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FTX tapped into customer accounts to fund risky bets, setting up its downfall

wsj.com

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Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#141

Post by adamsmith143 »

somuchfordonor wrote: post #46
markisus wrote: post #14

Earlier quoted context omitted.

But you actually can make money honestly by finding mispricings in the market. Eg Buffet, or Burry during the housing crisis. You can also make money through arbitrage or other brief financial blips that occur in the market. These things aren't really scams in the normal sense.

> honestly by finding mispricings in the market. Eg Buffet, or Burry during the housing crisis. Like who wants to be on the other side of a Jane Street transaction? Absolutely fucking nobody. If you're talking about "mispricings" during the "housing crisis," my dude, nobody wanted to sell their house to these dumb fucks! They were going to starve, they had no choice! How does that not seem like a scam of some sort to…

>Like who wants to be on the other side of a Jane Street transaction? Absolutely fucking nobody. If you're talking about "mispricings" during the "housing crisis," my dude, nobody wanted to sell their house to these dumb fucks! They were going to starve, they had no choice! How does that not seem like a scam of some sort to you? That's not honest money!

This comment makes me think you don't have the slightest idea of how the financial sector works, how Warren Buffet makes money, what happened in 07-08 or how Michael Burry made money during the crisis.

>If the Mercers were good people, would they be Republicans? No dude. C'mon, use common sense. Don't get hung up on "normal sense." Use common sense.

This comment makes me think you are just a troll.

>But the Jane Street people: No dude. Not Warren Buffet, not Burry, none of those vultures.

This is just ignorant. If Warren Buffet looks at Coca-Cola and thinks hey this stock is under-priced and will be worth more in the next decade and makes 10B off it there's no scam involved. Michael Burry evidently read through hundreds of Mortgage Backed Securities and saw that the underlying assets were more risky then they were priced at and made a killing betting against them. No scam. I'm not privy to what Jane Street's techniques are but it's most likely some ML driven search for alpha but again nothing screams scam. They aren't taking retail investor money, you couldn't invest with them even if you wanted to. Where's the scam?

All of your posts reek of paranoid delusions frankly.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#142

Post by JackFr »

NickC25 wrote: post #115
IanCal wrote: post #97

Earlier quoted context omitted.

> So did Bernie. No, he just straight up didn't invest peoples money, he paid out "gains" just from other deposits. That's why it was a Ponzi scheme - that's what they are.

Initially, he did invest their money, he just didn't get the (I believe it was) +/- 10% that he promised investors (and was getting like clockwork) before the 08 crash. Once he started not being able to make those returns did thing start to unravel. His own kids were in denial right up until the end - almost nobody, even inside Bernie's firm, knew it was fraudulent.

> almost nobody, even inside Bernie's firm, knew it was fraudulent.

It’s amazing what you can fail to know when not knowing it keeps you out of jail.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#143

Post by Animats »

dvt wrote: post #83
Animats wrote: post #77

Earlier quoted context omitted.

Richmond, CA police department. Alameda Research HQ is at 5327 Jacuzzi St Ste 1c, Richmond, CA 94804. Since they were apparently the recipient of the money, and he's apparently the principal beneficiary of all this, that's where to start. Mr. Bankman-Fried may not physically be there, but they have jurisdiction. Once there's an arrest warrant, getting away becomes much more difficult.

You're conflating FTX.us (which is regulated) and operates in the USA, and FTX global (where all this chicanery happened) and is located in the Bahamas. With that said, the SEC is already also investigating any potential links between the two entities. I don't think they'd be stupid enough to cross those wires, but you never know.

No, see Molly White's blog and the WSJ parent article. What seems to have happened is that 1) FTX.intl loaned money to Alameda Research in the US in exchange for some token, 2) Alameda Research, which is a crypto trading firm, speculated with that money and lost, 3) the collateral from Alameda to FTX turned out to have little value, and so 4) FTX.intl goes down. Bear in mind that Mr. Bankman-Fried heads all three organizations.

Whether FTX.us is also involved is not yet clear. But it will be. The SEC and CFTC are descending, with hard questions.

Molly White: "This suggests to me that a) they are in a really bad spot, and b) they want as few people sniffing around in their books as possible." Right. That was probably the real goal of a merger with Binance. In bankruptcy, all the dirty laundry comes out. Being acquired by Binance offered hope of keeping any criminal activity hidden. That hope is now gone.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#145

Post by skullone »

I checked my FTX account, only had play money in there. But, despite all the people saying "FTX is fine, withdrawls still work, it's all fine" - nope, everything is disabled, withdrawls show $0.10 avaialble to withdrawl (out of a few hundred I had in actual US cash, plus the BTC and doge transactions are all disabled. This is very serious for many people - there are some who had substantial amounts of money, including my friend who is at the moment suicidal, a lot of his identity and worth was tied up in crypto. Please offer support to those you know who are affected by this scam, and do not encourage or enable anyone else to dablle more than throwaway money into anything crypto

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#146

Post by adamsmith143 »

somuchfordonor wrote: post #37
amluto wrote: post #32

Earlier quoted context omitted.

> But not once - not from word of mouth, or directly from them, or someone, ever, anywhere - have I heard a common sense way these guys make money due to intelligence, instead of due to a scam or due to luck. Financial markets have a fascinating property: any well-known strategy that can be implemented at reasonable cost [0] stops working. This is because people implement it and the profit goes away. If Jane Street h…

I see a lot of variations on these arbitrage and secrecy themes. Arbitrage that sticks around for years: those are scams dude. They involve collusion, not intelligence. I understand it might not be illegal collusion, but if either side of the transaction being scammed found out, they would find someone else to work with. Trust me, I know. I've worked in ad tech.

>Trust me, I know. I've worked in ad tech.

Trust me I know about the inner workings of the Financial world because I did an internship at a Digital Marketing agency and totally didn't get coldly rejected by Jane Street when I applied for their Head of Trading position that I totally deserve because I'm like way smarter than those Harvard Math 55 morons.

Lol this is S tier cope or A tier trolling.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#147

Post by Cipater »

lavezzi wrote: post #131
FormerBandmate wrote: post #124

Earlier quoted context omitted.

Sequoia did a nauseating, hilarious puff piece on him a couple months ago and this guy sounds like Adam Neumann’s second coming. https://www.sequoiacap.com/article/sam-bankman-fried-spotlig...

Will need the Wayback Machine as they are trying to damage control: https://web.archive.org/web/20221027180943/https://www.sequo...

>But, right there, between a bright yellow sunshade and the crumb-strewn red-brick floor, SBF’s purpose in life was set: He was going to get filthy rich, for charity’s sake. All the rest was merely execution risk.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#148

Post by dang »

throw10920 wrote: post #139
dang wrote: post #128

Earlier quoted context omitted.

This is one of those times when it's helpful to know what you're optimizing for. On HN we have the luxury of a single principle that we're optimizing for: intellectual curiosity. (See https://news.ycombinator.com/newsguidelines.html plus lots of past explanations: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor... ) This makes it easier to answer questions that would otherwise feel like hard tradeoffs. I…

You've clearly and concisely stated what I've been struggling to verbalize for several years now: that heated emotional flamewars aren't discouraged/forbidden on HN because emotion is bad (which is a strawman often brought up), but because HN is not the place for that , because we optimize for intellectual curiosity. Just like programming languages - HN is neither the only forum in existence, nor does it need to serv…

(It was more concise before I finished editing)
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