No Bank Account is Safe in 2023 (Traditional or Otherwise)
And though many of you may have forgotten about the money stolen from depositors from Laika Bank and the Bank of Cyprus that the bank-owned mass media comically and immorally reported as a "haircut" instead of the straight-up theft that it was, even the final terms of this theft were opaque and less than transparent as media outlets reported the final theft at anywhere between 40% and 80% of all deposits at these banks that exceeded €100,000 in deposits.
In response to this massive theft (as I've never paid 80% of my savings account to receive a haircut), most people responded with apathy and "that won't happen to me" syndrome, though I explicitly stated that the 2013 fiasco in Cyprus was just the beginning of people being "cyprus'd" over and over and over again in the coming decade.
And surely, each succeeding cryptoexchange bankruptcy seemingly outpaces the last one in the breadth of its implosion crater and the number of people caught inside its implosion radius. In addition to the multi-billion dollar collapse of the FTX cryptocurrency exchange this month in which clients appear poised to lose billions of dollars, other notable cryptocurrency exchange collapses include the 2014 Mt. Gox Tokyo based exchange, the 2019 collapse of the largest Canadian cryptoexchange at the time, QuadrigaCX (which I extensively covered at the time), this year's collapse of the Voyager Digital exchange and the subsequent collapse of the Celsius lending platform, and of course the aforementioned recent collapse of the FTX exchange.
In all the more recent cases (Voyager Digital, Celsius, and FTX), each time, celebrity endorsers from Mark Cuban to investment/finance YouTuber influencers gave their mark of approval to each of these platforms, leading millions to believe that such platforms were “safe” places on which to park their money prior to their collapses. However, as I’m one that has always stressed personal accountability for all investment decisions and has raged against blind compliance to any analyst’s guidance as patently stupid, I can’t place all blame at the feet of finance YouTubers for the massive losses suffered by lazy people that take their investment cues from them. Is it sleazy and unethical for these finance YouTubers to have so relentlessly promoted exchanges on their channels in return for alleged payouts of millions of dollars a year from these exchanges to do so? Of course. Doing so is the exact definition of selling your soul and honor. However, does some blame lie with those that blindly followed these YouTubers without performing any due diligence on any of these exchanges before parking large sums of money on them? Absolutely.
Though I called out Mark Cuban as a complete fraudster for consummating a deal with the Voyager Digital exchange that caused him to relentlessly promote Voyager to all fans of his Dallas Mavericks basketball team, I’m sure very few people heeded my warnings. However, people must accept some personal accountability for the decisions they make as well. As an example of our Zero Accountability Society, I recall one year, when I was still running my investment research firm, that I produced an asset allocation model every month that provided a specific weighting for every asset included in my asset allocation model along with exact buy and exit prices. In 2008, when the US stock market crashed by almost 50% and the S&P 500 index ironically bottomed at the 666 mark during Q12009, despite 50% losses in the overall market, I actually kept all my clients positive that year, and followed a nominally positive yield in 2008 during a 50% market crash by the provision of an enormous annual yield of more than 63% in 2009.