Former FTX US Boss Talks Token Issuance and Insider Knowledge

Andrew Throuvalas
2 min readJan 9, 2023

Brett Harrison — former CEO of FTX US — spoke with his followers over the weekend about the tendency of crypto companies to resort to token issuance for raising funds.

He was also questioned regarding his insider knowledge about FTX US and its collapse.

Why Not Go Public?

In a tweet on Sunday, Harrison questioned why more crypto companies don’t simply go public early in their lifecycle the way Amazon did.

“Relatedly, how do companies reconcile the desire to stay private for long periods of time while rushing into token issuance?” he asked.

Respondents to Harrison argued that token issuance allows startups to raise money without forfeiting an ownership stake in the company. Samuel Lee said this is especially true given the size of the venture capital industry today, to which Harrison agreed.

Token issuance is a common method used by crypto startups to fund the development of a given CeFi or DeFi project. Such tokens may confer benefits on their holders such as governance rights or trading fee revenue from the service’s users. Alternatively, these assets may operate as the internal currency within a new blockchain system, like ETH for Ethereum, or ADA for Cardano.

Lee also claimed that tokens are “free money” during a crypto bull market, and don’t require a functional product to generate funds. Harrison said this element of fundraising presents a “moral hazard.”

Others were extra cynical: Investor Mike Alfred theorized that keeping companies private is an exploitative profit strategy used by VCs. “They capture a lot more of the total long-term return before dumping on retail investors in public markets.”

While Harrison agreed with this statement, he said that the strategy “doesn’t seem like the pareto optimal solution.”

What Did Harrison Know?

Some users asked Harrison what he knew about FTX US before it went under, and when exactly he knew it. “I’ll share in time,” he answered, offering no other details.

When questioned about why he wasn’t in prison yet, Harrison asked followers to “use powers of inference.”

FTX itself issued a token called FTT, which provided fee discounts and other benefits to FTX users. The Securities and Exchange Commission (SEC) claimed last month that the defunct exchange committed securities fraud by raising money with this token.

FTX US was dragged into bankruptcy proceedings alongside its international counterpart in November. The latter’s former CEO, Sam Bankman-Fried, claims FTX US should never have been involved and is actually still solvent.

Originally published at on January 9, 2023.