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We will not pursue the potential acquisition of FTX

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Re: We will not pursue the potential acquisition of FTX

#111

Post by pseudosavant »

JumpCrisscross wrote: post #13

In the thick of it, illiquidity and insolvency blur. But not after the fact. As usual, Levine put it best: “the problem is not a timing mismatch, in which FTX’s customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. The problem is that FTX took its customers’ money and traded it for a pile of magic beans, and now the beans are worthless and there’…

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

Re: We will not pursue the potential acquisition of FTX

#112

Post by mumbisChungo »

cellis wrote: post #86
mumbisChungo wrote: post #23

The silly thing is that FTX was a money printing machine. There was no reason to start gambling with user funds, aside from greed, hubris, and stupidity. Similarly, Sam's fund Alameda was delta-neutral until some time in 2021, which is something that also could have profitably continued in perpetuity, but they got greedy and started making directional bets with leverage.

There’s a Bloomberg article that goes over why this is a bit more nuanced than “gambling with customers funds”. In short, it’s either one or both of poor risk management ( margin traders can’t post collateral and the collateral they had was FTT which went to zero ) and black swan bank runs ( Binance CEO tweets about risky FTT causing bank run causing further drops ). In fact “gambling with customer funds” was by desi…

>In fact “gambling with customer funds” was by design.

This is not accurate. The ToS for FTX explicitly said that customer funds would not be used for investment purposes. While it didn't explicitly say it wouldn't be used for lending, it was a broad assumption in the industry that the exchange was solvent and could back user assets on a 1:1 basis.

It is widely believed now that Alameda went deep underwater during the collapse of the Luna ponzi (this one was quite literally structured like a ponzi) and borrowed a large amount from FTX to bail themselves out of it. In the wake of this, FTX had a shortage of hard assets and a fat bag of FTT that the loan was issued against, which is what exposed them acutely to a bank run and/or price decrease in FTT.

Re: We will not pursue the potential acquisition of FTX

#114

Post by TedDoesntTalk »

mumbisChungo wrote: post #90
nullc wrote: post #39

Earlier quoted context omitted.

Why do you think a single thing they told the public was ever truthful? It seems naive to me.

I’m not sure what you mean by this exactly. Many of the things they said to the public are not true, but these currencies use permanent, public ledgers, so you can see where the money goes if you look carefully.

Does the ledger capture loans of user funds held by FTX?

Re: We will not pursue the potential acquisition of FTX

#115

Post by paulpauper »

pedalpete wrote: post #75
paulpauper wrote: post #57

MSTR down 50% in 2 days. That will also be going to zero, too given how much debt it carries. Leverage on an such a volatile but likely worthless asset is financial suicide. What were these people thinking. Leverage on index funds is pretty risky, but on bitcoin? Makes no sense.

Are you referring to Microstrategy? Or some other MSTR? Google is showing down 30% over the last 4 days. https://www.google.com/search?q=MSTR&sourceid=chrome&ie=UTF-... At the same time, if you are talking MSTR, Saylor must be concerned.

MicroStrategy

Re: We will not pursue the potential acquisition of FTX

#116

Post by squidbeak »

skippyboxedhero wrote: post #97
fdgsdfogijq wrote: post #64

The funny thing is for six months I have been checking FTX for open developer positions. Thinking surely, the best place in crypto must be hiring good devs like me. And there have been no postings at all! And word on the street is their devs actually building the exchange made a middling salary with zero stock. I always found it odd, how could they not be hiring? even during the downturn? And now I know why, it was a…

It wasn't. They just ran with significantly less staff (iirc, less than 30). If they wanted you, they got in touch. FTX wasn't a scam either. Their business was a licence to print money but, as so often happens in finance, managed to spin shit from gold.

Concealing from users they were gambling with their funds - and not a scam?

Re: We will not pursue the potential acquisition of FTX

#118

Post by rahen »

TheAlchemist wrote: post #53

What's even more funny is that Binance make it look like they are a stable financial institution, and it's thanks to their high standards that they won't acquire FTX. Binance is most probably much more of a fraud than FTX. Binance doesn't even have physical headquarters in any country in this world - and the reason is that they are being actively investigated or banned almost everywhere.

"Not your keys not your coins". I wonder how people can trust those CEX to store their funds. Private keys should be hosted on a cold wallet, period.

Re: We will not pursue the potential acquisition of FTX

#119

Post by headsoup »

eddsh1994 wrote: post #85
Animatronio wrote: post #79

Earlier quoted context omitted.

As the saying goes "Fool me once ..."

Regardless of opinions it's a sizable user base! And, assuming there's another bull run at some point, it'll grow again.

That's a big assumption at this point.

Re: We will not pursue the potential acquisition of FTX

#120

Post by mumbisChungo »

TedDoesntTalk wrote: post #114
mumbisChungo wrote: post #90

Earlier quoted context omitted.

I’m not sure what you mean by this exactly. Many of the things they said to the public are not true, but these currencies use permanent, public ledgers, so you can see where the money goes if you look carefully.

Does the ledger capture loans of user funds held by FTX?

Yes
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