FTX to file for U.S. bankruptcy, CEO resigns • Hacker News Board

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

#281

Post by systemicdanna » Fri, Nov 11, 2022, 4:36 PM UTC

triceratops wrote: post #260

prh8 wrote: post #28

Was this another CEO "taking all responsibility" without any actual responsiblity/penalties? Not counting resigning.

Other than resigning, what more responsibility can someone take for a professional failure?

In some circles resigning from a failed tech venture is not seen as a failure. WeWork CEO resigned and is now promoting a new fully funded company in the same space.

FTX CEO has been openly lying about the impact for a long time now, and has mismanaged billions of dollars (of other people's money). Resigning doesn't seem like a reasonable punishment.

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

#282

Post by jasonwatkinspdx » Fri, Nov 11, 2022, 4:36 PM UTC

guelo wrote: post #37

Why are they filing in the US? I thought they were Bahamas or Hong Kong besides ftx.us

The US company may be the only part of SBF's portfolio that's worth anything at this point. I assume it's inevitable it gets pulled in.

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

#283

Post by nemo44x » Fri, Nov 11, 2022, 4:36 PM UTC

friend_and_foe wrote: post #264

nemo44x wrote: post #72

This whole thing is just the .com crash all over again. Super Bowl ad’s the same year of the crash even. I happened to be at a hotel earlier this year that was hosting a crypto conference and the attendees looked like the kinds of people a multi-level marketing scheme attracts. Very different from a few years ago.

You must not have been following cryptocurrency for that long. This sort of thing happens every 2-3 years. This isn't a wild, unforseen crazy market calamity, this is your run of the mill downturn, this ones mild so far actually. You're only hearing more "bloodbath" talk because the news covers it nowadays, and the news loves to exaggerate bad things and make them sound worse because that's how they keep the lights o…

I’ve held BTC since 2011 so I think I get it. My point is the industry around it collapsing. It’s not just crypto crashing but the industry built around it collapsing at scale. This isn’t Mt.Geox level - this is .com level.

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

#284

Post by whimsicalism » Fri, Nov 11, 2022, 4:36 PM UTC

pmoriarty wrote: post #63

ldjkfkdsjnv wrote: post #27

Earlier quoted context omitted.

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…

"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" It's not just finance, people everywhere are impressed by a prestigious background, and assume if you can drop certain names on your resume you must be great. Such names will open all…

It's bigger in fields where you need to get rich people to hire you: ie. consulting & finance.

Fields like tech are nominally more meritocratic.

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

#285

Post by OptoContrarian » Fri, Nov 11, 2022, 4:38 PM UTC

faefox wrote: post #87

I've seen some comments saying that this is all delayed fallout from the Luna/Terra collapse last spring, it's just that FTX had the means (its own token that it could pump and move around its own entities) to paper over the hole in its balance sheet until now. Can anyone more familiar with the situation elaborate? How much further will the contagion spread?

Scoopy in the Alchemix discord had this to say: "If you are on any CEX or CeFi app or earn product, get out RIGHT NOW. Rumors are swirling and it is possible that none of them are solvent.

I am not kidding, really, get out now. I care too much for our community to not have said anything to warn you."

Not sure what that all entails.

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

#286

Post by [deleted] » Fri, Nov 11, 2022, 4:38 PM UTC

friend_and_foe wrote: post #264

nemo44x wrote: post #72

This whole thing is just the .com crash all over again. Super Bowl ad’s the same year of the crash even. I happened to be at a hotel earlier this year that was hosting a crypto conference and the attendees looked like the kinds of people a multi-level marketing scheme attracts. Very different from a few years ago.

You must not have been following cryptocurrency for that long. This sort of thing happens every 2-3 years. This isn't a wild, unforseen crazy market calamity, this is your run of the mill downturn, this ones mild so far actually. You're only hearing more "bloodbath" talk because the news covers it nowadays, and the news loves to exaggerate bad things and make them sound worse because that's how they keep the lights o…

[deleted]

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

#287

Post by Emma_Goldman » Fri, Nov 11, 2022, 4:38 PM UTC

jfdbcv wrote: post #259

faefox wrote: post #87

I've seen some comments saying that this is all delayed fallout from the Luna/Terra collapse last spring, it's just that FTX had the means (its own token that it could pump and move around its own entities) to paper over the hole in its balance sheet until now. Can anyone more familiar with the situation elaborate? How much further will the contagion spread?

[RUMOR - UNCONFIRMED] People are saying that Alameda Research lost a lot of money due to Luna / Terra and were bailed out by FTX user funds, a loan with FTT as collateral.

This is my sense of what happened.

Alameda's bets went bad in the crypto crash earlier in the year. FTX loaned it up to $10bn in customer deposits against trumped-up collateral (its own token). Somehow, Alameda must have lost most of that money, either by using it to cover its liabilities from the crash, or making more bad bets. When it was leaked to Coin Desk that Alameda's balance sheet was padded with FTX tokens, confidence in the token rapidly collapsed. That obliterated the collateral protecting FTX's loans, ripping open a ~$10bn hole in its finances.

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

#288

Post by systemicdanna » Fri, Nov 11, 2022, 4:38 PM UTC

onlyrealcuzzo wrote: post #204

mayankkaizen wrote: post #200

Earlier quoted context omitted.

I am 100% sure he must have siphoned off some sizable part of his net worth in cash or other non-crypto assets.

Several million dollars is a lot of money - but not sizable compared to $16B. If he siphoned off even 1% ($160M+)- you can bet he's going to lose it in bankruptcy proceedings.

10-20% is not $160M+, it's $1.6B+.

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

#289

Post by krupan » Fri, Nov 11, 2022, 4:40 PM UTC

jmyeet wrote: post #236

So for "normal" financial institutions (eg banks, mutual funds, brokerages) you are legally required to shield custodian assets. They rea typically held in trust. Due to various scandals there's a lot of regulation. There's even government protection (to a point) for individual customers (eg FDIC insurance for bank depositors). All of this is necessary to stop situations like FTX/Alameda. A bank can't take your money…

Everything you say is true.

I would like to clarify that the regulations on "the financial system" have probably enabled just as much fraud as they have prevented over the long run. The financial system you speak of is a huge collection of bets and leverage and interesting interpretations of the truth ("why yes, your money is 'safe' with us!"). The regulations make it work just barely well enough that it only comes crashing down, what, every 10 or 20 years now? If instead of adding regulations and saying, "there, now it's totally going to work, put your money back in," I wonder what things would look like if we had instead said, "yup, loaning your money to banks/corporations/governments/individuals is super risky, learn from past mistakes!" ? Maybe people would only risk what they can actually afford to lose and we wouldn't get into these cycles where people get over leveraged, things crash, bankruptcy gets declared, and the poor and middle class foot all the bills. Over and over and over. A libertarian can dream...

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

#290

Post by saddlerustle » Fri, Nov 11, 2022, 4:40 PM UTC

tppiotrowski wrote: post #268

I still can't reconcile how fast this happened. Back in April SBF was willing to give billions to buy Twitter. It seemed like there was plenty of surplus or was the money he planned to invest just FTX customer holdings? "Musk responded to the text by asking if Bankman-Fried had “huge amounts of money?” MacAskill said SBF was worth about US$24 billion at the time and could be willing to provide as much as US$8 billion…

FTX was making a killing, so its token that paid out trading fees was worth a lot. To bail out trading losses in Alameda, FTX sent it cash in exchange for a bunch of its own token. This might have worked out fine, except now the moment everyone expects FTX to go bankrupt, it's bankrupt.