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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

#581

Post by piva00 »

qudat wrote: post #544
twblalock wrote: post #528

This has been a wonderful social experiment, enabling people who didn’t live in the 19th century to see what happens when banking and investing is treated like the wild west. Maybe something could have been different this time? In the end it wasn’t, and it proves the necessity of regulation and institutions. There aren’t very many other aspects of our society where we get to have that kind of experiment and find out…

Hmm, I’m not sure about your conclusion. I would rather see people be more scrutinizing when giving their money to others. It doesn’t matter if there are rules and regulations, people are always going to be duped. When I read about FTX I just think that people need to be better educated. Maybe one could argue that the rules and regulations are specific to providing consumers with tools to make educated decisions abou…

> I would rather see people be more scrutinizing when giving their money to others.

"I just wish everyone is better" is never a solution for anything that has mass appeal/is used by the general public. You can't ever depend that individual actions will solve a systemic issue, it's not realistic.

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

#582

Post by gonehome »

boshalfoshal wrote: post #508
gonehome wrote: post #299

Earlier quoted context omitted.

He worked at Jane Street prior to starting his own company which was built on a successful arbitrage. Whatever his issues - qualification isn’t one of them. I’m not defending this catastrophe (which seems like it was partly an execution by a rival), but this kind of comment is just bizarre on hacker news in the world of tech companies and startups. Age is not a good proxy for competence.

Don't know why you are getting downvoted. Yes, I believe that using customer funds to punt shitcoins at a supposed "quant market making firm" is really dumb, but people here really think the people in this operation are random idiots/got there via underhanded means. I think they just believed that the gravy train would last longer than they thought. Several Alameda employees worked at JS, which is by far one of the m…

The median HN user isn’t that bright and this topic in particular is one where the noise is such that the comments here are atypically bad.

The outliers are great and make this site worth it, but on some topics (of which crypto is one) they’re hard to find.

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

#583

Post by barkingcat »

twblalock wrote: post #528

This has been a wonderful social experiment, enabling people who didn’t live in the 19th century to see what happens when banking and investing is treated like the wild west. Maybe something could have been different this time? In the end it wasn’t, and it proves the necessity of regulation and institutions. There aren’t very many other aspects of our society where we get to have that kind of experiment and find out…

even the idea of "declaring bankruptcy" is a modern regulated construct.

In medieval times, if you "declare bankruptcy" your family and dependents get sold into slavery and your wife is sold off to the highest bidder who will buy your debt.

In many previous times, if you couldn't pay debts you'd just be killed.

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

#584

Post by toomuchtodo »

btilly wrote: post #408
toomuchtodo wrote: post #339

Earlier quoted context omitted.

Tether might be able to plug the hole depending on how big it is if treasury rates rise fast enough for returns to paper over their previous asset allocation or mismanagement mistakes, and redemptions don’t exceed assets on hand.

Well patio11 just came out with a whole article of BAM about leverage: https://bam.kalzumeus.com/archive/demystifying-financial-lev... The point of this article was to make the consequences of the following statement clear: And now you know enough to understand what I'm saying with an otherwise opaque statement like "Tether is 35:1 levered on risky assets during market contagion." Yes, if everything goes Tether's way…

Ahh, they’re fucked. Thanks for the link.

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

#585

Post by rchaud »

WXLCKNO wrote: post #137
rippercushions wrote: post #91

Earlier quoted context omitted.

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

Is this just the natural outcome of running a multi billion dollar crypto business? Do you hire so many experts and lawyers that they set this up for you as an ideal structure? Seeing how stupid/greedy SBF was, it makes me wonder if people like him are smart enough to truly understand the need for such structure without having experts in place.

SBF would be a nobody without Sequoia and others throwing money at him. I'm more concerned about the judgment of monied people who are so desperate to find their own Adam Neumann, that they forgo common sense and invest based on 'feel'.

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

#586

Post by friend_and_foe »

halfmatthalfcat wrote: post #564
friend_and_foe wrote: post #556

Earlier quoted context omitted.

But it's not collapsing at scale... not yet anyway. It's just one exchange, a big one but just one going under. It's scams and rug pulls predictably going under, same story as the last cycle. The only difference is that the news is covering it, it makes it seem like a bigger deal than it is. And you want them to go under. When the scams stop going under is when you have a real problem, because that means the entire i…

The path toward Binance and Tether's ultimate collapse is not hard to see, which would almost guarantee the collapse of the whole system.

Why would it collapse the whole system? These blockchains run themselves, the ones worth a shit anyway. They were here before these companies, there's nothing fundamental that prevents them from being around after.

I am not really convinced of Tether having trouble anymore. I've been hearing it for years. They seem to have gotten lucky and cleaned up their act before collapsing, every time they do an audit or anything the last few years they show full collateral backing their assets in circulation. With regard to binance, I couldn't tell you one way or another, but they've survived more than one cycle so they probably know what they're doing.

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

#587

Post by bombcar »

bmitc wrote: post #401
boeingUH60 wrote: post #30

Earlier quoted context omitted.

This guy is such a serial liar...I wonder why he doesn't have a lawyer advising him to avoid making statements on a public platform at this point.

His parents are law professors at Stanford. It’s crazy. You think they’d make a call and tell him to just stop.

I'm sure they have; does this look like someone who would listen to his parents?

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

#588

Post by sillysaurusx »

Animats wrote: post #515
jacooper wrote: post #439

Earlier quoted context omitted.

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?

U.S. Department of Justice lawyers are already closing in.[1] Using customer funds held in custody is theft. Period. People go to jail for this. This may be the biggest embezzlement of customer funds held in custody in history. Most scams involve misuse of funds invested, not just held in custody. The biggest outright theft of this type seems to have been Peregrine Financial.[2] That was $200 million, far smaller tha…

I just want to say, you have some of the most fantastic coverage of events like this.

It feels like having an investigative journalist on payroll. The delay between an Animats comment and this showing up in the news is significant. Thank you!

(I remember your comments about the CEO that forged pay stubs being similarly excellent. Someday it might be worth collating them. In the meantime, whenever Animats says CEO Foobar is going to prison, Foobar had better start mentally preparing themselves for the journey.)

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

#589

Post by wj »

brianbreslin wrote: post #498
nu11ptr wrote: post #492

Earlier quoted context omitted.

As I understand it, their primary "trade" was to buy and hold FTT. Suddenly FTT's value went "poof" and the rest is is history.

I think that would only explain $4B or so, they said their hole was $10B. Or do we think the FTT leverage multiplied the exposure?

I don’t even understand why FTT existed?

I also don’t understand why there are competing cryptocurrencies? Without governments and borders, shouldn’t one standard currency be enough? (Technical challenges aside)

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

#590

Post by Animats »

rurp wrote: post #549
Animats wrote: post #389

"Voluntary Chapter 11" in Delaware. Figures. That gets them out from bankruptcy in the Bahamas, which is much tougher than US law. The Bahamas still has classic tough bankruptcy laws, where there's no debtor-in-possession reorganization. It's straight to liquidation, with a court-appointed receiver in charge. This should be, and may be, converted to a straight liquidation. Chapter 11 can be useful for restarting comp…

> We strongly advise against depositing Wait, withdrawls are completely frozen and the company is done for, but they are still accepting deposits?!

They've at least turned off signups.

There are still people who believe. This is the top comment on FTX on Coinmarketcap, posted yesterday:

$FTT -- Take a screenshot of this post

1. Someone is going to buy out FTX and this exchange is not shutting down. By someone I mean Elon Musk kind of people.

2. No. FTT isn't going to wipeout if we talk about the fall, most of the cryptos have all fallen significantly. So a crypto going down from $24 to $3 doesn't mean the are going out for good.

3. $8 Billion Dollars as some here are fidgeting to understand isn't a large number if you look at the entire market cap of the crypto sitting at $800 Billion and $3 Trillion sometime back.

There are people who truly believe. And there are those who exploit that belief.

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