Likely insiders withdrawing funds
FTX faces potential hack, sees mysterious outflows totaling more than $600M
621–630 of 890 posts
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#622Earlier quoted context omitted.
The events of the bank closing may be deflationary. The giving of now-gone money to the depositors is inflationary. The fallacy of your above statement is you're considering the system of 'fail, then FDIC pays out depositors' when in fact the alternative is 'fail, depositors eat losses'. The former is inflationary relative to the latter, and in fact punitive to those who chose banks that didn't fail. The net differen…
No, it doesn't increase the money supply because the FDIC has a pre-existing fund for it. They're not funded by the Treasury and when they are they pay it back. Though the US could've used more inflation at any point up to 2021 considering our inability to ever get unemployment low enough. (since they're theoretically more or less directly related)
Pre-existing Funds that are just sitting waiting around to be put into depositor accounts once a bank fails have low to no velocity. Giving them to money-spending depositors is inflationary by virtue of increasing the velocity of that money that was previously just sitting on the sideline. Even in the scenario you present is inflationary.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#623Earlier quoted context omitted.
Get out, man. Learn investment theory. All you need is a couple of index funds and bonds. Investing isn't supposed to be exciting or make you rich quick.
> All you need is a couple of index funds and bonds. Ah, spoken like a true middle class Boglehead. VTI/VOO will not change your life, even after 30 years. Broad market ETFs are not worth the risk. You’re better off doing bonds (little to no risk) or crypto (high risk, more likely for life-changing generational wealth compared, even compared to FAANG SWE TC).
> life-changing generational wealth
By that measure, the people who had their life savings in FTX (and Celsius and Luna before that) have certainly succeeded.
Investing in total-market index funds is the single best strategy for the average investor. (In fact it's so good there's a proof! [1]) If you invested $10000 in the total US market in 1992 (30 years ago) and never touched it again, your inflation-adjusted balance today would be $72452 [2]. That's an insane 7x of real growth that requires absolutely no effort on your part. Even if you did a more conservative mix of 60% stock and 40% bond (VBMFX) you would have 4.5x real growth.
[1] https://web.stanford.edu/~wfsharpe/art/active/active.htm
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#624The hacker has spent the last 11 hours slowky and incrementally converting all the various tokens they got to ETH. They've been using a variety of different defi exchange and have eaten large slippage fees, at least once over 5M lost in slippage. We're not seeing any else, e.g. laundering through another exchange, splitting into different accounts, automating the liquidation of tokens to ETH, off loading ETH into a c…
Corporate theft is not a hacking.
When you say "corporate theft" are you referring to theft from corporations or theft by corporations? I'm not sure it's clear which is relevant here.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#625The hacker has spent the last 11 hours slowky and incrementally converting all the various tokens they got to ETH. They've been using a variety of different defi exchange and have eaten large slippage fees, at least once over 5M lost in slippage. We're not seeing any else, e.g. laundering through another exchange, splitting into different accounts, automating the liquidation of tokens to ETH, off loading ETH into a c…
What are the chances that this is an insider and not an outsider? I ask because the timing of this "hack" is obviously a little suspicious.
the fact that it has been executed so poorly to me seems like it is an insider who woke up and thought they could get away with it because they hd access to the keys
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#626Earlier quoted context omitted.
I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right?
> I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right? That wouldn't be obvious at all to me; the lowest-risk investment in my country (federal government bonds) is currently offering over 13% interest ( https://www.tesourodireto.com.br/titulos/precos-e-taxas.htm ).
The classic ‘risk free’ asset is US Treasurys, the US has never defaulted on its debt. Any yield above the risk free rate has implied risk, Brazilian bonds yield 13% because Brazil has defaulted on its debt several times. Brazilian bonds are at least an order of magnitude riskier than US Treasurys, and probably more than that.
FTX was paying well above the risk free rate (currently 3.25-3.5%, it’s been climbing since January 2022), implying they were taking risk to earn the yield they were paying.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#627Earlier quoted context omitted.
Perhaps for the use case of the underbanked, which is the majority of the world. That I need to wait for confirmation on the blockchain for a crypto payment is orders of magnitude faster than my other option, which is wait for someone to manually bring in foreign currencies by train. My country is not on SWIFT. My passport will not allow me to get a bank account in any country that would let me process credit cards.…
I'm from India, one of the most populous countries in the world. And we have instant online transfers with no transaction fee and it's called UPI.
Is everyone in India banked? How do you transfer money outside of the India? Can you do that insta fly with UPI as well?
There are more countries than India, I’d suggest maybe taking a look at South America, Africa and Asia.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#628Earlier quoted context omitted.
I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right?
Not always, I bonds were offering more earlier this year
I bonds are subsidized by the US Treasury (this is why there’s a purchase limit), which has never defaulted on its debt.
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#629Earlier quoted context omitted.
Retail investors are creditors right? Though I guess you mean only the larger creditors. I think the bigger difference is that bankruptcy proceedings take a long time and to a retail investor ‘you might get some money back in N years’ isn’t so different from ‘you get nothing’.
I just had that realization that I'm sure so many have already had.. In a bankruptcy, we really are creditors.. but we're not Creditors, and won't get our money back until big C's have had all they want.
In my country the first creditor that gets their money in case of a bankruptcy is the tax man.
And a lot of bankrupt companies owe the government a lot of money in due taxes...
Re: FTX faces potential hack, sees mysterious outflows totaling more than $600M
#630Earlier quoted context omitted.
Get out, man. Learn investment theory. All you need is a couple of index funds and bonds. Investing isn't supposed to be exciting or make you rich quick.
> All you need is a couple of index funds and bonds. Ah, spoken like a true middle class Boglehead. VTI/VOO will not change your life, even after 30 years. Broad market ETFs are not worth the risk. You’re better off doing bonds (little to no risk) or crypto (high risk, more likely for life-changing generational wealth compared, even compared to FAANG SWE TC).
Crypto is life-changing in the sense that you will probably lose all your money as (1) a complete speculation or (2) in a hack or (3) due to fraud.