661–670 of 790 posts
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It's worse than "shadow bank". It's bank who is allowed to print money at its whims and create any arbitrary leverage it wants.
Well, that's what the 'shadow' in 'shadow bank' means: less/different regulation than a normal bank. That's not necessarily a bad thing, btw.
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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.
He will have to buy equity or other product from FTX to infuse with cash. And if it is going bankrupt he has to stop running it to preserve the liability "shield" -- details of course depend on the country/state of organization/incorporation. I know nothing about the Bahamas.
Example: Elon for instance infused his own cash into Tesla, when it was going bankrupt. But he practically bought equity to my understanding.
Covering customer accounts is different, in a financial firm. I do not know what tools the Bahamas give to FTX. This is all uncharted territory. (Also there is legal exposure to other countries.)
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Which is exactly the problem. This should be illegal, and people who do this should go to jail. Customer funds should be 1 to 1 backed with assets.
As long as noone is being lied to, I don't see any problems. Case A, tell your customers that their funds have asset backing, and have asset backing: fine. Case B: tell your customers that their funds have no asset backing, and have no asset backing: fine. (Those customers deserve what they get.) Case C: tell your customers nothing, and do whatever you feel like: fine. (Those customers deserve what they get.) Case D:…
SBF claimed that assets WERE backed, while it appears that they were not.
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Which is exactly the problem. This should be illegal, and people who do this should go to jail. Customer funds should be 1 to 1 backed with assets.
As long as noone is being lied to, I don't see any problems. Case A, tell your customers that their funds have asset backing, and have asset backing: fine. Case B: tell your customers that their funds have no asset backing, and have no asset backing: fine. (Those customers deserve what they get.) Case C: tell your customers nothing, and do whatever you feel like: fine. (Those customers deserve what they get.) Case D:…
That is exactly what is happening. There is lots of lies being told, with no transparency, and then people's money disappears.
Instead of that, if people money disappears, we should arrest the people who made it disappear.
it's also quite funny how Binance now acts as a total legit org that has not wrongdoings when they have shown no proof of their BUSD backings and they built their empire on top of tether
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…
FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
How many exchanges will need to go under for the market to decide that isn't a great way to operate one? How much educating of users/customers will it take?
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Which is exactly the problem. This should be illegal, and people who do this should go to jail. Customer funds should be 1 to 1 backed with assets.
As long as noone is being lied to, I don't see any problems. Case A, tell your customers that their funds have asset backing, and have asset backing: fine. Case B: tell your customers that their funds have no asset backing, and have no asset backing: fine. (Those customers deserve what they get.) Case C: tell your customers nothing, and do whatever you feel like: fine. (Those customers deserve what they get.) Case D:…
I don't think anyone has an inherent right to take advantage of people's ignorance solely for their own profit even if those people "deserve what they get." We make plenty of other ways of abusing people illegal, why allow that one?
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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.