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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

#841

Post by gentryb »

nemo44x wrote: post #835
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…

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.

Betting someone will kill themselves or go to prison is far from constructive, and is triggering to many. Go to prison is one thing. Suicide is another. It's not a joke.

EDIT: Suicide is something that's hit personally lately - my response was likely something based on that. To the person who responded - I didn't think you considered suicide a joke - and plenty do consider it. It's never a solution though. You even got an upvote.

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

#842

Post by grey-area »

Auracle wrote: post #608
sz4kerto wrote: post #309

Earlier quoted context omitted.

Even Coinbase?

I feel perfectly fine having my crypto stored on Coinbase’s end. As far as I know their business model makes perfect sense and they don’t take the weirdly big risks all of these falling dominoes have. Also, if Coinbase goes bankrupt and takes everyone’s crypto with them I feel everything will crash to essentially 0.

Cryptocurrencies are not everything.

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

#844

Post by nemo44x »

gentryb wrote: post #841
nemo44x wrote: post #835

Earlier quoted context omitted.

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.

Betting someone will kill themselves or go to prison is far from constructive, and is triggering to many. Go to prison is one thing. Suicide is another. It's not a joke. EDIT: Suicide is something that's hit personally lately - my response was likely something based on that. To the person who responded - I didn't think you considered suicide a joke - and plenty do consider it. It's never a solution though. You even g…

I’m not joking. And I agree it’s a serious matter. But staring down at 40+ years, a significant number of people would kill themselves in his position.

“I’d bet” is a figure of speech. Not the stated desire to gamble.

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

#845

Post by World177 »

ryanSrich wrote: post #831
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.

Y Combinator also backed a failed company [1] that was trying to take advantage of the high APR (20%) for UST staking. [2] I don't think there has been confirmation yet about how much UST Alameda was holding, but if true, it would add more context to CZ's tweet "liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce." [3]

[1] https://news.ycombinator.com/item?id=31686140

[2] https://www.bloomberg.com/news/articles/2022-03-23/terra-s-p...

[3] https://twitter.com/cz_binance/status/1589374530413215744

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

#846

Post by jmyeet »

krupan wrote: post #734
pjc50 wrote: post #319

Earlier quoted context omitted.

> loaning your money to banks/corporations/governments/individuals is super risky This is called a "low trust society". The flip side is of course that nobody will lend you money. Mortgages and consumer credit are scarce. Business credit is difficult. Large amounts of capital need to be tied up in buffers. The overhead of keeping an eye on everyone is considerable. You don't get "First World" levels of development wi…

I actually really like the idea of not needing to rely on trust so much. Needing to rely on trust is a big problem that Bitcoin solves. There's no single Bitcoin Chair than can tweak the policy or supply of Bitcoin that you have to trust. No congress or president that can change the rules of the Bitcoin game that you have to trust. Bitcoin is impossible to forge, no trust that someone is handing you real money needed…

Literally none of this is true:

> Needing to rely on trust is a big problem that Bitcoin solves.

No, it doesn't. As soon as anything is external to the Bitcoin network, you now require trust. This is so well-known it has a name: the oracle problem [1]. Crypto Andys, of course, just double-down and say we need more crypto. Just like libertarians who when confronted with the problems of lack of regulation they will argue the solution is even less regulation.

> There's no single Bitcoin Chair than can tweak the policy or supply of Bitcoin that you have to trust.

Instead there's unaccountable miners who with 51% of the hash power can completely rewrite the rules with no recourse. Bitcoin has already forked multiple times [2].

> There are no charge backs

Chargebacks are a feature not a bug.

> no middle men that you you have to trust to not steal your money in transit

FTX customers may disagree.

[1]: https://blog.chain.link/what-is-the-blockchain-oracle-proble...

[2]: https://www.cnbctv18.com/cryptocurrency/a-list-of-bitcoin-fo...

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

#847

Post by walrus01 »

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…

> Chapter 11 can be useful for restarting companies that actually do something, like General Motors. There, much of the value is in the ongoing business. FTX, going forward, has no ongoing business.

I was looking for a diplomatic way to write "and nothing of value was lost...", but you nailed it.

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

#848

Post by grey-area »

djinnandtonic wrote: post #431
Alupis wrote: post #422

Earlier quoted context omitted.

For someone that only dabbles in crypto - what are the reasons people choose to use high-risk exchanges like FTX, and buy even higher risk "sh*t coins" on them? Especially the exchange-created-and-owned coins - of which I have yet to see one actually do what it promised. Is Coinbase just not cool anymore, or is there some advantage to using exchanges like FTX until they go belly-up?

For someone that only dabbles in investing, what are the reasons people choose ultra-high-risk investments like crypto?

“they abolished the fundamental distinctions between investment and speculation… they ignored the price of a stock in determining whether or not it was a desirable purchase.”

Benjamin Graham & David L. Dodd, Security Analysis, 1934

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

#850

Post by manmal »

SantalBlush wrote: post #747
coffeebeqn wrote: post #670

Earlier quoted context omitted.

Let’s not treat senior management and owners of a company that has gambled away billions of dollars of customers (and investors) money as kids. They should get jail time from what I’ve read so far. They were either criminally stupid or did this on purpose. It really wasn’t that complex. This isn’t even close to 2008 complexity since this was all happening within one organization With the same owner SBF.

"Never attribute to incompetence that which can be adequately explained by greed."

Greed can be a form of incompetence - the inability to set goals that are reachable without recklessness or imprudence.
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