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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

#891

Post by hn_throwaway_99 »

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?

This tweet thread by head of R&D at Coin metrics has a good hypothesis:

https://mobile.twitter.com/LucasNuzzi/status/159012259020682...

In summary:

1. Alameda essentially needed a bailout in the spring.

2. Alameda, though, also had a large chunk of FTT coming due in the fall that was basically part of the vesting schedule of the original FTT ICO.

3. So, FTX lent Alameda customer funds in the spring.

4. In the fall, when the vested FTT paid out to Alameda, they immediately paid it back to FTX.

5. The thing that looks highly suspicious and fraudulent is that SBF tweeted out that the big FTT move that day was just normal "rotation".

Also, particularly interesting to me, the FTX-US president, Brett Harrison, resigned the day before that transaction at the end of September. He also just liked an interview on LinkedIn where Brian Armstrong (Coinbase CEO) was being interviewed, saying "not all crypto companies are like FTX, where it appears they fraudulently misappropriated customer funds".

The above is speculation, but it's based on on-chain data.

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

#892

Post by moralestapia »

triceratops wrote: post #366
bitcharmer wrote: post #293

Earlier quoted context omitted.

I hope you're trolling because this is a very large scale theft. Most of us would agree resignation is not appropriate consequence for such conduct.

I'm not trolling. So far this is just a business failure, not a crime. I don't know much about this whole thing. It sounds likely there will be investigations, and they may prove "large scale theft" at that time. But right now resigning is the only way for him to "take responsibility".

No way, it is a crime,

When everything was going down he tweeted something on the line that everything was fine, he later deleted that but for sure there's an archive somewhere (and I'm sure Elon would be GLAD to provide that data). That's fraud, and I'm sure there's a lot more like that once the DOJ/SEC start looking around.

I like SBF, honestly, I like his personality, I don't believe he's a bad person, I could even believe (with a truckload of salt) that all of this happened without him being fully aware of what was going on. But, real is real, and I'm quite sure he will do jail time.

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

#893

Post by lend000 »

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.

UST wasn't a true stablecoin (it isn't like any dollars disappeared from the ecosystem), so I'd put it in the same category as the hundreds of billions in "vanished" market value that was a simple consequence of the declining value of crypto in general. Whether or not Alameda was holding a bunch of UST or Luna, is another question. SBF seemed to be pretty all in on fringe shitcoins, so I would not be surprised if they had significant exposure.

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

#895

Post by moralestapia »

tptacek wrote: post #146
thiscatis wrote: post #108

Too bad Jonah Hill will be too old once the movie comes out about this whole saga. He would have aced it as SBF.

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.

Oh, I'm sure there's a good story there.

Also, https://news.ycombinator.com/item?id=33547102

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

#896

Post by tomcatfish »

lancewiggs wrote: post #865
sharkweek wrote: post #856

Howdy HN, as some of you may know from previous comments of mine, I’m always on the hunt for swag from dead companies (Lehman Brothers letterhead, Theranos shirts, Clinkle phone case, Enron desk art, et al). The more fraudulent the collapse, the more interested I am. I’d love to get ahead of the ball on this one so if anyone here has any, and I mean any, FTX swag you somehow have picked up over the years, I’m a very…

Perhaps it would be better to say "you might also like to contact /u/filmgirlcw, who is also in the market (and here is how)" You are not in competition - you are both tiny versus the size of the market, and can work together to grow the amount of offers, thus lowering the overall price.

It's a joke

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

#897

Post by hnews_account_1 »

darth_aardvark wrote: post #873
hnews_account_1 wrote: post #654

Earlier quoted context omitted.

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.

> He "calculated the odds he'd fail at 20%".... What calculation? What's the formula that gives you the odds that your Ponzi scheme will be discovered? What can possibly "model" that, aside from a scifi-level reality simulation? It's not even math, it's math LARPing.

Yes, I feel so cheated that all I needed to do to get money for my ideas was to just talk like an ayn rand novel protagonist. At least Zuckerberg did all this but was legitimately a genius. Made sense that bankers put up with that shit cos they could tell he was smart af. But when you’re larping to be a banker like most VCs are, you’ll just copy what they did like a monkey without understanding why they did it. And I wasn’t there to part their money from them. Fml.

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

#898

Post by aeternum »

hn_throwaway_99 wrote: post #57
WFHRenaissance wrote: post #10

Earlier quoted context omitted.

Nexo has zero exposure to FTX according to their CEO.

Nexo just proved that when there is a run on the bank, you want to be first in line: https://cointelegraph.com/news/nexo-dodges-219m-bullet-just-...

It's also quite possible they caused it. Fractional reserve banking by definition means keeping only a percentage of customer deposits readily available.

Regulation also doesn't fully solve this, we still have fully regulated bank failures today: https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_U...

What solves it is the Fed stepping in and agreeing to print money no matter what to cover customer deposits if need be (FDIC insurance). That's hard to replicate in the crypto world but likely possible.

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

#899

Post by zen21 »

blep_ wrote: post #474
Alupis wrote: post #448

Earlier quoted context omitted.

> Coinbase doesn't offer the leverage that offshore exchanges do. FTX was popular originally because they offered 100x leverage Sounds like a red alarm for me. There's probably a good reason domestic exchanges don't let you extend out that far... particularly on extremely volatile securities.

That kind of gets into philosophy of what governments are for: should they protect people who make bad decisions from themselves? Does the answer change if people are actively marketing the bad decision? Does the attempt at doing so suggest they're actively trying to keep poor people from getting rich? (This comment is an explanation of a viewpoint, and not an endorsement.)

In the absence of a government, people would respond to fraud using violence. The government protects embezzlers and fraudsters from the violence of those they have cheated, but in turn creates non-violent consequences for such behaviors.

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

#900

Post by filmgirlcw »

sharkweek wrote: post #856

Howdy HN, as some of you may know from previous comments of mine, I’m always on the hunt for swag from dead companies (Lehman Brothers letterhead, Theranos shirts, Clinkle phone case, Enron desk art, et al). The more fraudulent the collapse, the more interested I am. I’d love to get ahead of the ball on this one so if anyone here has any, and I mean any, FTX swag you somehow have picked up over the years, I’m a very…

Hey now! Absolutely do sell to me, there is definitely enough to go around in this case!

(Sounds like you have a very cool collection, by the way!)

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