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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#161

Post by greiskul »

igorkraw wrote: post #88
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…

I wrote a whole post because I misread your first line as "while some people think" and set out to "tell people on the internet they are wrong", but since we seem to actually agree with another, I'll post the below as an agreeing addendum to make the point just how much more stable real economics and finance are than crypto BS. And also because I wrote it already. --- This is not "luckily", it's by design, and there'…

Exactly. People that say that the value of fiat money is fake, never think about taxes. You want to own a house? The government mandates that you acquire and give them a certain amount of US dollars. Even if you did every single transaction in your life with other assets, paying for stuff with gold and chickens, at the end of the day, the tax man will come for you, and the tax man only takes dollars.

Re: FTX balance sheet, revealed

#162

Post by mdale »

rkagerer wrote: post #72
mudrockbestgirl wrote: post #46

Earlier quoted context omitted.

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…

I guess it goes to show even in the face of all the scams there remains a massive appetite for [seemingly] legit markets to buy/sell coins. Boggles my mind these idiots can't simply be satisfied to run a profitable, lawful operation.

I think the issue was they were creating the market for these *coins.

The reason people wanted to gamble in these alt coins is the wild returns. These returns would not have been possible if these business had operated as a lawful like gambling operation.

Re: FTX balance sheet, revealed

#163

Post by MarkPNeyer »

ShamelessC wrote: post #131
bjornsing wrote: post #92

Earlier quoted context omitted.

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.

Eh, it is _obviously_ a ponzi scheme after doing a bit of research. In this podcast he all but says it out loud. https://jaxandmartinshow.com/sam-bankman-fried-transcript/

This quote is very interesting because he seems to try and argue for its legitimacy at the end. “Is that even wrong,” he asks. You get the impression that he believes in something like a postmodern theory of value that says, you need nothing fundamental for a thing to have value. Mass appeal is sufficient. So he looks at dogecoin and thinks, like many of us: this serves no purpose and makes no sense. He simply concludes its nonzero price is evidence against prices being real, rather than a prediction of dogecoin’s future value.

Re: FTX balance sheet, revealed

#164

Post by ilrwbwrkhv »

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…

If there comes a day pg makes his twitter handle pg.eth or whatever nonsense a bunch of these guys were doing, I would lose all respect for him. But without that what PG and YC have provided is incredible value. Real world tangible value. Do you remember what snakes VCs used to be before YC came to the scene? Now my only fear is that Garry Tan on the other hand is indeed deep inside these scams whether knowingly or unknowingly. I hope better heads around him keep him and YC safe.

Re: FTX balance sheet, revealed

#165

Post by ealexhudson »

recuter wrote: post #136
recuter wrote: post #110

Earlier quoted context omitted.

Sounds like plain old moral hazard to me: https://en.wikipedia.org/wiki/Moral_hazard Why people think that such things are limited to any one political party or that progressive liberals are somehow immune from it is beyond me. Used to be a time, about a decade ago, where these very same folks would lose their collective minds when Mitt Romney said stuff like "corporations are people my friend" and "money is speech".…

I don't know which discord the reply to me is supposed to be linking to but here it is in text form. A true scandal is opening for the Biden administration. April 25, 2019: Biden announces his presidential campaign. 13 days later, Sam Bankman-Fried, son of Barbara Fried ( Stanford Professor and co-founder of political fundraising organization "Mind-the-Gap), launches #FTX crypto exchange. The exchange is magically an…

But I thought the whole complaint about SBF was the enormous lengths he was going to in order to increase regulation, and effectively pull up the drawbridge behind him?

I think the whole point about campaign financing is well made, but the idea (implied) that this was some massive Dem ruse feels incredibly far-fetched, given the various investors and others involved. If you scratch at the senior leadership of many companies you're going to find political people of all colours, because lots of people get involved in politics.

Re: FTX balance sheet, revealed

#166

Post by d3vmax »

Remember at the peak how many pro-crypto HN commenters would give all kinds of tech/politics/economic pros of crypto. It was all a sham. Anyone who knows tech and seen the progress from the 90s could smell the shit that is crypto. Unnecessarily difficult than it had to be, to obfuscate the fact it was bullocks through and through.

Re: FTX balance sheet, revealed

#167

Post by cormacrelf »

lottin wrote: post #156
loftil wrote: post #140

Earlier quoted context omitted.

No, your understanding isn't quite correct. Many western central banks hold long dated bonds on their balance sheet which they are marking down due to increasing interest rates. Different central banks are dealing with this differently. In the US they are writing IOU s that essentially mean future surpluses will be used to pay back negative equity. The UK Treasury recently wired the BoE a large sum for much the same…

You're repeating the same nonsense. How can a bond that the central bank got for free make the central bank lose money? Please explain.

Central banks care a lot about money supply. They do not want to have to print money to account for a debt on the balance sheet, because that (eventually) devalues the currency they operate, and causes deflation which they regard as bad for the economy. They wish to use the money printer when they choose (and provide maximum effect for its valid use cases), not because they are forced. There is a money printing capacity they do not wish to exhaust. If you printed money to buy a car, but it was only because you had to make a big trip and you had actually been intending to wait for the new model, then that’s a suboptimal use of your money printer.

So basically the money printer is not free. There is an opportunity loss that they’ve found a way to measure as a real loss to make it easier.

Re: FTX balance sheet, revealed

#168

Post by ealexhudson »

macrolime wrote: post #121

I haven't verified this for veracity, but supposedly a screenshot from tumblr blog of the CEO of Alameda Research "this blog endorses double-or-nothing coin flips and high leverage" https://pbs.twimg.com/media/FhaKXhRXwAEfvKD?format=jpg&name=...

I believe it is true, and there was a good thread on twitter about Kelly optimal bets. It seems clear that SBF, and maybe therefore Alameda, didn't really understand the right hand side of the Kelly optimum.

Re: FTX balance sheet, revealed

#169

Post by ekpyrotic »

Even these accounts are deceiving.

The current holdings are valued at today / yesterday's spot rate.

Given that many of these holdings are in (comparatively) thinly traded alt-coins, as soon as you try to dispose of these levels of coins / tokens, the price will fall as supply overwhelms demand.

Of course, this is represented by the fact that many of the alt-coins are marked as relatively illiquid -- and SBF has put a lackadaisical disclaimer at the top about the shifting price.

But the reality is that regardless of how long you wait -- or how much you try to spread the disposals -- you will only ever get a percentage of the current spot rate, given the impact that the sales will always have on the price itself.

I can't shake the feeling that SBF might say... "Yes, but once we have reassured the market, etc, etc, these alt-coins might recover in value -- and then we can dispose at this level."

And, of course, the merry-go-round starts again.

Re: FTX balance sheet, revealed

#170

Post by ratg13 »

habosa wrote: post #132
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.

Back in 2017 when there was an new coin spiking every day Binance was by far the easiest place to sign up and trade. Everywhere else had either much stricter KYC or a much worse reputation. It’s likely Binance was so much easier because they were ignoring KYC laws, but I’m not a lawyer.

I think this is it.

Low bar of entry, largest marketplace, and a decent API

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