Not surprised at all. They went all-in on a disastrous Super Bowl commercial -- certainly not the only reason for their downfall but representative of leadership more concerned with image than product.
Binance to acquire FTX
691–700 of 790 posts
Re: Binance to acquire FTX
#692Binance 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 asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Why would Binance decline this opportunity? If FTX, Binance, and the market knew FTT would just crash, it sounds like a given that Binance should take advantage of the fixed price instead of losing hundreds of millions of dollars "letting the market decide".
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Re: Binance to acquire FTX
#693Earlier quoted context omitted.
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:…
> As long as noone is being lied to 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.
No argument from me there. I was just narrowly addressing the point in stale2002's comment.
Though to be honest, it is well known that the long term fate of any crypto exchange is to go bust. So no one could really claim that they didn't know it was coming.
Crypto is glorified gambling. (At least so far. In principle, crypto can mature over time into something more serious.)
Re: Binance to acquire FTX
#694What really amazes me about the whole thing is that after celcius and now ftx, tether manages to have peoples' trust and manages to have a bunch of apologists, to the point that in this whole threat there is 0 mention about usdt or tether, while it should at least be mentioned or discussed in here, even tho it has no direct relation, they are the org with most obscure and shady things about them, even the whole busin…
>...What really amazes me about the whole thing is that after celcius and now ftx, tether manages to have peoples' trust...
I've never held/used Tether, and that won't change. There's no reason to use it. However, it's worth pointing out that Tether DID go through what FTX is going through right now. They handled it surprisingly well.
This article says they had $10 billion redemptions in May: https://www.cnbc.com/2022/05/17/tether-usdt-redemptions-fuel...
This article says they had $1.6 billion redemptions in June: https://www.coindesk.com/markets/2022/06/15/tether-sees-new-...
There are rumors that FTX was/is missing as much as $5 billion of customer deposits. That's what lead to their withdrawal issues.
>while it should at least be mentioned or discussed in here, even tho it has no direct relation
It's a stable coin, not a centralized exchange. No comparison. Though, both should be able to honor 100% of withdraws at any moment.
You are likely to label me as an apologist. Again, I don't trust it. I couldn't care less if it stops existing tomorrow. I just haven't seen any concrete evidence it can't honor redemptions. The opposite was proven in May and June.
Re: Binance to acquire FTX
#695This is great, he was lecturing how stock exchanges should work & on the cover of Fortune as the next Warren Buffet all of what.. 8 weeks ago? SV fintech keeps reinventing all the mistakes of 19th century banking. BNPL is the next explosion btw.
That says more about media outlets like Fortune, than "SV fintech." It seems like you're using that as a way to describe a single entity. Many people in crypto saw him as a snake.
Re: Binance to acquire FTX
#696Earlier quoted context omitted.
FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
They are an exchange that allows future trading and margin trading which require borrowing money/assets/coins. The FTT tokens were probably put up as collateral for loans. The drop of the FTT value probably triggers calls on those loans. Thus the liquidity crisis.
Ok. To settle once for all whether FTX is an exchange or not. Below are the services they offer.
Futures: ... with margins of up to 101x.
Leveraged Tokens: ... up to three times the leverage. ... the leveraged coins offered by FTX don’t require any margin.
Options: (standardish).
MOVE: ... wager on the price movement ... a play on volatility.
Spot Markets: ... more than 100 different spot trading pairs.
Re: Binance to acquire FTX
#697Re: Binance to acquire FTX
#698Earlier quoted context omitted.
Last I checked, the Zapatistas are still around.
The FLDS cult is still around too and for about twice as long. Its mere existence doesn't make it a successful experiment.
Then you should clearly define "success". So far as I can tell, the Zapatistas did succeed in building the society that they wanted and kept it going for several decades now. Are you claiming that they aren't meaningfully anarchist?
Re: Binance to acquire FTX
#699Earlier quoted context omitted.
FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
I was having this exact conversation with my friends y'day. An exchange marketplace shouldn't be in this position unless they are also participating in the market directly or indirectly through funds, their own and the customers' funds. Customers' assets (either crypto or fiat/USD) should be backed 1:1. The only reason for FTX to pause withdrawals and then assure investors that their money is safe is a sign that they…
> An exchange marketplace shouldn't be in this position unless they are also participating in the market directly or indirectly through funds, their own and the customers' funds.
Yes, although the limitation with this line of thinking is that in most market-related activities (including running an exchange) it's hard not to be structurally long the market in various important ways. For example as an exchange your commissions are going to be highly correlated with market activity and may also be per unit in some cases and so would be directly correlated with market prices in that case.
As a second-order effect, customers' trading limits are going to be affected as prices fluctuate even if you don't directly offer margin yourself, because not only does the value of the thing they've deposited with you change and therefore affect how much other stuff they can sell this for but also they may have made that deposit by pledging collateral elsewhere and borrowing against that to create margin so that margin loan will be affected.
You can definitely try harder to avoid the problem than FTX though which seems to have been pretty much all-in on it's own illiquid token (FTT) and Alameda using leverage on FTT as their main source of funding. One of the things I learned at Goldman during the crisis is that you can't rely on a mark for anything illiquid - you have to have a real liquid market price.
Re: Binance to acquire FTX
#700Earlier quoted context omitted.
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…
>It's literally about how options traders and the like can be lucky for 10 or 20 years I don't see how doing anything successfully (in this case, gaining profit?) for 20 years can be described as "luck." Surviving/being successful that long trading isn't a fluke. I haven't read the book, but I know that Talib talks about 'tail risk' a lot and 'risk of ruin'. Which are very different than what you describe. If my bet…
Example: sell attractively priced insurance against a 100-year-flood. You make money for 20 years, but then a crazy big flood bankrupts your insurance company. Who would have thought that would happen?! Options (and other things) can be structured to create 'catastrophic insurance like' outcomes.