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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

#651

Post by [deleted] »

everfree wrote: post #597
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…

I don't see why crypto is incompatible with regulation and institutions. Crypto is a unit of account, not some magical lawless thing that's doomed to never have a regulation written about it. In fact, places like New York already have pretty strict regulations requiring specific licenses for crypto-related businesses. Crypto crises like these are in general due to regulation not having caught up yet, not because comp…

[deleted]

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

#652

Post by killerstorm »

hinkley wrote: post #537
thwayunion wrote: post #491

Earlier quoted context omitted.

> can we STOP the blind short-term speculation on the promise of extreme wealth I first played around with blockchain in 2011 or so and I still don't know what actual utility this technology is supposed to have. I have never -- never -- encountered a value-producing use case for cryptocurrency that can't be solved by either signed git commits or a SQL database. Around 2015 a lot of people I thought were smart enough…

I worked on code that used a Merkle Tree before any of us had heard of a Merkle tree or this blockchain bullshit came around, so I never got starry eyed about any of this stuff. That project was in an environment where chain of custody is an established mechanism for ensuring public safety. Layering a web of trust over the top of that was something the users could mostly digest. Consumers can only use software signed…

A Block header includes a root hash of a Merkle tree of transactions. So yes, it is a tree, if you also consider the useful payload, not just block headers.

Then e.g. in Ethereum there's also a Merkle tree of the entire state as well.

> there's no distributed consensus

Distributed consensus is necessary if you want high availability and replication for your Merkle tree.

If data in your tree is important, you want to replicate it, right? You want to be sure it's stored on multiple nodes.

So this distributed consensus thing, Byzantine Fault Tolerance, it basically gives you a receipt that at least N nodes have this data stored.

You didn't implement it because it takes considerable effort. But if you implemented Merkle tree with high availability, you'd get something very similar to blockchain.

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

#653

Post by piva00 »

qudat wrote: post #636
piva00 wrote: post #581

Earlier quoted context omitted.

> 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.

The same argument can be made for government intervention. I don’t buy it, there are a ton of examples where not only does the gov get it wrong but also have the opposite effect of what they were trying to achieve. Good intentions is not realistic. The systemic issue is education.

Tell me what systemic issues were solved by individual action. I'd really like to hear examples, I've never found them.

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

#654

Post by hnews_account_1 »

vishnugupta wrote: post #628
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…

There’s this incredulous passage from Sequoia article that’s been taken down since. Make of it what you will At this point, mid-2019, SBF decided to double down again—and scratch his own itch. He would bet Alameda’s multimillion-dollar trading profits on a new venture: a trading exchange called FTX. It would combine Coinbase’s stolid, regulation-loving approach with the kinds of derivatives being offered by Binance a…

The super stupidity of using math to dazzle people around you is my greatest lesson from this. In my highly technical field, I can use math without treating it like some precious scripture. But it’s good to know it is so unfamiliar to a normal person in the VC world, I can use it to justify even a startup doing genocide as a platform or something.

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

#655

Post by HDThoreaun »

nocoiner wrote: post #461
prh8 wrote: post #28

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

I will bet you cash money that this is one CEO you’ll see in prison. This is like 10x as bad as anything Elizabeth Holmes did, and as far as I know, she wasn’t tweeting real time as the walls were closing in on her.

I mean I doubt he's ever stepping foot in the US again. Dudes going into hiding and won't be seen.

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

#656

Post by babyshake »

tedunangst wrote: post #418
sillysaurusx wrote: post #3

Does this bankruptcy include FTX US? A bunch of people in yesterday’s thread were saying that FTX US is safe, which seemed strange.

If withdrawals are open, then it seems FTX.us still has all its customers assets and can return them, but will not be able to pay its own bills for hosting, staffing, etc. in the very near term. So yesterdays statement that it wasn't affected by the loss of funds implosion would be accurate, but if the business was reliant on funding from other operations to survive, it can still go bankrupt. People get all antsy in…

I think people are jumping to conclusions by saying that because FTX.us is included in the filing, all user funds are completely gone. Not to say I blame them for thinking the worst, but we'll probably know more once the dust settles.

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

#657

Post by nullc »

AustinDev wrote: post #156
yourMaster_666 wrote: post #66

you cannot make up this shit https://www.reddit.com/r/wallstreetbets/comments/ys4lmo/she_... gold

Wow... I thought this was satire. (when talking about trading) 'We don't tend to have stop losses, we don't see those as very good risk management tools' No wonder they're bankrupt... SBF loaned her company 10 billion to trade without basic risk management for trading.

Prices are not continuous. Stop loss orders are suicide pacts, especially in illiquid markets. They have little to no role in a coherent risk management strategy.

They're primarily marketed to unsophisticated retail traders as providing protection that they can't provide-- something equivalent to a free put.

In fact, some time back their firm was sued for IIRC essentially manipulating markets to trigger traders stop loss orders in order to swallow up trades at unreasonable prices.

Tiny traders in the largest of markets can potentially get away with using stop losses and not get burned too badly too often, but none of the cryptocurrency markets really qualify as that.

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

#658

Post by jfk13 »

derangedHorse wrote: post #591
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…

It seems like you're conflating the value of crypto with the recent blunders of crypto-focused businesses. The fundamental value of cryptocurrency is being able to self-custody tokens of value without relying on any other mechanism besides the proper functioning of the blockchain and its respective rules. What we're seeing here is a lack of clarity/regulation amongst world governments on how crypto and the businesses…

> The fundamental value of cryptocurrency is being able to self-custody tokens of value

Like dollars under my mattress? Sure, self-custody can be useful sometimes. But (almost) anyone with substantial quantities of "tokens of value" generally appreciates that delegating custody of them to a (regulated and insured) institution provides a lot of both convenience and protection that's difficult to replicate with "self-custody".

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

#659

Post by sillysaurusx »

sillysaurusx wrote: post #588
Animats wrote: post #515

Earlier quoted context omitted.

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 Foo…

By the way, that Wasendorf story (Animats’ second link) is quite interesting. He skimmed $200M by forging bank statements and was eventually caught only when the world switched to electronic auditing. Previously he was able to fool everyone by intercepting the snail mail: https://www.forbes.com/sites/walterpavlo/2012/07/13/pfgbests...

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

#660

Post by luckylion »

codegeek wrote: post #609
luckylion wrote: post #580

Earlier quoted context omitted.

Fast, cheap money transfer (theoretically) not requiring trust in any middle man, cutting out bank's control, i.e. "digital cash". I don't know if it's revolutionary, but it has a lot of potential and is great when it works.

"not requiring trust in any middle man" And yet, we have these middlemen like Coinbase and what not. IN theory, decentralized currency is awesome. In practice, almost impossible. Novel idea for sure but it is time we admit that it cannot be implemented without middlemen.

You don't necessarily need Coinbase etc, but yes, they do make everything easier. I meant that you still need to trust the miners who have centralized and aren't guaranteed to be trustworthy.
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