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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

#711

Post by wmf »

null0pointer wrote: post #697
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…

This is pretty clearly not a failure of cryptocurrency. Bitcoin et al. are still chugging along just fine. This is, once again, a failure of a centralized business in which people placed way too much trust. I hope SBF, and other "crypto" company execs, are held accountable for misleading customers about their offerings. Specifically calling it crypto when it's not.

Cryptocurrency failed to be fast enough to support sophisticated DEXes. This failure created the need for FTX.

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

#712

Post by wmf »

hn_throwaway_99 wrote: post #708
null0pointer wrote: post #697

Earlier quoted context omitted.

This is pretty clearly not a failure of cryptocurrency. Bitcoin et al. are still chugging along just fine. This is, once again, a failure of a centralized business in which people placed way too much trust. I hope SBF, and other "crypto" company execs, are held accountable for misleading customers about their offerings. Specifically calling it crypto when it's not.

1. BTC has cratered 20% in the past couple days. I know, par for the course for crypto, but also a good example of why it doesn't share standard features of real currencies. 2. All the "not your keys, not your coins" mindless chanting misses the point. While true, a modern financial system depends on being able to have trust in financial institutions if you actually need to move money quickly. Years ago I went the "m…

Cold storage is kind of an old concept. Now there are multisig variants and tools like Fireblocks to allow active trading without being immediately hacked.

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

#713

Post by deltree7 »

bogota wrote: post #710
VHRanger wrote: post #703

Earlier quoted context omitted.

Bitcoin failed, though? All the proposed usecases except speculation and censorship resistant wealth transfers (eg. getting money out of Russia) have been abandoned.

I used bitcoin to remit money to another country just yesterday.

While losing a ton of money during this process

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

#714

Post by kranke155 »

TacticalCoder wrote: post #665
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…

> Can anyone speculate what Bankman-Fried's exit plan was? I can speculate based on recently revealed facts. SBF did grease politicians to the tune of 40 million USD in political donations. Several have described these donations as: "bribes" (I'll let you judge). (as a sidenote I wonder if these politicians are going to give these donations back to the people SBF scammed). A US congressman, as reported here several t…

This is all very interesting. I am also starting to wonder whether CZ had a good idea this would happen because maybe Binance is structured similarly.

Basically - is Binance solvent? I don’t know.

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

#715

Post by johnp314 »

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…

"Can anyone speculate what Bankman-Fried's exit plan was?"

SBF contributed millions to democrat candidates in the recent elections. Perhaps his exit plan was legislation to bail him out.

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

#716

Post by friend_and_foe »

Philip-J-Fry wrote: post #416
friend_and_foe wrote: post #264

Earlier quoted context omitted.

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…

It seems like a fundamental flaw in their business model rather than a market downturn. This seems like a bigger deal to me because FTX is part of then new wave of crypto companies that were supposed to be legitimising crypto. And even they can't stay afloat. It's just a matter of time before the next crypto giant falls.

Every time there's a bull market a hundred new operations spring up. And some of them always present themselves legitimately, and most of them always fail when the downturn comes. This is a run of the mill downturn, it happens every single time. A ton of "crypto giants" don't survive the downturn, every single time.

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

#717

Post by coffeebeqn »

crypt1d wrote: post #255
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?

Its hard to tell, but looks like the fall out is far from over. There are a lot of rumours running around so unsure what is true and what is not, but we've gotten confirmations from a lot of crypto companies to be affected one way or another. Genesis (a big OTC trading company) lost about 160M but their parent company wrote them a check. BlockFi seems to be in the hole and has closed withdrawals. Blockfolio (an FTX o…

FTX also bailed out a ton of crypto companies. Now I don’t know what those deals were like but it’s likely some of these will fold soon

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

#718

Post by bwestergard »

everfree wrote: post #647
bwestergard wrote: post #606

Earlier quoted context omitted.

Why bother with proof of work or proof of stake mechanisms if you want political regulation? In that case, you might as well empower a state's central bank to develop a payment mechanism, and task them with ensuring fairness and enforcing laws around taxes, illegal activity, etc.

You're right in that if all we wanted was a domestic payment network, blockchain consensus mechanisms would be overkill and introduce unneeded overhead. Personally, I'm excited about the FedNow payment service coming online in the USA next year. Perhaps I'll finally be able to easily send money from bank to bank without involving third party fintechs like PayPal and Venmo, and without waiting a day or two for ACH. Ho…

We can have an international unit of account through, e.g. Special Drawing Rights. This makes plain the political bargains struck to ensure international economic stability. Crypto alternatives would have the same political valence as a return to the gold standard, which was abandoned to avoid the crisis potentials peculiar to it.

The most influential statement of your proposal is Hayek's article "Choice in Currency: A Way To Stop Inflation"[1] which he later expanded on in "Denationalisation of Money".

Hayek's views have an admirable internal consistency, but his political premises are contrary to the core values of almost every pre-industrial society, and of the social democratic tradition in Europe which has been internationally influential.

Very few people understand the full scope of Hayek's political vision, which is premised on a thoroughgoing skepticism toward the very possibility of rational democratic deliberation. If they fully understood his proposal's implications, I doubt they'd support them; but certainly there are some who are willing to fully own their anti-democratic implications.

1: https://iea.org.uk/publications/research/choice-in-currency-...

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

#719

Post by lazide »

stripedfish7 wrote: post #623
lazide wrote: post #611

Earlier quoted context omitted.

Crypto is incompatible with regulation and institutions because it was designed to be, and is consistently a part of the ethos espoused by pretty much all crypto players? Literally, the first sentence in the Bitcoin whitepaper (which arguably kicked off 'crypto' as a thing) is "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going thro…

I don't understand your point. My grandfather tries to use only cash which allow 'payments to be sent directly from one party to another without going through a financial institution'.

Which every financial institution and western government keeps trying to get rid of because it is essentially impossible to regulate or police?

And which cops have a nasty tendency to seize on sight in the US if seen in any significant quantity (outside of an armored car) because ‘proceeds of crime’?

And pretty much every drug transaction, illegal sexual transaction, whatever is done in cash? To the point most major crime shows and drama shows have scenes involving some massive pile or duffel bags or whatever of cash as a plot point?

Cash on the barrel head is the textbook definition of ‘difficult to regulate’.

Also, most people buying person to person used cars and doing yard sale transactions use it too, of course.

It’s not a requirement that Cash transactions involve a crime at all. Same with crypto.

If your transaction is illegal though, using Venmo seems pretty dumb.

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

#720

Post by airstrike »

bogota wrote: post #710
VHRanger wrote: post #703

Earlier quoted context omitted.

Bitcoin failed, though? All the proposed usecases except speculation and censorship resistant wealth transfers (eg. getting money out of Russia) have been abandoned.

I used bitcoin to remit money to another country just yesterday.

I used PayPal to remit money to another country just yesterday
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