Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

FTX balance sheet, revealed

ft.com

Post reply on HN
Print view View original

141–150 of 309 posts

Re: FTX balance sheet, revealed

#141

Post by [deleted] »

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…

[deleted]

Re: FTX balance sheet, revealed

#142

Post by vkou »

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…

Unlike FTX, central banks have the power to create money out of thin air, while the governments that operate them have the power to create demand for money out of thin air, through taxation.

Governments thus, control both the demand for, and the supply of money.

Re: FTX balance sheet, revealed

#143

Post by vkou »

laserlight wrote: post #73
throwaway290 wrote: post #64

Earlier quoted context omitted.

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.

How do you tell that people are trustworthy in the first place?

Make sure they have skin in the game[1], make sure they know they have skin in the game, and trust them with big things only if they have a good track record with smaller ones.

[1] In the case of dealing with money, 'go to prison if they steal it' does a pretty good job of filtering out the most common hucksters.

Re: FTX balance sheet, revealed

#144

Post by tasubotadas »

I am quite surprised that nobody is talking about VCs (Sequoia) that happily poured money into this.

What was their plan? Were they blind? Were they hoping to cash out before it crashed?

Major investors usually get full visibility into the company.

Re: FTX balance sheet, revealed

#145

Post by blue_light_man »

shapefrog wrote: post #126
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…

All these people are saying "not your keys not your coins". Should we not do that because, with one voice they are all saying that you should do that?

That is a statement one can easily verify through tech and from first principles. For example you can go through the wallet source code and verify the algorithms used.

Trust me we have the funds backed 1 to 1 in our exchange is not unless proven cryptographically.

Re: FTX balance sheet, revealed

#146

Post by CPLX »

fallingknife wrote: post #55
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.

Who are the people “trading” it all day? Unless you feel pretty confident you have a window into what exactly is going on there then I wouldn’t make much of a bet on liquidity.

Wash trading and market manipulation is basically the defining feature of all these markets.

Re: FTX balance sheet, revealed

#147

Post by vkou »

fallingknife wrote: post #62
pavlov wrote: post #31

Earlier quoted context omitted.

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.

Which exact Wall St. firms took all their customer's deposits and bet them all on the Kentucky Horse Derby, while filling their balance sheets with their own equity, and self-printed scrip?

There's a lot that went wrong in 2008, but none of it looked anything like this.

Re: FTX balance sheet, revealed

#149

Post by CPLX »

lordnacho wrote: post #71
pavlov wrote: post #31

Earlier quoted context omitted.

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…

I worked for a fund that lost a lot of money once. It was all legit, nothing shady, just dumb investments gone wrong. We phoned one of these well known investors to tell them what had happened. By that of course I mean the person in charge of the little piece of the massive fund that was allocated to us. On the call the guy goes "when I tell my boss in 5 minutes, I'm going to get fired for investing in you". He wasn'…

It’s because the Sequoia investors and funds and VCs were applying a pattern that actually sort of works for software onto a financial services company.

If you’re building consumer facing software like a social network or app, and you have massive wild growth, you have a money printing machine in progress.

It’s pretty straightforward to get there with a seed of blind luck and some sweaty immature skilled tech guys from top schools who have literally no fucking idea how to actually run a company.

Everyone has seen that before. It works out. You invest the money they use it to hire people who know how to run a business and you win. You have no internal controls or systems for awhile and some accounts get nuked and there’s a breach or two and it doesn’t matter it’s a photo sharing website.

Then you apply that logic to healthcare or financial services and they make a Netflix mini series about just how much of a fucking moron yoi were for not understanding those are fundamentally different business models.

Re: FTX balance sheet, revealed

#150

Post by mayankkaizen »

tasubotadas wrote: post #144

I am quite surprised that nobody is talking about VCs (Sequoia) that happily poured money into this. What was their plan? Were they blind? Were they hoping to cash out before it crashed? Major investors usually get full visibility into the company.

This is the most important thing I was wondering about. If crypto businesses are shady and Ponzi schemes and these crypto guys are working mostly behind the scene, why would a VC like Sequoia invest in such firms?

I somehow feel firms like Sequoia gave these crypto stuff some credibility and positive exposure. It was like, "don't worry, their business is legit and booming.'

Post reply on HN