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Binance to acquire FTX

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Re: Binance to acquire FTX

#301

Post by matheusmoreira »

arcticbull wrote: post #279
matheusmoreira wrote: post #258

Earlier quoted context omitted.

They aren't brokerages, they're banks pretending to be exchanges. They do fractional reserve banking with user deposits.

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…

> modern day bank run in traditional finance is functionally impossible

Not at all. Bank runs still happen, the backstops just soften the blow with liquidity injections. Every time you see a withdrawal limit, there is no doubt a bank run is occurring.

Re: Binance to acquire FTX

#302

Post by woodruffw »

majani wrote: post #216

I'm glad a big government supporter such as SBF is out of crypto leadership. Crypto is an anarchist experiment and it should remain that way

> Crypto is an anarchist experiment and it should remain that way

What exactly makes it remain that way?

I don't say this as a cheap "gotcha": what's the governance structure that makes it an anarchist experiment, specifically, and not just a free-for-all?

Re: Binance to acquire FTX

#303

Post by ww520 »

ww520 wrote: post #143
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…

Isn't FTT like FTX's own issuing tokens? It's like printing one's own money. But when the backing firm fails, the printed money is worthless, just like what LUNA issued by Terra had become.

Just went over the issues on the balance sheet of Alameda Research, which is SBF's trading company.

Of the $14.6 billion assets Alameda manages, almost $6 billion is FTT based. Alameda has heavy investment in Solana, Serum, and other alt-coins. It looks like the drop in their value has lowered Alameda's asset balance. Alameda borrowed FTT tokens from FTX to put them as assets in the balance sheet to shore it up. The size of the asset balance is probably used to obtain loans and liquidity.

FTX issues FTT tokens (print money) => lends to Alameda to put under the asset balance => Alameda borrows money from outside against its assets or uses the asset/coins to invest in others => win with thin air!

The crashing of the FTT token not only tanked FTX, it's going to tank Alameda Research as well since its asset balance suddenly shrunk and might have liquidity problem.

The tanking of Alameda is going to another Three Arrow Capital event since Alameda invests in lots of other cryptos. It might be forced to liquidated those investments. Expect another bloodbath in the crypto space.

Re: Binance to acquire FTX

#304

Post by kolbe »

ramish94 wrote: post #25
ucha wrote: post #16

SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…

Welcome to the world of unregulated finance. There’s a reason the FDIC exists and all banks must be insured.

The FDIC is just a ruse to let "useful idiots" think that everything is okay. In reality, the FDIC charges banks 90% less than the actuarial value of the risk they take on, and banks make wildly risky loans/bets all the time, knowing it's "heads I win, tails the taxpayer loses."

Insofar as you can call US Finance any better than crypto, it's because of socialized losses. IMO, bank failures are a much more appropriate solution.

Re: Binance to acquire FTX

#305

Post by colinmhayes »

potatototoo99 wrote: post #180
three_seagrass wrote: post #145

Earlier quoted context omitted.

Even without the edit, your response feels like a no-true-scotsman i.e. an attempt to remove bad actors who deal in decentralized cryptocurrencies from the purity that is defi. What are some large, successful defi organizations today?

Tornado Cash is pretty successful.

not sure about this one.

Re: Binance to acquire FTX

#306

Post by andirk »

rchaud wrote: post #274
andirk wrote: post #234

Earlier quoted context omitted.

I earned $1,200 from Gemini's stablecoin GUSD's interest last year. Withdrew the extra and bought some nice pendant lights for my new kitchen.

I understand many did well with Bitconnect too...

Not a stablecoin. Bitconnect is my favorite crypto scam so far! It was so obviously a scam, and the bros promoting it were even dumber than that shitcoin.

A lot of crypto projects can appear scammy because a handful of people are working on something and their token goes through the roof then crashes with no wrongdoing on the part of the project. Invest in projects, not coins!

Re: Binance to acquire FTX

#307

Post by tanseydavid »

chubot wrote: post #283
boeingUH60 wrote: post #54

"We’re going to look back at a generation of successful founders and VCs with the realization that all of their talent was in creating a company during the bull market." - random tweet I came across that's very relevant here.

There was an entire book about this that became famous during the 2008 financial crisis: Fooled by Randomness by Nassim Taleb https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Ince... It's literally about how options traders and the like can be lucky for 10 or 20 years, but they are actually idiots who destroy the economy. They think they are skilled, and others think they are skilled, but it's luck. You can al…

This book was my introduction to Taleb and I loved it. I recommend it frequently.

Re: Binance to acquire FTX

#308

Post by secretsatan »

majani wrote: post #216

I'm glad a big government supporter such as SBF is out of crypto leadership. Crypto is an anarchist experiment and it should remain that way

Ha! One massive feudal lord just crushed another and all the serfs lost their money. This isn’t anarchy, it’s a monopoly

Re: Binance to acquire FTX

#309

Post by matheusmoreira »

ucha wrote: post #16

SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…

They lied to everyone of course. Never trust these corporations. They're sitting on huge piles of consumer deposits, of course they're gonna leverage that money. They cannot resist the temptation.

Re: Binance to acquire FTX

#310

Post by nullc »

Bootvis wrote: post #263
nullc wrote: post #253

Earlier quoted context omitted.

When I saw that he was using that as the claimed origin of his wealth I wrote him off as an almost certain fraud.

Why? He must have had some money of his own and some rich friends to set it up. So he had the means. Also, the difference was there and it was persistent so he had the opportunity as well.

There was very little volume available on those pricing discrepancies, making thousands per day without erasing the arb would have been a challenge but perhaps not impossible. The public is expected to believe he made over $10 million dollars per day on average on that trade. It's not credible.
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