Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

wsj.com

Post reply on HN
Print view View original

191–200 of 746 posts

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

#191

Post by Animats »

ricardou wrote: post #185
Animats wrote: post #170

Trading halt announcement at FTX.US.[1] Announcement says withdrawals still up. But Twitter messages indicate withdrawals are not working. FTX Japan shut down by order of Japan Financial Services Agency.[2] FTX.intl processing some withdrawals, according to blockchain.[3] A few lucky people got to exit. Way too much happening to mention here. Just use Google to search "FTX" and limit search to 1 day. Margin calls all…

SBF tweeted[1] not too long ago that FTX.us was safe and was 100% liquid. I suppose that wasn't the case? [1] https://twitter.com/SBF_FTX/status/1590709195892195329?t=tQR...

Submit a withdrawal order and find out.

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

#192

Post by tootie »

ricardou wrote: post #185
Animats wrote: post #170

Trading halt announcement at FTX.US.[1] Announcement says withdrawals still up. But Twitter messages indicate withdrawals are not working. FTX Japan shut down by order of Japan Financial Services Agency.[2] FTX.intl processing some withdrawals, according to blockchain.[3] A few lucky people got to exit. Way too much happening to mention here. Just use Google to search "FTX" and limit search to 1 day. Margin calls all…

SBF tweeted[1] not too long ago that FTX.us was safe and was 100% liquid. I suppose that wasn't the case? [1] https://twitter.com/SBF_FTX/status/1590709195892195329?t=tQR...

If FTX were a real company that Tweet would be enough to be put in handcuffs by the SEC.

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

#193

Post by the_doctah »

oldgradstudent wrote: post #42
laluser wrote: post #13

The Twitter thread from SBF is even better where he admits he messed up. And still trying to throw jabs at Binance here and there like it’s their fault they’re here. Unbelievable.

Even Saul Goodman would have told him to shut up.

Suggesting Saul was actually a bad lawyer? He always told his clients to shut up.

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

#194

Post by Animats »

capableweb wrote: post #183
Animats wrote: post #170

Trading halt announcement at FTX.US.[1] Announcement says withdrawals still up. But Twitter messages indicate withdrawals are not working. FTX Japan shut down by order of Japan Financial Services Agency.[2] FTX.intl processing some withdrawals, according to blockchain.[3] A few lucky people got to exit. Way too much happening to mention here. Just use Google to search "FTX" and limit search to 1 day. Margin calls all…

> JP Morgan says expect 50% drop across the board in crypto. Around 10 AM PST, somebody just pulled a billion dollars out of Tether. Meanwhile, aggregate of the cryptocurrency market is up 5.38% over the last day, Tether recovered landing on 0.9999 USD after 4-5 hours of the drop hitting bottom at 0.9818 USD, which was nowhere near previous all-time low Tether has hit previously. In other words, everyone screams "pan…

Tether will stay very close to 1.0 until, some day, they can't make a redemption. The number to watch is their "market cap". Note that Tether can make that go up by minting more Tether, but when you see it go down, that usually means someone cashed out.

Stablecoins have only two stable points: 1 and 0.

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

#195

Post by espadrine »

itsdrewmiller wrote: post #56
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…

The original comment addresses that concern: >Why in the absence of any positive evidence, like "oh here is our genius but nonetheless expired" trading strategy, which anyone could have furnished in the last two decades, they agree, oh it must be real? I agree that there should be some obviously awesome things these funds did that they can share now given they are no longer able to exploit them. I have no idea if the…

That is part of it. The Sequoia piece[0] describes what kicked off Alameda Research: after a tumultuous hard fork, there used to be a discrepancy between the price of Bitcoin in JPY at a Japanese exchange, and that in a US exchange. So he opened a Japanese account, bought a bitcoin in the US for a low price, and sold it in Japan for a high price.

To be clear, it is described by SBF. I haven’t verified historical prices to confirm it. The journalist that wrote this article probably hasn’t either.

[0]: https://web.archive.org/web/20221110141739/https://www.sequo...

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

#196

Post by largepeepee »

tootie wrote: post #192
ricardou wrote: post #185

Earlier quoted context omitted.

SBF tweeted[1] not too long ago that FTX.us was safe and was 100% liquid. I suppose that wasn't the case? [1] https://twitter.com/SBF_FTX/status/1590709195892195329?t=tQR...

If FTX were a real company that Tweet would be enough to be put in handcuffs by the SEC.

That's assuming SEC enforce their own rules, they are often... Subjective and reactive.

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

#197

Post by cmeacham98 »

gfd wrote: post #188
chlodwig wrote: post #162

Earlier quoted context omitted.

Not exactly, because banks tell you that they will loan out your money and you might not get it back, that's why you get interest on the account. They can't go horse betting, but they can loan it out. You don't have "title" over the USD in the bank reserves. This is like if you put $100 in Chase's security deposit box , and they opened it up, took the cash, and lent it out, and then when you come to get it, they say,…

Only tangentially related, but don't put cash in safety deposit boxes. Police can take them under civil forfeiture laws: https://nypost.com/2021/06/12/fbi-aims-to-keep-valuables-86m... https://www.businessinsider.com/fbi-raid-1400-boxes-us-priva...

Civil asset forfeiture is one of those things that feels really unjust in the US, and I'm somewhat surprised there hasn't been a Supreme Court case ruling it unconstitutional per the 4th Amendment.

I'd love to hear a steelmanned argument in favor of it, maybe I'm missing something obvious?

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

#198

Post by JadeNB »

rootusrootus wrote: post #87
dang wrote: post #67

All: please don't fulminate*. Perhaps you don't owe embattled billionaires better, but you owe this community better if you're participating in it. HN is a site for curious conversation, so please wait to feel some curiosity before you comment. * https://news.ycombinator.com/newsguidelines.html

> fulminate Hearby nominated as word of the day. Excellent.

Since we're talking language, I hope you won't mind my mentioning it's 'hereby'—etymologically literally 'here'+'by'; nothing to do with hearing.

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

#199

Post by SilasX »

chlodwig wrote: post #162
newfonewhodis wrote: post #156

Earlier quoted context omitted.

I put $100 in my Chase account. Chase goes horse betting with my money and loses it all. My account shows $0. That's basically what happened here.

Not exactly, because banks tell you that they will loan out your money and you might not get it back, that's why you get interest on the account. They can't go horse betting, but they can loan it out. You don't have "title" over the USD in the bank reserves. This is like if you put $100 in Chase's security deposit box , and they opened it up, took the cash, and lent it out, and then when you come to get it, they say,…

>Not exactly, because banks tell you that they will loan out your money and you might not get it back, that's why you get interest on the account.

That's not right either. They promise you will get it back (the FDIC insurance), just that e.g. large amounts may have a delay. They are also scrutinized by regulators to ensure that the loans are sane enough not to all evaporate in value overnight, as a horse bet might.

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

#200

Post by zeven7 »

RC_ITR wrote: post #176
fdgsdfogijq wrote: post #173

Earlier quoted context omitted.

Why is this getting downvoted? its a plain speech description of what they did

Because Chase actually does something sort of similar (primarily mortgage lending), but they employ a ton of people to think all day about managing risk. So I think people don't like the comparison, since the true difference is FTX did horse betting, while Chase does something much more rational.

To add to that: Chase tells you what they're doing. FTX told its customers it wouldn't lend it out, and then it did. Additionally, customer accounts at Chase are insured by FDIC up to $250k. Chase tells you they're going to bet with your money, manages the risk well* on most days*, and even if they lose your money you get it back anyway. FTX did the opposite of all that.
Post reply on HN