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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#51

Post by andreareina »

kypro wrote: post #38
Shank wrote: post #17

The "before this week" column seems to be attempting to draw sympathy by saying "but everything was fine before, seriously!" when in reality it just proved that, even in the best of worlds, they had an extremely optimistic view of the entire crypto ecosystem, including its liquidity. I can't believe they seriously held that much of their total value in their own issued token. That's just preposterous. Imagine if JP M…

> Imagine if JP Morgan Chase's entire value was in JP Morgan Chase stock The value of JP Morgan Case is the total value of their stock, almost by definition. Buy backs are also basically a transfer of a company's cash to company stock and are regularly done by US corporates. The difference here is that they secured debt against their own company assets so that when the value of the company went down, they went into m…

book value. Companies don't get to count the value of stock owned by other people as assets.

Re: FTX balance sheet, revealed

#52

Post by donavanm »

lysecret wrote: post #19

Wait will the forced liquidation crush a large part of crypto ?

Well… your anchors of eth and btc are down about 25% in the last few days. And their reported “assets” are huge chunks of the total market value for a lot of these tiny sketch coins. So yeah, I expect its going to be rough when this get liquidated or it simply turns out your counterparties are actually the sketchy exchanges who dont have anything to back it up.

Re: FTX balance sheet, revealed

#53

Post by mym1990 »

blue_light_man wrote: post #36

The only lesson I learend from this whole debacle is never trust people and organisations you know from the Internet no matter how famous or humble or good they are. Trust the tech. But never the people. Especially for financial advices. Be it Sequoia. Or Yc. PG, Chamath, Mark Cuban ,Balaji or the Collision brothers. Tom Brady or SBF or CZ. Never fucking trust people or organisations. They are all here for their fina…

Why trust the tech if it is built by the same untrustworthy people?

The truth is that for something to be truly spectacular in moving humanity along, you need both tech AND people. You named a bunch of celebrities…OF COURSE you shouldn’t trust those people, you don’t even know them.

Not trusting anyone is just a good way to grow old and bitter about the social state of the world.

Re: FTX balance sheet, revealed

#54

Post by password4321 »

mudrockbestgirl wrote: post #46
jjallen wrote: post #40

The thing that I always wondered about with FTX (and Binance frankly) is how did they get so big so quickly. What did they have that caused so many people to use _their_ exchange. This is still unexplained and was a major red flag. Usually to grow that big takes many years. Just look at Coinbase.

I don't know about FTX, but Binance has been shady from the very beginning. They got large quickly because they listed all kinds of **coins, had negative trading fee promotions, and in general did lots of shady growth hacking marketing tactics and partnerships. If you wanted to gamble altcoins, those would be on Binance, but not listed on Coinbase. That was many years ago when they started out of course. I'm curious…

Still get emails from Binance constantly: "Earn 3.6%/3.9%/4.1% when you stake ... FTM/ONE/ROSE". Just scrolling down, they offered 15% on DOT back in August!

Re: FTX balance sheet, revealed

#55

Post by fallingknife »

celestialcheese wrote: post #6

Incredible. To call all those "Less Liquid" tokens not "Illiquid" is a mastery in self-delusion. $2.1B SRM $981M SOL and then all the shitcoins built on those "technologies" where the tokens are their "shares" in those investments. But to call those tokens valuable assumes there's value in MAPS/OXY etc. But MAPS has a total market cap of $3.9m today - the forced liquidations in these positions will 100% crush these c…

SOL trades $100s of millions per day, which is actually extremely liquid in investment terms. "Less than liquid" is actually quite accurate for lesser known crypto. It's how assets like syndicated debt, that trade much less often, would be described on a balance sheet. "Illiquid" would be more like equity in a private company, where there is no active secondary market at all.

Re: FTX balance sheet, revealed

#56

Post by mym1990 »

mudrockbestgirl wrote: post #34

Okay, but... how? How did they manage to lose so much money by running a popular exchange that should bring in tons of fees? Even if they were gambling with part of the deposits, how can they lose 90% of all assets? You'd have to be actively trying to lose money to be this bad... Also, where does Alameda fit into the picture?

They were probably leveraging heavily in some sectors, on top of siphoning those incoming fees to line pockets. Once you leverage, it is extremely easy to lose everything in a span…but also easy to gain!

Re: FTX balance sheet, revealed

#57

Post by grey-area »

Marazan wrote: post #45
clarkeni wrote: post #28

Earlier quoted context omitted.

It’s 2.2 billion dollars - but it’s using fully diluted value rather than circulating supply market cap.

Yeah, you are right. That is still bonkers crazy nuts.

Even more bonkers is who minted all of those coins? Was it FTX?

Re: FTX balance sheet, revealed

#58

Post by lordnacho »

mudrockbestgirl wrote: post #34

Okay, but... how? How did they manage to lose so much money by running a popular exchange that should bring in tons of fees? Even if they were gambling with part of the deposits, how can they lose 90% of all assets? You'd have to be actively trying to lose money to be this bad... Also, where does Alameda fit into the picture?

Seems like Alameda was critical to the how of it.

What's not clear to me is what they gambled on that lost money.

Business model ought to be simple, the exchange earns loads of fees, and Alameda makes markets on it, earning spreads.

Just putting a lid on the risk there should be enough to keep people occupied, no need to print your own money for extra leverage.

Re: FTX balance sheet, revealed

#59

Post by grey-area »

celestialcheese wrote: post #6

Incredible. To call all those "Less Liquid" tokens not "Illiquid" is a mastery in self-delusion. $2.1B SRM $981M SOL and then all the shitcoins built on those "technologies" where the tokens are their "shares" in those investments. But to call those tokens valuable assumes there's value in MAPS/OXY etc. But MAPS has a total market cap of $3.9m today - the forced liquidations in these positions will 100% crush these c…

The story is the same for all these other giants of crypto.

Binance, Tether, Bitfinex are all basing their purported asset value on holdings of multiple worthless currencies, many of which they mint and price themselves.

Re: FTX balance sheet, revealed

#60

Post by lend000 »

jjallen wrote: post #40

The thing that I always wondered about with FTX (and Binance frankly) is how did they get so big so quickly. What did they have that caused so many people to use _their_ exchange. This is still unexplained and was a major red flag. Usually to grow that big takes many years. Just look at Coinbase.

Binance was publishing fake volume numbers (basically a sine wave chart) up until ~2018. They faked it until they made it.

The only reputable exchanges are KYC/western based Coinbase, Kraken, Gemini, and perhaps some of the smaller US based companies.

Honorable mention to Bitmex, which was truly financially innovative (basically what FTX and other crypto futures exchanges tried to copy) and admitted exactly what it was (a place to trade with irresponsible leverage). Their only mistake was not trying that hard to prevent US nationals from yoloing on their site.

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