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FTX held less than $1B in liquid assets against $9B in liabilities

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Re: FTX held less than $1B in liquid assets against $9B in liabilities

#121
post #116

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

My guess is that either FTX did not furnish them with accurate or truthful information, or the information was correct at the time, but the lack of good governance allowed FTX to pursue some rotten strategies without the knowledge of their investors. It would not be the first time that otherwise smart people have made a bad call.

The timing of the big investments back in Oct '21 for their Series B and Jan '22 for Series C makes your guess seem likely.

Seems like most of the actual fraud started after the 3AC/TerraLuna blowup as SBF trying to trade out of the hole he was in.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#122

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

"It's A BIG Club & You Ain't In It!" - https://youtu.be/Nyvxt1svxso

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#123
post #86

So now we see some numbers. Notes: Bankman-Fried personally seems to own, indirectly, about $472M (paid over $600M, so that was a loss) worth of Robinhood Financial.[1] Other documents provided to investors say that FTX US, Bankman-Fried’s onshore exchange, held $115mn of cash. Of that sum, $48mn was listed as corresponding to customer US dollar balances of $60mn. So there might be enough cash to pay off customer cas…

-- a 30 year old personally has $600MM to invest in a single company? - his startup was founded in 2019 - that was crazy comp structure he had? - he comes from money? - or..? --

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#124
post #43

Earlier quoted context omitted.

FTX US wasn't doing it either. They did it outside of SEC jurisdiction.

Animats disagrees. https://news.ycombinator.com/item?id=33556651 SBF being a US citizen was an angle I hadn’t considered. The US does have jurisdiction over its own citizens, even if they’re operating in other countries. So the question becomes to what extent has SBF defrauded US investors.

There’s plenty of jurisdiction here. Assuming that there’s an indictable offense here, all SBF has to do is connect through the wrong airport one time at some point during the rest of his life, and he’ll find himself back in the US.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#125
This was always a Ponzi scheme, and SBF was incredibly open about it being a Ponzi scheme, and yet people still tried to beat out the Ponzi scheme. Here's SBF back in April (just a small excerpt, the full section is far more damning):

> SBF: So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

> And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

> ...

> Matt Levine: I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.

https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#127

8 months ago I commented "Anyone else oddly skeptical of FTX? They seemingly came out of no where with ungodly amounts of money, and began slapping their name on anything and everything." Glad my BS detector works I guess.

Just one glance at the founder's pics online, makes all my gut alarms go off like crazy. Sometimes, I wonder how people got easily scammed like this by these people but I just chalk to them not being hyper aware of these subconscious clues or worse not acting on their gut reaction when it fires incessantly.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#128

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

>SoftBank

Well, it's not like they have a great track record with risk management.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#129

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

We all asked the same quesrions after Theranos. Silicon Valley VC is a relationship business run by idiots who just follow the leader. They admitted they didn't do much diligence into Theranos, and they obviously didn't do it here either.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#130
post #116

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

My guess is that either FTX did not furnish them with accurate or truthful information, or the information was correct at the time, but the lack of good governance allowed FTX to pursue some rotten strategies without the knowledge of their investors. It would not be the first time that otherwise smart people have made a bad call.

Yeah, we see this time and time again. All those Theranos investors didn't do any diligence because they saw other rich and powerful people throw money at them.

A friend who tried to raise funds from VCs for his start up tech company in SV, tried for multiple years. He was happy to disclose his financials because he had actual customers and revenue. But nobody cared for multiple years. Then one day, well known VC in those circles finally wrote them a check. The moment that happened, all the VCs were throwing money at him. They didn't care about the financials or doing their due diligence, they just did it because some other reputable guy did it. FOMO.

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