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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

#431

Post by djinnandtonic »

Alupis wrote: post #422
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?

For someone that only dabbles in crypto - what are the reasons people choose to use high-risk exchanges like FTX, and buy even higher risk "sh*t coins" on them? Especially the exchange-created-and-owned coins - of which I have yet to see one actually do what it promised. Is Coinbase just not cool anymore, or is there some advantage to using exchanges like FTX until they go belly-up?

For someone that only dabbles in investing, what are the reasons people choose ultra-high-risk investments like crypto?

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

#432

Post by canoebuilder »

bogomipz wrote: post #365
monkeydust wrote: post #245

He should have just stuck to running an exchange and trying to innovate that game (note - earlier in the year lots of talk around their automated margin plan for wider industry beyond crypto). Theres a decent business there.

What was the "automated margin plan"?

> What was the “automated margin plan”?

And does/would it bring any value into the world, or is it just an effort to keep the plates spinning in the multi dimensional scam crypto has become?

Genuine question btw, if there is a real business there, does it serve the interests of broader society in any way?

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

#433

Post by systemicdanna »

shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

Regarding his exit plan: not sure if you will find a good answer right now. One way to get some insight into this type of mental game is to read about other major scammers who just couldn't help themselves and got too deep to pull out. Bernie Madoff comes to mind, and there are many books written about him and his business.

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

#434

Post by paxys »

indigodaddy wrote: post #332

Dumb question, but what happens to stuff like Miami Heat’s FTX Arena etc in situations like this? Should we expect a name change for the arena at some point soon?

Two possible outcomes:

- They miss their next payment and the contract is terminated. The arena owners find a new sponsor.

- The naming rights are considered an asset of FTX and are sold off during bankruptcy proceedings to recover cash. The buyer puts their own name on the arena for the rest of the contract term.

Considering naming rights are sold for such lengthy terms (20 years in FTX's case) it is incredibly common for companies to go under or get bought out in the middle of it.

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

#435

Post by HDThoreaun »

Alupis wrote: post #422
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?

For someone that only dabbles in crypto - what are the reasons people choose to use high-risk exchanges like FTX, and buy even higher risk "sh*t coins" on them? Especially the exchange-created-and-owned coins - of which I have yet to see one actually do what it promised. Is Coinbase just not cool anymore, or is there some advantage to using exchanges like FTX until they go belly-up?

Coinbase doesn't offer the leverage that offshore exchanges do. FTX was popular originally because they offered 100x leverage, later reduced to a maximum of 20x. They also had better spreads, probably because they were making their own market and had inside info. I think that people generally didn't expect FTX to be high risk. It's got a profitable business, all they had to do was not embezzle customer funds.

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

#436

Post by glofish »

shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

denial is a powerful drug,

you are surrounded by people celebrating your genius, everything you touch turns to billions and billions

it is easy to see how someone gets disconnected from reality and ends up living in the metaverse of their own genius

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

#438

Post by Alupis »

djinnandtonic wrote: post #431
Alupis wrote: post #422

Earlier quoted context omitted.

For someone that only dabbles in crypto - what are the reasons people choose to use high-risk exchanges like FTX, and buy even higher risk "sh*t coins" on them? Especially the exchange-created-and-owned coins - of which I have yet to see one actually do what it promised. Is Coinbase just not cool anymore, or is there some advantage to using exchanges like FTX until they go belly-up?

For someone that only dabbles in investing, what are the reasons people choose ultra-high-risk investments like crypto?

That one is easy... FOMO - Fear Of Missing Out. People see the 10,000%+ returns extreme early adopters obtained and think they need to get in before the good-getting is done. Most of the time they're wrong and just throwing money into dark pits...

"Gamified" trading apps like Robin Hood have made it all too easy to feel much lower risk that it is in reality though.

For the rest, crypto can be part of a diversified investment strategy. Not all crypto is outright scams... but you do need to be able to handle the volatility.

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

#439

Post by jacooper »

shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

I think he just though that he will never get caught, it was working for a long time, why would it fail?

Also why are there no lawsuits yet? Since FTX clearly broke its own T&S?

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

#440

Post by nocoiner »

rrrrrrrrrrrryan wrote: post #202
rippercushions wrote: post #91

Earlier quoted context omitted.

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

It actually gives Enron a run for its money: https://www.researchgate.net/profile/Hamid-Ekbia-2/publicati...

That’s actually just a tiny, tiny subset of the overall Enron corporate structure. The chart you linked just shows the capitalization and ownership of one of the off-balance sheet structures that Enron used to conceal debt. This structure was capitalized with Enron stock, which worked great as long as the price kept going up, but once the value of that stock fell beneath a certain value, the single-purpose entity used here became insolvent and accounting rules (finally) required that that debt be consolidated back onto Enron parent’s balance sheet.

It’s a situation with many interesting parallels in the crypto industry. Not only does history rhyme, but sometimes it really does repeat.

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