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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

#681

Post by everfree »

kgwgk wrote: post #677
everfree wrote: post #607

Earlier quoted context omitted.

> it's not like regulation saved them from being able to become insolvent. It may have, in a way. It's too early to tell, but it's possible that FTX's USA-based corporation ("FTX US") is still solvent. I believe it's the Bahamas-based entity that's in bankruptcy - the one that's in an offshore haven not subject to US regulations. Edit: Looks like FTX US is bankrupt too, but still it may or may not be solvent.

FTX US is included in the bankruptcy proceedings.

Thanks, I just read that elsewhere in this thread.

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

#682

Post by adamsmith143 »

notinfuriated wrote: post #312
adamsmith143 wrote: post #169

Earlier quoted context omitted.

"We don't really use math" Guess their entire trading strategy was hurr durr the coins go up. Completely unsurprising they lost their asses when gasp the coins stopped going up.

She was referring to the type of math that she did to earn a math degree, which I suppose could be true. My math degree did not require any of the kind of math I assume they do at these kinds of exchanges, although I also assume that the whole branch of math that starts getting into modeling and analysis would be very useful in these sorts of companies.

Didn't she literally say they use elementary school math right after that?

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

#683

Post by hotcoffeebear »

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…

What you regulate; cryptocurrency exchanges, cryptocurrencies or decentralized exchanges?

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

#684

Post by rapht »

I know little by way of the crypto world, but I have to say that calling platforms like FTX, Binance, and others "exchanges" strikes me as very much misleading.

In traditional finance, the "exchange", as in "the New York Stock Exchange", only facilitates the calculation of market prices for a range of assets and the matching between sellers and buyers. Exchanges don't even manipulate money - that's left to other, highly regulated, professions, such as brokers.

Brokers hold your assets and sometimes lend you money, but are very restricted with what they can do with it unless they qualify as banks, which requires complying with an array of complex capital requirements.

So really, I don't understand: how are those entities not offering "investment services" and so not under SEC supervision?

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

#685

Post by beambot »

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…

Quick detour: expected value alone does not optimally maximize your long term outcome. Bet sizing (a la Kelly Criterion) is just as critical.

E.g. if you had a weighted coin that was 50-50 odds with 3-to-1 payout, you wouldn't bet your whole bankroll on just one flip.

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

#686

Post by systemicdanna »

woah wrote: post #302
gjsman-1000 wrote: post #90

Earlier quoted context omitted.

It's funny. Banks are widely perceived as corrupt; and lo and behold, the alternative systems to replace banking have been dragged by their heels through Banking 101. Edit: Also funny, was the unrelated Matt Damon TV ads about how "Fortune Favors the Brave." Obviously it comes from Caesar, but it was also used in Charles Dickens's Little Dorrit by a character encouraging what later turned out a Ponzi scheme...

FTX WAS a corrupt bank/betting parlor. Cryptocurrency is about self custody and full transparency. This is what blockchains allow. FTX was people depositing money in SBF's personal piggy bank. FTX has nothing to do with crypto, other than the fact that it allowed people to bet on crypto prices.

A crypto exchange had nothing to do with crypto?

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

#687

Post by seydor »

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…

Or maybe it is the opposite? Why did (institutional) investors trusted and funded this ... thing so much? Maybe the fact that the Founder was literally born inside academic elites has something to do with it?

The guy who is supposed to have "won" this , is running an exchange apparently banned by china, largely disliked by regulators and disinvited by governments, and not funded by any government or large investors, right?

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

#688

Post by coffeebeqn »

nullc wrote: post #617
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…

> This may be the biggest embezzlement of customer funds held in custody in history. I wouldn't be surprised to learn that the amount of actual customer funds that went in were much smaller than claimed. Keep in mind FTX was mostly 'perpetuals' -- fake assets. It might be that a lot of the customer funds were just fictional gains, also may be that a lot of them were paper value owned by SBF entities. I've been trying…

How about everyone with assets stuck in FTX that can’t withdraw them? When your accounting is fictional it might be hard to pinpoint who’s money went where but everyone got screwed in the end

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

#689

Post by benjaminwootton »

AustinDev wrote: post #489
ftx_no_name wrote: post #275

I'm one of customers that have money on FTX international which I cannot withdraw. (yup i know. bad decisions etc, but i knew the risk). Do you guys know, what will happen with the funds? Will I as a customer get any of my money back? (do you know if I'm a secured creditor?)

MTGOX blew up in Feb 28, 2014. I had ~100BTC there. I've yet to receive a dime. Just as a point of reference.

A cool $2 million, $6 million at peak. Maybe one day you will get the call….

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

#690

Post by everfree »

hotcoffeebear wrote: post #683
everfree wrote: post #597

Earlier quoted context omitted.

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…

What you regulate; cryptocurrency exchanges, cryptocurrencies or decentralized exchanges?

Companies, of course.

Edit: Businesses, more specifically.

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