REKT - Chapter 9

Liquidation

Fritz at Frankfurt has unfrozen our account but capped the balance at three hundred million. Good and bad news. Good because we’ve had a delicate forty-eight hours stalling out redemptions. I fed our clients a story about a corrupt database preventing trading. Bad because Kila is a couple days away from sending us two hundred million dollars. With the cap in place, we have nowhere to direct the money to.

“Can’t you open an account for us in Cyprus?” I ask Niko.

Our pillow talk has turned to shop talk. It was bound to happen, to make it to our last day in Amsterdam is an accomplishment.

“No.” Niko is quick and crisp with that answer.

“Why? You know everybody there.”

“That’s why. No one will touch crypto and there’s no fooling friends if you plan on working there a long time. My daughter will bank there one day. What are you compared to that?”

“What if I am her father?”

Nikola is not amused.

“Can’t we park it in a mutual fund?” It’s Andy. “Did you shave your junk Ryan? You look rather smooth down there.”

Jesus Christ. He’s on Facetime. With us. In bed. Is there anywhere this man won’t go? I grab the down comforter and cover myself up again.

“I used Nair on him. We were on mushrooms. It made sense at the time.” Niko turns crimson.

“Very naughty. The two of you need to get out of Amsterdam before the piercing starts,” Andy says.

“Can we get back to the two hundred million we don’t have a home for?” I ask.

“A money market won’t be a problem. There are a few funds that will take us tomorrow. The money cannot move around though. This isn’t a surrogate bank. We have to park it and leave it. Putting it there means we are starting the liquidation plan.”

Nikola brings up the elephant in the room. No one has wanted to talk about the inevitable, because no one has any better ideas. Kila’s two hundred million presents a real complication. If we refuse it, word will get out and everyone would know we have a banking problem. That might trigger a rush to redeem and cause Frankfurt to lock our account again. All it takes is one irate customer calling Fritz, telling him to hand over their money, and we are really fucked. So, we have to take the money from Kila even if we plan on closing the business. It’s a real game of knucklehead chess. Every idiot with a crypto coin is making millions, here we are struggling to return money and get out of the game. Capital L losers.

The liquidation plan is simple. At the end of the quarter, our auditor will do their usual check. They’ll publish a client report saying our reserves equal the value of all outstanding coins. Then we’ll announce we are shutting the fund down. At that point, customers have until the end of the year to redeem their coins. After that, we shut Icarus down. Frankfurt and Fritz won’t be a problem, because we’ll tell them that we took a big loss on a trade and are getting out of the precious metals game. They’ll think all the money flowing out is going to LPs. Once that’s done, we’ll move on to the next thing.

Whatever that is.

“Where do we go from here?” It’s Andy channeling Axl Rose.

“Crypto hedge fund. We trade coins. This thing is a bubble, timing is everything. We get in, we get out. There’s a killing to be made, especially as insiders. You two know everyone. Get in on the pump and dump action that’s happening,” Niko says.

She is decisive and determined. She’s thought this out already.

“There’s a conflict of interest. We can’t launch until we close Icarus down.” That’s me acting as a big wet blanket.

“That’s fine. Have Andy use the time to raise money and we’ll trade on the quiet with the money we’ve got.”

“What money?” Andy asks.

“There’s that million in gold in Basel. Tell Hans and Stefan our diamond thing has fallen through, and we need to free up some cash. They made money on us. It shouldn’t be a problem.” Niko answers.

“What if we took the two hundred million from Kila?” Andy floats the idea.

“No fucking way. It’s not negotiable.”

“I’m just spit balling Ryan. We don’t have anything else?”

The sad fact of the matter is that we don’t. We are playing fake it til you make it. We don’t really have a private jet. We are part of a fractional program, and only book dead heads, super cheap flights when a plane goes to a destination and has no one to take back. That private security? They belong to a friend of ours. We rent them during off hours. Our back office? A bunch of Serbians moonlighting themselves. This entire thing is smoke and mirrors. We took all our sports betting earnings and plowed it into the crypto version of Icarus. That gold is all we got.

“Nope,” I say.

“Well, a million is nothing to sneeze at. Sell it and wire the money into Gemini. We can double, maybe triple it if we play the game right.”

Nikola is right. Timing is everything and we are wired in. The nice thing about crypto being so new and unregulated is that there’s no such thing as insider trading. It’s the wild fucking west. We are about to run and gun. If the party can hold out until Icarus shuts down, then we can take other people’s money and gain some real leverage. I feel good about this. We needed to shit or get off the pot. Goodbye pot. Well, the metaphoric kind.

PREVIOUS CHAPTER - NEXT CHAPTER