Countdown to Fried fleeing to Israel begins...
FTX tapped into customer accounts to fund risky bets, setting up its downfall
311–320 of 746 posts
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#312From the article: "FTX Chief Executive Sam Bankman-Fried said in investor meetings this week that Alameda owes FTX about $10 billion, people familiar with the matter said. FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call, one of the people said." In the FTX International terms of service ( h…
> banks at least tell you they are loaning your deposits out
Side not but that’s not really how banking works. Banks create deposits when they originate loans and separately look for the assets they need in order to satisfy any regulatory requirements and net flows of funds for inter bank settlements.
https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#313The 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.
In case anyone wants a link to the thread, here it is: https://twitter.com/SBF_FTX/status/1590709166515310593?s=20&... It was actually in an adjacent paywalled article ( https://www.wsj.com/livecoverage/stock-market-news-today-11-... ). If anyone knows a way to bypass that paywall, I'd be curious to read the rest.
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Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#314Earlier quoted context omitted.
How much is the total liability they are guaranteeing? And $119 billion where exactly? In US treasuries? If so it's about as safe as the social security "fund". What if the "customer issue" includes a govt default? All you're saying here is that we can treat an FDIC guarantee like a govt guarantee, which is probably true, but still not the same as a case where the guarantor has actual assets which the prior poster wa…
> There's not cash laying around anywhere to back it up. Did you not read the part where they have $119.4 Billion dollars? And that was a year-and-a-half ago, it's probably closer to $130B now. It seems like you didn't read any of the source material, let alone my comment, before replying.
...yes I did. Your post at least, which was short and sweet. Bravo. I did not read the wiki article and don't plan to, but I skimmed the other one. Got as far as this at least: "Means and Strategies: The FDIC maintains the viability of the DIF by investing the fund, monitoring and responding to changes in the reserve ratio, collecting risk-based premiums, and evaluating the deposit insurance system in light of an evolving financial services industry."
"DIF fund" being the $119B. In my post I presumed that 119 billion is in US Treasuries. I'm also presuming US treasuries are not the same thing as cash. Whatever the case, generally people don't refer to "cash laying around" as an investment.
EDIT: Try this much more readable doc: https://www.fdic.gov/about/financial-reports/reports/2020ann....
The $119B in assets includes only $3B in cash, with $110B in treasuries.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#315Earlier 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.
Well, your account still shows $100, but Chase has paused withdrawals while they "sort out liquidity issues" so it's effectively $0
Yep, this is exactly what happened en masse during the Great Depression. People were selling their bank account books for a fraction of their nominal value.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#316I think at this point anyone who has any involvement in crypto needs to ask themselves the following question: Are you Molly?
Becuase if not, you're fucked. She's the only one walking out of this shitshow with a reputation.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#317I 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, includin…
This has nothing to do with crypto, it has to do with people sending their money to a con man. If your friend had "his identity tied up in crypto", then why wasn't he holding it himself?
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#318The 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.
In case anyone wants a link to the thread, here it is: https://twitter.com/SBF_FTX/status/1590709166515310593?s=20&... It was actually in an adjacent paywalled article ( https://www.wsj.com/livecoverage/stock-market-news-today-11-... ). If anyone knows a way to bypass that paywall, I'd be curious to read the rest.
Usually you can get a copy of the article by going to archive.ph and pasting the paywalled link.
It may not be most ethical thing to do but if you want to read an article or two behind a paywall, I don't think it is insane to do.
This article though seems to be some kind of a live feed where there is not really a lot archived - maybe it works better for paying users viewing things live.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#319Earlier quoted context omitted.
> 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.
You are absolutely correct. I missed that on my proofread. Kind of lame since it is such a short post.
The older I get, the more I find myself making spelling mistakes based on word pronunciation. Sometimes I use a totally different word than what I was thinking, which makes absolutely no sense unless you read it aloud. Then you realize what happened. Hopefully it is not early onset dementia. Though it would not be -that- early.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#320Earlier quoted context omitted.
So if the chain is supposed to enable "trustless" finance, what enabled Alameda to take anything? Seems Alameda and its clients should be screwed, but FTX's holders should be relatively easy to identify and restore. But everyone seems to say that's not the case. So what broke down here? Why isn't the ledger ledgering?
Maybe you're thinking of Etherium or other smart-contract systems, Etherium is a system where things like that happen automatically. With Bitcoin, the only thing you have is a secure (but static) ledger of who (which wallet/id) has what bitcoins. Any transfers have to be "manually" and just recorded by the blockchain. Of course, the automatic processes in Etherium produce a bunch of other weird effects.
Where does this Etherium-meme(?) come from? I’ve seen several people writing Etherium and Monaro instead of Ethereum and Monero on mailing lists, but never understood what it means and where it comes from.