FTX balance sheet, revealed • Hacker News Board

Re: FTX balance sheet, revealed

#91

Post by paganel » Sun, Nov 13, 2022, 9:27 AM UTC

astrange wrote: post #42

TotoHorner wrote: post #3

So... is this guy just a complete sociopath or something? Telling everyone what regulations should be (and buying politicans) to ensure consumer protection while simultaneously sifting away 90% of consumer funds ? How does a person lie that much?

He just wants to impress his girlfriend, who seems to have turned herself into a monster by doing enough amphetamines to replace the contents of her brain with Slate Star Codex. https://twitter.com/0xhonky/status/1591630071915483136 https://twitter.com/autismcapital/status/1591601671943393280 (From the first tweet, it doesn’t seem like anyone in the conversation has read https://en.wikipedia.org/wiki/Martingale_(prob…

Hopefully out of all this debacle that rationalist community will be brought down a peg or two (including kumbaya pie in the sky stuff like Effective Altruism).

It was all funny when these people were portrayed in TV shows, not so funny when that mindset is behind billions of dollars of people's money getting defrauded.

Re: FTX balance sheet, revealed

#92

Post by bjornsing » Sun, Nov 13, 2022, 9:27 AM UTC

pakitan wrote: post #75

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…

He's also being purposefully obtuse about his 2 largest regrets - the "poorly labeled" account and underestimating the size of the withdrawals. He's still behaving as if having billions of liabilities in real money backed by funny money "assets" is somehow acceptable and everything would have been fine if it wasn't for the "last week".

But maybe it could have been?

I’m a complete crypto skeptic who would never touch anything like FTT, but it’s not an obvious Ponzi scheme. I think one of the troubles with crypto is that it’s very easy to operate what is effective a Ponzi scheme, without fully realizing it yourself.

Re: FTX balance sheet, revealed

#93

Post by [deleted] » Sun, Nov 13, 2022, 9:28 AM UTC

andreareina wrote: post #51

kypro wrote: post #38

Earlier quoted context omitted.

> 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.

[deleted]

Re: FTX balance sheet, revealed

#94

Post by libraryatnight » Sun, Nov 13, 2022, 9:29 AM UTC

pigtailgirl wrote: post #33

"What are President tokens? President tokens are ERC-20 tokens that will be redeemable for either $1 or $0 based on if Trump wins or loses the Presidential election. These markets act as tradeable prediction markets where the market price of TRUMPWIN should be roughly equal to the probability that Trump will win the election and the market price of TRUMPLOSE should be roughly equal to 1 minus that probability. TRUMPW…

Someone just mint the Camacho coins already

Re: FTX balance sheet, revealed

#95

Post by bjornsing » Sun, Nov 13, 2022, 9:31 AM UTC

wolpoli wrote: post #47

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, and they just reported that as their value in cash. It's like recursive valuation. While I think real world finance is on much more stable ground than crypto, I thought it'll be funny to point out that many of the world's central banks back their liabilities (the currency they issue) with own government's bonds. Luckily, the bonds are denominat…

If my understanding is correct the Swedish central bank, Riksbanken (which happens to be the oldest in the world), has said that whey do not want to hold their QE assets to maturity and that they are essentially bankrupt. They will be bailed out by the tax payers of course.

Re: FTX balance sheet, revealed

#96

Post by dgudkov » Sun, Nov 13, 2022, 9:31 AM UTC

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…

That sounds techno-utopian to me. You can't get around trust to people. Technology is run by people using rules and abstractions people agreed to adhere to.

Re: FTX balance sheet, revealed

#97

Post by lottin » Sun, Nov 13, 2022, 9:32 AM UTC

wolpoli wrote: post #47

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, and they just reported that as their value in cash. It's like recursive valuation. While I think real world finance is on much more stable ground than crypto, I thought it'll be funny to point out that many of the world's central banks back their liabilities (the currency they issue) with own government's bonds. Luckily, the bonds are denominat…

This is incorrect. Currency issued by a central bank is not a real liability, since its issuance does not entail a future payment obligation. It's a liability only for accounting purposes. The government bonds on a central bank's balance sheet are used to conduct (or the result of) open market operations. They aren't "backing" anything.

Re: FTX balance sheet, revealed

#98

Post by usrusr » Sun, Nov 13, 2022, 9:34 AM UTC

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…

An interesting observation: first people get used to trusting e.g. Coinbase, in the slow, organic way of trust to grow, then they see a similar company, the brain does that category drawer game and suddenly the new company gets trust by similarity. Certainly not the full amount but a much better start than the first one had. I wonder if there's already a term for that? What's even the field where these observations would be collected?

Re: FTX balance sheet, revealed

#99

Post by lottin » Sun, Nov 13, 2022, 9:37 AM UTC

bjornsing wrote: post #95

wolpoli wrote: post #47

Earlier quoted context omitted.

> Imagine if JP Morgan Chase's entire value was in JP Morgan Chase stock, and they just reported that as their value in cash. It's like recursive valuation. While I think real world finance is on much more stable ground than crypto, I thought it'll be funny to point out that many of the world's central banks back their liabilities (the currency they issue) with own government's bonds. Luckily, the bonds are denominat…

If my understanding is correct the Swedish central bank, Riksbanken (which happens to be the oldest in the world), has said that whey do not want to hold their QE assets to maturity and that they are essentially bankrupt. They will be bailed out by the tax payers of course.

You're probably understanding it wrong. Central banks have little or no debt, and they can "print" reserves at no cost. Reserves is the stuff they pay their debts off with. As a result it's virtually impossible for a central bank to go bankrupt.

Re: FTX balance sheet, revealed

#100

Post by bboygravity » Sun, Nov 13, 2022, 9:37 AM UTC

grey-area wrote: post #59

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.

Interesting to see that you and many others think that "the real financial world" works significantly differently.

Countries, (central) banks, family funds and hedge funds are about to fail (or are already failing) in a very similar way but on a much much grander scale.