Cryptocurrency

Why This Short Seller Is Doubling Down Against Cryptocurrency, Says ‘US Government Should Be Embarrassed’ About FTX Debacle – Bitcoin (BTC/USD), Ethereum (ETH/USD)

Activist investor and short seller Citron Research made headlines in 2021 for attacking stocks like GameStop Corporation GME and other popular companies with the retail investment crowd. The attack led to a David vs. Goliath battle and a short squeeze.

Earlier this year, Citron Research targeted the cryptocurrency sector and is now doubling down on comments after the very public liquidity issues and bankruptcy of FTX.

What Happened: Citron Research took to Twitter Monday to share its takes on the bankruptcy and issues at FTX and how it supports a thesis against the cryptocurrency sector. Citron said it was sharing thoughts after 25 years of short selling and how it related to the “FTX fiasco.”

“Maybe it is time to finally listening to skeptics instead of vilifying them,” Citron tweeted.

“The US Government should be embarrassed that they let one person get so close to the inner sanctum of government and influence without even checking a tax return. Forget about private equity, they are caveat emptor.”

Citron went on to suggest the FBI should have run a check on FTX co-founder Sam Bankman-Fried, who has been widely reported as the second largest donor to the Democratic Party.

“This is a matter of national security…if you didn’t try to silence us, we could have told you in 2 hours.”

Citron said the FTX bankruptcy could lead to decentralization regulation.

The thread ends by saying Citron Research continues to hold a short position in Ethereum ETH/USD, one of the largest cryptocurrencies.

“We continue to be short ETHER as we believe this $130 bil token has as many common sense flaws as does the whole SBF story.”

Related Link: Citron’s Andrew Left Calls Crypto A ‘Complete Fraud’: Is The Short Seller Talking His Own Book?

Why It’s Important: After the GameStop battle with retail traders, Citron Research announced it would no longer publish short seller reports, instead pivoting to covering stocks it thought could see positive returns and be multibaggers.

In June 2022, Citron Research called out the valuations of Bitcoin BTC/USD and Ethereum.

“As ETH still trades above 1000 with a market cap of 140 billion. We say WTF?” Citron tweeted at the time. “Every high-flying real software/cloud company is trading back to pre-pandemic levels which puts ETH at 200 (which is still expensive).”

Citron called out Ethereum due to its lack of use cases and being only used “to buy online collectibles,” in possible reference to non-fungible tokens.

“This has reignited our flame for short selling because it proves there are many stocks out there that are elevated on the misconception that ‘someone else did the homework.’ We will release one soon,” Citron tweeted Monday, suggesting a new short report is forthcoming. 

Ethereum traded between $1,025.68 and $1,241.18 on June 15, 2022 and trades at $1,241.18 at the time of writing. This means that anyone who bought Ethereum after Citron announced they were short would be profitable on the opposite end of the short seller’s trade.

ETH Price Action: Ethereum is trading at $1,241.18 versus a 52-week range of $896.11 and $4,891.70.

Read Next: How To Lose $16 Billion In 3 Days, How Sam Bankman-Fried’s Wealth Disappeared 

Photo via Shutterstock.

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