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

281–290 of 309 posts

Re: FTX balance sheet, revealed

#281

Post by lupire »

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.

Is Binance really in that group?

CZ alleged that FTX tried to crash Binance's market a few years ago like Binance did you FTX last week, but failed because they actually hold reserves.

Re: FTX balance sheet, revealed

#282

Post by lupire »

seanhunter wrote: post #209
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?

Well firstly they were offering perps[1] which are a margined product. If you want to trade with margin on a regular exchange (like say you want to trade commod futures on CBOE or ICE or whatever) you contact a broker/dealer and put up collateral[2] to get margin. FTX was seemingly both acting as an exchange and as a broker/dealer so they were providing the margin and standing risk on the other side of certain trades…

> perp

It's incredible that 1) crypto "finance" is full of products whose name screams scam, and 3) a perp(etuity) is like a fixed-term annuity except it's supposed to lay out forever, but no crypto perpetuity has been existence (and most have already failed) for longer than any annuity term.

Re: FTX balance sheet, revealed

#283

Post by lupire »

hiq wrote: post #160
mayankkaizen wrote: post #150

Earlier quoted context omitted.

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.'

> why would a VC like Sequoia invest in such firms? I thought the rationale was already widely known by now: https://en.wikipedia.org/wiki/Greater_fool_theory Or in more charitable terms: if an investment has a positive expected return according to their model (meaning that they think they can sell their shares / tokens in the case of some VCs), they do it.

Who was the greater fool? Sequoia gave SBF money and SBF stole it.

Re: FTX balance sheet, revealed

#284

Post by manholio »

lottin wrote: post #187
manholio wrote: post #172

Earlier quoted context omitted.

The coin the central bank issues is a liability in its balance sheet. If it prints 1 trillion, uses it to buy 1 trillion worth of commercial paper and those assets lose 10%, then the bank has liabilities worth 1 trillion (outstanding currency) but only 900 billion in assets to cover them. Technically in default, but also in a very special economic position, because no body expects the central bank to ever cover its f…

Central bank reserves are not a liability because they don't entail a financial obligation. They're only listed as a liability on the balance sheet because it's convenient from an accounting perspective. When a central bank buys a bond, they use reserves, which are not a liability in a financial sense, therefore the central bank makes an instant profit . Even if the bond were to lose 80% of its value, the central ban…

It's not just "accounting convenience" it's literally the way the profit vs loss of the central bank is defined. The central bank typically has a legal obligation to maintain stable prices, so while outstanding currency is not a liability in the conventional sense with a certain maturity date, interest etc., it's undoubtedly a debt towards society at large, which could presumably need to be redeemed and sterilized in the course of monetary policy, at least in part. Outstanding currency is a perpetual zero interest loan towards the central bank by the holders of currency.

If a central bank loses 80% of its real reserves, and financial circumstances arise where it must repurchase more than 20% of it's issued currency, for example to defend the exchange rate against a capital flight, than the bank is effectively "bankrupt" - it can no longer fulfill its legal role and regulate the value of the national currency. It's not a traditional bankruptcy, but it's a de-facto failure which many central banks experienced.

Re: FTX balance sheet, revealed

#285

Post by therealdrag0 »

everybodyknows wrote: post #238
bmitc wrote: post #117

Earlier quoted context omitted.

I think all political donations above a certain level should be scrutinized and audited and then banned at higher levels. But I don’t think the politicians care. They removed the limits to political donations and haven’t looked back, and it has been chaos ever since. I was disturbed by Robert Mercer’s dastardly part in the 2016 election, both his donations, his people placing, and his technical consulting. The guy is…

> I don’t think the politicians care ... Of course they don't, taken collectively. Investigative journalists are our slender hope. They and those few politicos who didn't get a share of the loot, and may now see pushing for tighter regulation as a career opportunity.

Iirc many do care; it’s tedious for them to spend so much time making phone calls sucking up and asking for money from donors. But apparently they don’t care enough or there is a coordination problem such that it doesn’t get fixed.

Re: FTX balance sheet, revealed

#286

Post by grey-area »

lupire wrote: post #281
grey-area wrote: post #59

Earlier quoted context omitted.

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.

Is Binance really in that group? CZ alleged that FTX tried to crash Binance's market a few years ago like Binance did you FTX last week, but failed because they actually hold reserves.

Yes Binance seem like a scam, and even if totally legit their net worth is in currencies which have fallen dramatically and will keep falling. They haven’t had a proper audit, so you just have to trust them.

https://www.bloomberg.com/news/articles/2022-11-11/binance-d...

Re: FTX balance sheet, revealed

#287

Post by guy_c »

Based off the balance sheet FTX may have peaked (September 2021) with more than $100 billion of paper gains in "less liquid" assets.

  Token   Last wks  Last wks  Estimated   Peak     Peak         Peak
           value     price     holding    price    date         value
  FTT     $5.9bn    $24.00       246m      $77.69  09-Sep-2021  $19bn
  SRM     $5.4bn     $0.75     7,240m      $12.50  13-Sep-2021  $90bn
  SOL     $2.2bn    $32.00        70m     $258.78  07-Nov-2021  $18bn
Just speculation, but once you've "made" $130bn you feel like a genius. You might want to start acting like a hundred billionare. Time to start throwing money around. Especially spending it on anything that helps you realise those gains.

But FTT/SOL/SRM is not very liquid. So you use your liquid assets (i.e. your customers' USD, USDT, BTC and ETH). People might wonder where you get all this cash. You don't want to admit you are using customer funds and you only have gains on tokens you printed. So pretend you're genius trader and run a highly profitable exchange.

Re: FTX balance sheet, revealed

#288

Post by ilrwbwrkhv »

jasonwatkinspdx wrote: post #196
ilrwbwrkhv wrote: post #164

Earlier quoted context omitted.

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 u…

If you think YC somehow provides protection against rat duck games by VCs I have some very bad news to share with you.

I have spent and worked with VCs for over a decade. I agree that VCs like a16z and Sequoia are still snakes but YC is a forcing function for them to at least act like they are better.

Re: FTX balance sheet, revealed

#289

Post by Melting_Harps »

williamcotton wrote: post #197
mkagenius wrote: post #159

Earlier quoted context omitted.

> this was the typical disruptor cosplaying grifting Being connected and well off, should now be a sign of lack of inventive mind than having one. VCs think they are risk takers but rather go for well connected SV folks unconsciously or consciously to avoid risks. I hope these two three episodes like Theranos put some sense in them.

> Being connected and well off, should now be a sign of lack of inventive mind than having one. Or how about it is neutral?

> Or how about it is neutral?

That is never the case in the VC model; who knows you will always be more important than what you know or who you know. It's often tolerated because the king makers like Altman at YV spread the funds far enough for it to be seen as 'fair' but it's always been an insiders game if you wanted anything but a total take over for funding since capital got so concentrated in those systems.

Re: FTX balance sheet, revealed

#290

Post by mym1990 »

blue_light_man wrote: post #61
mym1990 wrote: post #53

Earlier quoted context omitted.

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.

Gotcha, makes sense. Unfortunately the phase “never meet your heroes” ends up true more often than not.
Post reply on HN