Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Binance to acquire FTX

bloomberg.com

Post reply on HN
Print view View original

291–300 of 790 posts

Re: Binance to acquire FTX

#291

Post by arcticbull »

guepe wrote: post #284
arcticbull wrote: post #279

Earlier quoted context omitted.

Fractional reserve in the context of banking is completely different because the FDIC backstops runs and the Fed backstops the FDIC. Nobody backstops FTX or any other crypto exchange so its better described here as 'the yolo lifestyle'. A modern day bank run in traditional finance is functionally impossible* (up to the FDIC insurance limits, and often higher in practice - there were no imposed limits at WaMu for inst…

Matt Leving from Money Stuff discussed it today (!). If exchanges provide leverage products to customers, they become banks (providing leverage, through funding typically by other customer's deposit). So bank runs are possible.

Ah will take a listen! Thanks!

Re: Binance to acquire FTX

#292

Post by tanseydavid »

lancesells wrote: post #174
miohtama wrote: post #152

Earlier quoted context omitted.

FTX/Alameda holds tons of illiquid FTT tokens that they cannot sell and which Binance was dumping. Thus, they might have not technically lied. But they were still wrong from the accounting perspective - they surely understood that FTT token cannot be used to cover gaps in large scale. It was the question that matters "how fast you can process user withdrawals and with what risk" Sam owns 8% of Robin Hood that is wort…

> Sam owns 8% of Robin Hood that is worth around ~$1B - he could sell that and cover some of the gap. Not knowing too much about this space have you ever seen anything like this happen? A CEO using their personal wealth to cover their customers funds seems unlikely.

Free Jon Corzine!

Re: Binance to acquire FTX

#293

Post by [deleted] »

sneak wrote: post #282
jonas21 wrote: post #275

Earlier quoted context omitted.

For those not up to date on crypto people, SBF is Sam Bankman-Fried [1] and CZ is Changpeng Zhao [2]. I don't know why they insist on being called by their initials like they're some sort of ticker symbol. [1] https://en.wikipedia.org/wiki/Sam_Bankman-Fried [2] https://en.wikipedia.org/wiki/Changpeng_Zhao

It’s common in many internet circles to refer to prominent people by their initials. Hackerdom has a long tradition of this: rms gls esr jwz et al. It also tends to happen in US federal politics for some reason (jfk rfk gwb fdr et al) but not to everyone.

[deleted]

Re: Binance to acquire FTX

#295

Post by woodruffw »

sneak wrote: post #282
jonas21 wrote: post #275

Earlier quoted context omitted.

For those not up to date on crypto people, SBF is Sam Bankman-Fried [1] and CZ is Changpeng Zhao [2]. I don't know why they insist on being called by their initials like they're some sort of ticker symbol. [1] https://en.wikipedia.org/wiki/Sam_Bankman-Fried [2] https://en.wikipedia.org/wiki/Changpeng_Zhao

It’s common in many internet circles to refer to prominent people by their initials. Hackerdom has a long tradition of this: rms gls esr jwz et al. It also tends to happen in US federal politics for some reason (jfk rfk gwb fdr et al) but not to everyone.

There's a little bit of cargo-culting with the practice: I thought CZ was short for the Czech Republic. The only reason I know "SBF" is because the New Yorker obliged him in that William MacAskill piece.

Re: Binance to acquire FTX

#296

Post by matheusmoreira »

oldgradstudent wrote: post #266
matheusmoreira wrote: post #257

Earlier quoted context omitted.

> They claim to be an exchange, not a bank They're liars. They are literally banks with all of the drawbacks and none of the benefits. They do fractional reserve banking with user deposits.

I'm not sure why you are ruling out a Ponzi scheme so quickly.

I don't think a Ponzi scheme adequately explains the problems with centralized cryptocurrency exchanges. They're just banks. There are plenty of scammers in this space, I just don't think Binance is one of them.

The problem is they leverage user deposits as gambling money. These corporations can't bear to watch a pile of money sitting around doing nothing while in their custody. They just need to loan it out.

Re: Binance to acquire FTX

#297

Post by JumpCrisscross »

guepe wrote: post #284
arcticbull wrote: post #279

Earlier quoted context omitted.

Fractional reserve in the context of banking is completely different because the FDIC backstops runs and the Fed backstops the FDIC. Nobody backstops FTX or any other crypto exchange so its better described here as 'the yolo lifestyle'. A modern day bank run in traditional finance is functionally impossible* (up to the FDIC insurance limits, and often higher in practice - there were no imposed limits at WaMu for inst…

Matt Leving from Money Stuff discussed it today (!). If exchanges provide leverage products to customers, they become banks (providing leverage, through funding typically by other customer's deposit). So bank runs are possible.

> exchanges provide leverage products to customers

Levine spoke about brokerages. When brokerages extend credit, they can be subject to run dynamics. Not exchanges.

Re: Binance to acquire FTX

#298

Post by dang »

Url changed from https://slashdot.org/story/22/11/08/1612256/binance-to-acqui..., which points to this.

Submitters: "Please submit the original source. If a post reports on something found on another site, submit the latter."

https://news.ycombinator.com/newsguidelines.html

Edit: we changed the URL again—this time from https://techcrunch.com/2022/11/08/binance-signs-letter-of-in... to a different one that seems to give more background and more explanation. (via https://news.ycombinator.com/item?id=33523192, but no comments there)

Re: Binance to acquire FTX

#300

Post by colinmhayes »

gowings97 wrote: post #213
kuratkull wrote: post #119

Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined - this was yesterday/today. Of course the price of FTT crashed today. And now Binance buys FTX to help them out... smells like Binance played 4D chess all along. https://decrypt.co/1136…

Quoted post unavailable.

FTT is not a stablecoin
Post reply on HN