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FTX to file for U.S. bankruptcy, CEO resigns

reuters.com

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Re: FTX to file for U.S. bankruptcy, CEO resigns

#241

Post by adam_arthur »

khuey wrote: post #96
rippercushions wrote: post #85

Earlier quoted context omitted.

There are 130 (!) companies in the FTX group, across a whole slew of jurisdictions: https://i.redd.it/078p4g7m6cz91.jpg The Chapter 11 filing is for the ones in the US, working out what this means for the rest is going to keep a whole lot of lawyers very busy for years.

The Chapter 11 filing is for pretty much the entire group including ex-US companies.

FTX US is also part of the filing, per SBF's tweet

1) Hi all:

Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.

https://twitter.com/SBF_FTX/status/1591089317300293636?s=20&...

Re: FTX to file for U.S. bankruptcy, CEO resigns

#243

Post by camjohnson26 »

gvb wrote: post #201
ransom1538 wrote: post #143

Anyone here able to do a tl;dr; for us? The FTX story is super confusing. Why are they screwed? What happened?

"The FTX-Alameda nexus" https://www.coppolacomment.com/2022/11/the-ftx-alameda-nexus... Excellent explanation. Appears to be confirmed by the WSG "FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall" https://archive.ph/nZNmw Original: https://www.wsj.com/amp/articles/ftx-tapped-into-customer-ac...

From the marketwatch article it sounds like this was essentially a hostile attack from Binance, first dumping the token to collapse the price, then pretending to be interested in an acquisition to keep FTX from looking at other emergency measures, then pulling out at the last minute.

Compare this to traditional finance with events like the collapse of Lehman, then Bear Stearns, with Morgan Stanley next in line to fall. Their competitors stepped in, with a major push from the Fed, to prevent the collapse because they knew it would trigger a domino effect that would crash prices and bring them all down. Binance seems to be doing the exact opposite.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#244

Post by PheonixPharts »

ldjkfkdsjnv wrote: post #27
memish wrote: post #4

The CEO of Alameda said "we tend not to have stop losses... I'm trying to think of a good example of a trade where I've lost a ton of money... I probably don't want to go into specifics with that" https://twitter.com/ApeDurden/status/1590912098871435265 Now how did this place end up managing billions of dollars and SBF the darling of politicians? The picture is starting to come into focus. SBF used customer funds to…

This is actually generally how finance works though. The whole industry is built on the illusion of superior competence. "Prestige" is a determining factor in someones ability get a job running a hedge fund/financial asset management. Generally they need to have gone to the right school, worked at the right bank, then at the right hedge fund. Each should show a good amount of tenure ( > 3-5 years ). A major asset man…

To see this all you have to do is interview at a few "prestigious" financial companies.

A while back I interviewed with one of the top trading firms. It was for a lower level position that I normally wouldn't take but I was excited about the prospect of working with some truly brilliant quants.

Wow was I disappointed. The discussion with the quants quickly relieved that they had absolutely zero interest in their field, and not a particularly deep understanding of the fundamentals of the mathematics they were using. It became clear that their entire course of study was focused on getting in to high paying financial company, and all the things they had to learn on the way there were just boring prereqs.

I've met a lot of really talented and smart applied math people over my career, and this quant team was not in that groups of people.

That said all the engineers I chatted with were great. My takeaway was that these companies do need talented engineers to run these systems but the "brilliant quants" is more or less just, as you say, the illusion of superior competence.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#246

Post by solardev »

hotpotamus wrote: post #232
memish wrote: post #216

Earlier quoted context omitted.

Like Elizabeth Holmes, they are kids of the elite who are well connected and supported at high levels. Further, SBF is one of the biggest political donors and there may be corruption in the SEC. The general counsel of FTX US had served as lead counsel to Chairman Gensler at the CFTC. And then there's this from a congressman yesterday, "@GaryGensler runs to the media while reports to my office allege he was helping SB…

Quoted post unavailable.

He probably means "looking into how I can get in on it"

Re: FTX to file for U.S. bankruptcy, CEO resigns

#247

Post by B4CKlash »

rippercushions wrote: post #91
chinathrow wrote: post #62

Earlier quoted context omitted.

130 companies? What did they for a living? Collect companies each time a new month began?

Gaze on the beauty of this chart and despair: https://i.redd.it/078p4g7m6cz91.jpg

To be fair, any billion-dollar multinational will have an organizational chart that looks very similar to this. Companies like EY exist, almost purely, to create 'tax effective' structures with hybrid debt instruments and service agreements.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#248

Post by SantalBlush »

throwaway0asd wrote: post #121

Where were the adults in any of this and why would people throw billions of dollars at unqualified children?

>why would people throw billions of dollars at unqualified children?

Because investors had too much cash and became increasingly desperate to earn a return on it. When they have an abundance of cash, they become wreckless and wasteful with their investing as they chase profits.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#249

Post by gonehome »

The best write up for what’s going on is Matt Levine’s Money Stuff column in Bloomberg (imo).

You can sign up to get the newsletter for free, but it’s sometimes paywalled on the site (it’s a great newsletter for finance anyway).

The most recent: https://www.bloomberg.com/opinion/articles/2022-11-10/ftx-is...

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