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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#61

Post by blue_light_man »

mym1990 wrote: post #53
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.

I should have clarified. By don't trust people I mostly meant people you know from Internet and have never had a meaningful relationships with.

Re: FTX balance sheet, revealed

#62

Post by fallingknife »

pavlov wrote: post #31
rippercushions wrote: post #9

What the fresh hell? This isn't even an actual accounting balance sheet. He was trying to convince investors to put billions of dollars of actual money into FTX, and the best he could do is the sketchiest one-page Excel ever, complete with comments like "Hidden, poorly internally labled fiat@ account" (sic) worth 8 billion and warnings about typos ! No wonder CZ got cold feet.

Somehow this same level of sloppiness, disorganization and disrespect was a mark of a great disruptive innovator just two months ago. In the Sequoia profile they greatly admire how Bankman-Fried plays League of Legends while pitching to investors, and takes naps in his office when he’s supposed to be in meetings. How surprised can they realistically act that their genius lost 8 billion dollars in a “hidden, poorly in…

Remember how the immaculately organized and professional appearing Wall St. firms did the exact same shit back in 2008? The only difference is really that they had the political clout to get a government bailout.

Re: FTX balance sheet, revealed

#63

Post by lordnacho »

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.

My guess is they managed to get market makers in there due to connections. This creates liquidity which is a virtuous cycle. They also had early attention from being a top trader on bitmex iirc.

Fair bit of luck needed as well since there's hundreds of exchanges launched at around that time.

There's no explanation that doesn't require luck, but there's also no explanation that doesn't require having the prerequisites of liquidity and marketing.

Re: FTX balance sheet, revealed

#64

Post by throwaway290 »

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…

Funny how my takeaway (as someone completely removed from the action) has been the opposite: don't trust the tech, filter for trustworthy people. Time and time again we are shown that tech is not solving the human problem of greed and malice, and some kinds of tech rather amplify it.

Re: FTX balance sheet, revealed

#65

Post by nieve »

laichzeit0 wrote: post #32
rippercushions wrote: post #9

What the fresh hell? This isn't even an actual accounting balance sheet. He was trying to convince investors to put billions of dollars of actual money into FTX, and the best he could do is the sketchiest one-page Excel ever, complete with comments like "Hidden, poorly internally labled fiat@ account" (sic) worth 8 billion and warnings about typos ! No wonder CZ got cold feet.

Hey man, move fast and break things. Professional accounting practices are nothing but “gatekeeping”. Hack the fucking plaaaanet.

The protagonists of Hackers were way more competent than this crew.

Re: FTX balance sheet, revealed

#66

Post by rwoerz »

zarzavat wrote: post #11
missedthecue wrote: post #4

Earlier quoted context omitted.

Well it seemed to have worked. The scam kept going until the math stopped working, it wasn't regulators or investigative journalists that brought it down. Advising congress and buying formula 1 ads and sponsoring stadium names gave his scheme a certain unearned legitimacy.

The media is also culpable, because his face was always on it. I never used FTX, but I assumed that it was legit and regulated based upon his appearances on Bloomberg etc. This seems to have been a case of XKCD 978, i.e. lazy journalists. https://xkcd.com/978/

Citogenesis is actually a Germanism stemming from "Zitogenese". [1]

[1] https://news.ycombinator.com/item?id=33581269

Re: FTX balance sheet, revealed

#67

Post by grey-area »

lordnacho wrote: post #58
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.

SBF is a con artist. There is no point looking for a legitimate business because there wasn’t one.

Re: FTX balance sheet, revealed

#68

Post by trophycase »

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…

SRM market cap isn't even 2.1B. There's more to this story as usual. The corruption runs deep.

Re: FTX balance sheet, revealed

#69

Post by stephen_g »

collaborative wrote: post #5

Was he managing funds with a 10% fractional banking policy?

Bank deposits, of course, are >100% backed (by a mix of assets), the 10% reserve ratio is just specifying a minimum amount of one kind of asset (central bank reserves). Most countries don’t have the same kind of explicit reserve requirement and most have plenty stable banking systems.

Re: FTX balance sheet, revealed

#70

Post by emilsedgh »

lordnacho wrote: post #58
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.

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

My guess would be other crypto ventures. All these crypto companies pumped each other with no products/assets (Stadium names and soccer team sponsorships with no products to sell!) and invested in each other. The economy had so much excess money and they got pumped and they thought this is what "investing" is. Economy's bubble burst and suddenly their valuations goes to 0.

When economy goes bad everyone is hurt but these companies had nothing but vaporware and are vaporizing as a result.

Just a guess though.

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