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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

#451

Post by chaosbolt »

wefarrell wrote: post #231
chlodwig wrote: post #151

From 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…

I’m pretty ignorant when it comes to this space. Do they not have any kind of compliance structure? In hindsight it seems pretty obvious that this sort of thing would happen without it.

>Do they not have any kind of compliance structure?

Not really, but again banks don't have compliance against this either, it's just that people are less likely to withdraw their money from the bank at the same time, and when they do the gov will tell the fed to print more, and with crypto you can't print more, so a bankrun has immediate effects.

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

#452

Post by rglover »

Nursie wrote: post #435
rglover wrote: post #404

Earlier quoted context omitted.

It's a beautiful lesson in human behavior and greed. You're given a perfect form of money (Bitcoin) that you can safely hold with minimal effort and your shortsighted greed ("yield farming") forces you to lose it all to a conman. The silver lining to all of this is that people might actually start listening to Bitcoin maxi's after this year.

> You're given a perfect form of money Ha, wow. Yeah no, Bitcoin is not a perfect form of money at all. It- - uses vast amounts of energy - can only process a few TPS - confirms slowly - has limited quantities which warps economies - is irreversible in cases of theft or fraud - is lost forever if you lose your keys And that's just off the top my head. I get what you're saying - "not your keys not your coins", but the…

- uses vast amounts of energy

Bank branches, ATMs, armored cars, computer systems for the banks, computer systems for card processors, credit rating firms, etc. Bitcoin replaces all of that and, comparatively, for significantly less energy. This is a surface-level argument intended for shortsighted thinkers.

- can only process a few TPS

- confirms slowly

On main net. Lightning network can outpace Visa.

- has limited quantities which warps economies

By warp, you actually mean makes them fair and natural. It encourages free trade, merit, and competition. Not fiendish scamming and Machiavellianism.

- is irreversible in cases of theft or fraud

Which is good. It increases the need for reliable actors in the world and creates a citizenry that's more discerning about whom they spend their money with (i.e., building strong, trustworthy relationships).

- is lost forever if you lose your keys

Which is good. It makes you value it. If I hold all of my money in cash and have a house fire, it's lost forever. No difference.

> For those of us who do not fetishize decentralisation

Slaves?

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

#453

Post by eloff »

chaosbolt wrote: post #445
chlodwig wrote: post #151

From 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…

>poor judgment call >tell people their money is safe then basically steal it by giving it to your friend SBF needs to be thrown in jail, he won't though, for obvious reasons.

Why won't he be thrown in jail? This looks pretty open and shut. The courts will confiscate his assets and jail him. This is quite similar to what happened to Bernie Madoff.

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

#454

Post by eloff »

wslh wrote: post #288
chlodwig wrote: post #151

From 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…

How many years could Sam Bankman-Fried get in jail? It is also interesting to read on his Wikipedia profile [1] about "Bankman-Fried is a supporter of effective altruism and claims to pursue earning to give as an altruistic career. He is a member of Giving What We Can and has claimed that he plans to donate the great majority of his wealth to effective charities over the course of his life.". Having direct access to…

It's easy to be altruistic when it's not your money!

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

#455

Post by CyberDildonics »

leet_thow wrote: post #373
siftrics wrote: post #361

Earlier quoted context omitted.

Literally ~$50 million went straight to the Democratic Party as direct campaign donations. He stated he intended to give up to $1 billion to democrats. Millions more went to various other people in power who will now decide the fate of SBF. Sources: https://www.cnbc.com/2022/10/14/sam-bankman-fried-backtracks... His Wikipedia page.

Interesting. I was reading his bio and noticed the do-gooder activities he and his family are involved with. Funny how they end up defrauding people in the long run.

This is actually a common pattern. Hedge fund manager Kyle Bass has given presentations where he says that charitable works is actually one of a handful of factors they look for when assessing a fraudulent company because the correlation is strong.

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

#456

Post by laluser »

bmitc wrote: post #427
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.

Reminds me of this: https://youtu.be/HQhmGIW7MVU Also, does he not have lawyers or public relations?

I'm sure he thinks he doesn't need one because he is 'acting in good faith'. Completely delusional.

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

#457

Post by pyinstallwoes »

When I see names so highly correlated to the event, it really makes me think along magical lines of thinking or we really are playing in a game.

> 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.

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

#458

Post by PragmaticPulp »

woah wrote: post #317
skullone wrote: post #145

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, 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?

> If your friend had "his identity tied up in crypto", then why wasn't he holding it himself?

Some people love day trading crypto. They keep funds on exchanges so they can trade immediately and not deal with constant back and forth transactions with their own wallet.

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

#459

Post by jjulius »

cma wrote: post #322
chironjit wrote: post #294

Earlier quoted context omitted.

This is the correct answer. When you move your tokens into a centralised exchange like FTX, your funds are pooled with everyones deposit. There are always deposits and wihdrawals, and of course maybe you traded your tokens for another before withdrawing. So its hard to parse how much customers deposited vs genuinely withdrew, and so you cant really tell if the exchange is short unless they declare their actual assets…

From the Sequoia puff-piece: > Something of the sort must happen eventually, as the current system, with its layers upon layers of intermediaries, is antiquated and prone to crashing—the global financial crisis of 2008 was just the latest in a long line of failures that occurred because banks didn’t actually know what was on their balance sheets. Crypto is money that can audit itself, no accountant or bookkeeper need…

Hahahahahahahaha holy fuck.

Disclaimer: I don't usually drop comments like this that don't contribute to anything, but... lmao wow.

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

#460

Post by itake »

anonporridge wrote: post #387
Bilal_io wrote: post #356

Earlier quoted context omitted.

Yup. Not your wallet, not your money.

"Not your keys, not your bitcoin." Some of use have been yelling this from the rooftops for years, but apparently some people simply must learn the hard way.

I’m happy I stored my Terra on Kucoin so I could have an easy exit. During the crash it took hours for Kucoin to confirm UST deposits.

I’ve also lost money in mtGox.

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