there's so little left that there isn't a lot to necessarily restructure other than to get the platform kind of in order. i suppose the infrastructure and those asset hard hard asset parts of the company might be valuable to some others. there apparently was an investment bank at one time. well indeed, even bias was looking to buy out f t x until they found out all these issues. but i think in to your point, yes, the long term implications are likely to be more regulation. so that will probably be the biggest impact to come out of this. the investors who put their money in depth it's, i think they're just wiped out. all right. then and i would like to see now what would be the reverberations of what happened to f t x across the whole crew to currency spectrum. what is going to happen next?

it is still going to be the same period. heather has been dominating the news over the last few years. i think the that's the biggest question is where do we, where do we go from here? and i think, you know, when you look across any of the players in the space it's, it's not good, right? so, instituting on players that have been moving into the stage are likely going to be thinking things, you know, you have a lot of certainly here in singapore, you have a lot of private wealth managers that were moving in and investing client fund interviews and some of them may have been using f t x custody or some of those outside for trading. you know, other institutional players that were just seeing what they could do in the crypto space. it does really set us back in many ways and, and for retail investors, you know, i can just stick with what we've seen on the ground here in singapore. obviously there been a number of exchanges. finance included that were pushed out of singapore because they weren't fully licensed and want to go through that process. and so when by man left the f t x in many ways is very similar in terms of the breadth of coins that

they offer. the trading mechanisms and products that are available on that. so many people move to f t x. and now, you know, now their money is gone. so there was a significant retail base in asia, not just singapore, but taiwan. many, many large part of the losses there were extra in taiwan and, and that really roads retail confidence. so where we go from here is, is really up in the air, but it's, it's certainly not a good sign. and it's really kind of push the crypto industry back by a period of time. many people have said years, potentially, glenn, if the greatest strength of a curb to curb, as it was basically this whole idea that a distance for life financial system is going to prevail in the near future and was just put an end to they had gemini, or the sensor bags and, and governments, when you look at the very last few days, bite after the collapse of f t x suddenly have those stories about someone trying

to $5.00 and $370000000.00 out of the accounts of f t. x could be a hacker, be an inside work, then more revelations, about the accounts in the bahamas being used by people all over the globe to try to salvage what the can do. don't you think that could this is something that could push the world to think about the way this industry has been going because up so there's absolutely no trust here. it's. it's so frustrating from you know, speaking as somebody who's been involved in the crypto world for many years now and believes that the sudden i believe that the centralization are using block change can often be an extremely positive development. it is some frustrating to see the industry being industries, reputation being really damaged by this centralized entity, f t x. a central company run by

a billionaire with big ideas. it's like totally antithetical to what credit the currency was supposed to be all about in the 1st, by who's basically getting away from this whole billionaires running things and doing all kinds of secret things that nobody knows about. that was, if you could tell it i find it really annoying and but ultimately the silver lining is. this was just a trading exchange, right? it's somewhere it don't. it's not correct. the currency itself, it's the place people go to buy and sell credit cards and only one of the places you know, there are lots of other trading exchanges as well. so yeah, it's frustrating because it was such a big company. and so many other companies were taken in and lent money. i'm, you know, there are all kinds of linkages and it all has to be unraveled. but by the same token, this isn't what crypt currency is for. decentralized finance is the future as far as i'm concerned of people transferring critical axes, backwards and forwards, and that involves smart contracts, not billionaires in charge. okay,

robert on this very idea, i'm just picking up from where glenn has left, which is curb to currency has been describing itself as the path to more equitable financial system. some sort of a far west a well, we don't have the traditional financial titans taken over by you end up having c z and you're having s b f and many others who call the final shot, which is anathema to what they preach initially. now. yeah. what, what glenn was, you said, is it certainly correct? i read it it but, but did this brave back the whole problem, i guess is that maybe it's an element in that that the rest of the world starting with investors, individuals, institutions. the whole financial system needs to get used to this idea of what we call d 5 d center, eyes finance. and that's not easy to do. and any d, the huge already is these personalities. i mean, we see this is with the notion of big tech. eli musk,

who hasn't proven to be so genius like when it comes to managing a relatively straightforward social media platform. granted, its issues were complex, but anyway, i e can revolutionize the auto industry but, but he can't manage of a preexisting. i social media platform. it all gets back to what we're talking about here, and that is in this new territory we, we gravitate to these larger than life figures. we, we want this sense of stability where we're not use, defy the whole idea of div i block chain distributed larger. and in all the transparency also, it's again, i go back to governance, the transparency inherent in. that means that there has to be this whole notion of, of peer to peer of equal exchange. and that it's, this hyper efficient mechanism of capitalism that we're talking about, which is, hasn't existed, we've always had big, you know, players, dominance monopolies or monopoly like behavior. and so that's the issue. i think

people aren't able to win themselves out of that old mold of thinking. and so we get these people who then do bad stuff. ok, xannon in the capital land, you would have people trading out a volume of 3 trillion us dollar, which has been knocked down to something like $900000000000.00. is, is it normal or is it an indication of an error that is about to come to an end? i think that this is a much bigger issue and we're going to see about more contagion within the space. you know, there have been, as i mentioned before, you know, questions about the capitalization of other platforms. there are quite a few, not just retail but institutional player, but had money on us. so i think we were already in a bit of a what you might call a crypto winter, i guess within the phase, but it's going to help coal there pretty soon because there is more contagion that comes out of this. and i, i wouldn't be surprised if this isn't the 1st. there's

a couple of exchanges that we have trouble for various different reasons. and as mentioned before, you know, i think during this discussion it's very difficult to tell when the tide goes out, who's swimming, make it, you know, in the traditional financial industry that's fairly straightforward because regulators have a really good graph dot maintain to monitor that on a regular basis, but with an up regulation or oversight to really see what's happening behind the scenes. you know, how they, how they make the secret thoughts. and so i think, i think we're in for a little bit more term all over the next few weeks, months and potentially even years on us. glenn is quite interesting that despite all these problems, despite all the crunch, people would still tell you that the adamant about the fact that crypt currency is the future of finance. yeah, i will still tell you that. and as you say, lots of other people will say that and you know, the reason is, is quite straightforward is because it hasn't been done properly yet. you know,

i know what the dream is. i understand have the centralized finance works and i've been following it very closely and, you know, there's a hell of a lot of potential. there is the best financial innovation that i've seen in, you know, 20 odd years, maybe longer. you know, since the, since really the advent on of derivatives i guess in the 19 eighties and then in the 1990 s, you know, those with big financial innovations that cause a lot of problems. but also did a lot of good in other ways. some lead the centralized finance actually goes back to what robert was just saying that really about people latching all to figures. i guess we're human, we latch on so big human figures that we want to put our trust in. but you know, we do need to get away from that. the dream of the centralized finance is small contract is code, is people buying and selling in ways that don't necessarily involve human intermediaries and don't rely on trusting in human intermediaries. and from the experiments that have been done so far, for the most part, it worked out very well. yes, there are hiccups and some quite major helps,

but it's all experimentation and it's all going quite well. and just one last point i'd like to make about regulation, just picking up on the exam was saying that we do need good regulation, but it must be good regulation because there was a danger now with a lot of regulators in like i not fully understanding how these things work, they might over regulate d fi, which hasn't been the big problem and not do the right regulation on centralized exchanges. so far we've had centralized exchange regulation in the united states for the push most, the trading business off. sure. that's why people were trading on f t x based in the bahamas because the exchanges that were based in the us like coin base were hampered in many ways by bade regulation. we need clarity, and we need sustain full regulation for exchanges to stay in the main jurisdictions of people to trade in those jurisdictions. quite a fascinating story about how to admit that this is quite an uncharted galaxy as

far as i'm concerned, and many other millions of people all over the world. but in the meantime, brothers kept zone in capron and glen goodman. i really appreciate your insight and thank you for what you can see the program again. any time by visiting our website al jazeera dot com for further discussion goes our facebook page. that's facebook dot com, forward slash ha and say, sorry. you can also, during the conversations with our 100 is add a jane size, but it from the hash amount of our and the entire team here in doha bye for now. ah a i'm from canada and my

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