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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

#831

Post by ryanSrich »

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?

I don't think people realize how big of a collapse UST was. $18 billion market cap that vanished in a week. The fact that Do Kwon is not in jail yet is astonishing to me. FTX by comparison is on the hook for $10 billion, about half of the UST collapse. Everything we're seeing is a result of Do Kwon's scamming.

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

#832

Post by tptacek »

saurik wrote: post #763
tptacek wrote: post #146

Earlier quoted context omitted.

What about this story seems cinematic to you? This is a Ponzi scheme participant who didn't even deny being a Ponzi scheme participant in interviews.

I think the connections with the Effective Altruism community would make for a really amazing think-piece on conflicting ethics, circuitous reasoning, and moral rationalization.

I don't understand it. I haven't ever done a deep dive on EA, but at first blush it seems like such a benign, banal idea: direct charity money effectively and pragmatically. Sure! How does it end up so weird and broken?

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

#833

Post by chrisseaton »

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?!

How would they be able to stop people making deposits?

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

#834

Post by lazide »

potatototoo99 wrote: post #815
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…

Modern crypto has little to do with bitcoin. Bitcoin was about digital money, out of the reach of central banks as a response to the 2008's financial crisis. Modern crypto is about trying to convince others your altcoin has some intrinsic value by selling rumours, partnerships, governance or some other vaporous dream, so it can be used for gambling. The problem are central exchanges creating monstrous speculation ins…

They all use it as support in their value prop, and try to claim some association, near as I can tell.

But yeah, it’s mostly semi-transparent grifts, and has been for awhile.

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

#835

Post by nemo44x »

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…

Yeah I think it’s why SBF immediately went on about not knowing everything that was going on, that he messed up by misunderstanding things, etc. He’s trying to lay the groundwork for plausible deniability here.

He will either go to prison or kill himself I would bet.

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

#836

Post by ChrisMarshallNY »

bmitc wrote: post #458
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…

My thoughts are that FTX was maybe a legitimate business, but then Alameda was his trading baby that just happened to be run by kids, including himself, that have no idea what they're doing and was losing money left and right. Then using FTX customer funds was viewed as just a "let's move these funds over to get our trading back on track and when we do, we'll move them back". That's my honest guess if I'm being gener…

That sounds like some of the thinking that went into these historic arbitrage disasters.

Some young kid thought he knew better than his elders, and was doing arbitrage, which is moving around vast amounts of money, for very small gains (but safe ones).

They had all this money at their disposal, and just knew that these stuffy old farts were "missing the boat," so they figured that they'd just use a bit, to make a small bet, and put it back...

https://en.wikipedia.org/wiki/Nick_Leeson

https://www.youtube.com/watch?v=NkQ58I53mjk

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

#837

Post by rnk »

shorthistory wrote: post #779
bmitc wrote: post #755

Earlier quoted context omitted.

I made a comment on that video elsewhere. It’s pretty clear they were way out of their league in more ways than one. They’re the type of people that are too smart for their own good where they can’t even see how idiotic they’re being. Or maybe they’re just spoiled. Or maybe they just think they’re smart. It’s interesting to me that Jane Street prides themselves on their hiring process, but they apparently hire folks…

I agree, it reflects VERY poorly on Jane Street. They like to give the impression they hire Ultra Mega Geniuses who have done the IMO (who cares if you did the IMO at age 17...?)

What is the imo? There are many imo things. International mathematical olympiad?

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

#838

Post by mateo411 »

misiti3780 wrote: post #441
mateo411 wrote: post #429

Earlier quoted context omitted.

I don't think this is a dumb question. I was also wondering. They had a 19 year deal 135 million naming rights with the Miami Heat, but I'm fairly certain they didn't pay everything up front. Apparently the county owns the arena, so they will be involved. At least Larry David got paid.

how much did they pay him?

I don't think that's public knowledge.

I assumed he got paid based on my limited understanding on how actors in TV commercials are compensated. It would be weird for Larry David to be in an ad that aired during the Superbowl and not get paid.

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

#839

Post by zeroclip »

sdiacom wrote: post #828
zeroclip wrote: post #811

Earlier quoted context omitted.

These things already exist. Uniswap, Aave. Both pretty easy to use and can not just go insolvent on you.

The only currently existing purpose of those things is to trade scam tokens for other scam tokens, which makes them effectively meta-scams. What I mean is that, like Ethereum, they're not scams in itself, but their only real-world use-case is to provide a decentralised platform on which to run scams.

Lazy and shallow take. But at least those using the “scam” DeFi protocols still have custody of their assets, which is not the case with FTX depositors.

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

#840

Post by vkou »

saurik wrote: post #744
btilly wrote: post #310

Earlier quoted context omitted.

How much further? By their own figures, Tether is now undercapitalized and just had billions withdrawn. They made those payments. But, as Hemmingway said, bankruptcy tends to happen gradually and then all at once. Tether is in a hole. Nobody knows how close they are to not making payments. But when they implode, it will be sudden and the blast radius will be large. Does Tether weather this squall? Based on history, p…

> By their own figures , Tether is now undercapitalized... Where has Tether stated this? Last I heard--today--Tether has continued to claim the opposite. (edit to add, 45 minutes later:) I see patio11 makes the same claim, but I've now read both his recent articles on this and he is making a LOT of extremely stretched assumptions to pull off this reasoning, and even then the best he has is that it must have momentari…

1. Tether has attested, under penalty of perjury in response to orders by a NY court that they aren't backing USDT with dollars, they are backing it with various financial instruments.

2. Tether has claimed, prior to that, that USDT is backed by dollars.

3. Since #1, Tether has not been transparent about their backed assets. Oh, sure, they say that they own X billion dollars of , but we don't know if those are AAA assets, or utter garbage[1], or whether they are counterbalanced by liabilities.

4. So far, the track record for unaudited crypto funds is not great.

On the scale of 'Untrusted', 'Trusted', and 'Completely Trusted'[2], I would definitely put them int he 'Untrusted' category.

[1] The fact that they were even considering buying FTX leads me to believe that they have no aversion to paying good money for garbage.

[2] Promotion to the third category can only happen posthumously.

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