Martin Shkreli Reassures Cryptocurrency Investors On Twitch Podcast UpOnly That 'Jail Isn't That Bad' Amid FTX Crypto Crash

In an episode of the cryptocurrency community podcast UpOnly on Twitch, infamous "Pharma Bro" Martin Shkreli joined a panel to give his thoughts on the latest crypto crash yesterday.

Also on the panel was Do Kwon, the man many accuse as the one most responsible for the last crypto crash in May 2022, joining the stream from an undisclosed location. Do Kwon denies being a fugitive, but Interpol is reportedly looking for him and has a warrant out for his arrest.

In one particularly viral moment now making the rounds online, Shkreli reassured Do Kwon that "jail isn't that bad" as the other guests and hosts on the podcast erupted into laughter.

Martin Shkreli telling Do Kwon that "jail isn't that bad" live on @UpOnlyTV was not on my crypto bingo card. pic.twitter.com/eQOma3dbfy

— Kolten (@0xKolten) November 8, 2022

The latest crypto crash revolves around FTX, which was the second-biggest crypto exchange until a few days ago. Yesterday, FTX faced a sudden liquidity crisis as it no longer had enough cryptocurrency in its reserves to pay back people who wanted to withdraw the crypto they had deposited with FTX.

A similar event famously happened with banks and actual money at the beginning of the Great Depression, and it's why there are now laws requiring banks to keep a certain amount of money on hand at all times. The crash also resulted in McDonald's overtaking the total value of Ethereum, which many found humorous.

For those who haven't been following:
The world's 2nd biggest crypto exchange (FTX) just got bought out today by the number 1 (BINANCE), because it was secretly insolvent by over $1 billion and couldn't cover withdrawals. This is the wildest timeline.

— Coffeezilla (@coffeebreak_YT) November 8, 2022

FTX valuation history pic.twitter.com/tPoZt3qq8h

— Trung Phan (@TrungTPhan) November 9, 2022

Binance, the biggest cryptocurrency exchange, agreed on Tuesday to buy FTX and bail it out. Binance would do this for the same reason the federal government bailed out the banks in 2007: if FTX goes down, then the entire cryptocurrency space will go down with it.

Every cryptocurrency including bitcoin is currently down and has been for months. As of this afternoon, Binance started expressing doubts about whether it would buy FTX after getting a closer look at the company's financial information.

Terra Luna was financially stable
Celsius was financially stable
Voyager was financially stable
3AC was financially stable
FTX was financially stable

Until they’re not 🤷‍♂️ pic.twitter.com/CtIz8s6m9R

— 🌋🌋 Deep₿lueCrypto 🌋🌋 (@DeepBlueCrypto) November 8, 2022

JUST IN: Binance likely to walk away from FTX deal, per WSJ.

— unusual_whales (@unusual_whales) November 9, 2022

A similar situation happened with Do Kwon's TerraLuna coin back in May. Essentially, the cryptocurrency was pegged to the dollar, meaning that one Terracoin would never be worth less than one dollar (called a "stablecoin"), but the firm didn't have enough dollars or cryptocurrency assets to keep the peg.

Many have since called out the increasing amount of volatility in the crypto space.

Someone yesterday unironically told me I was either brave or crazy to work in crypto given the insane volatility (cf. the FTX affair).

Uh…do you have any idea how wild Webs 1 and 2 were in their early days?

The first dot-com crash tanked the entire economy. This isn’t shit.

— Antonio García Martínez (agm.eth) (@antoniogm) November 9, 2022

Cryptocurrency is a notoriously opaque and difficult-to-understand market, but Shkreli broke it down later in the podcast. He said the difference between cryptocurrency exchanges and banks is that banks, while often irresponsible and corrupt, "act like adults," while cryptocurrency exchanges tend to take wild risks.

Shkreli then went on to say that the only way for the cryptocurrency space to survive is to "have participants joining the market continuously to feed it." This also happens to be the definition of a Ponzi scheme in which a person running an investment scheme profits only by finding new people to borrow money from in order to pay back the people they've already borrowed money from.

Shkreli also shared that back in the day he would research blockchain things on a prison toilet at 3 a.m. using a contraband cellphone and believed the U.S. government would crack down on cryptocurrency eventually. He capped his pessimistic comments by saying, "I've been bearish since I got out of jail" and "there is no honest actor in crypto."

gonna be really pissed if nobody from these billion dollar 3AC, Luna, Celsius, FTX, Alameda blow ups will go to prison.

will just be incentive for future fraudsters to cause even more damage on this industry

— Dominik Schiener ✨ (@DomSchiener) November 9, 2022

1/ Yesterday was a tough day for our industry. Our hearts go out to all those impacted by recent events at FTX. We are all working together to build a brighter future and moments like these are painful.

— Cameron Winklevoss (@cameron) November 9, 2022