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What Happened at Alameda Research

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Re: What Happened at Alameda Research

#201

Post by wbl »

jasode wrote: post #142
DebtDeflation wrote: post #120

> Most news accounts seem to portray the scale of the bankruptcy as relatively small. This is a key point. They lost $16B in customer deposits. LTCM lost $4.6B in investor funds. Enron lost $11B in shareholder capital. Interestingly, while Madoff is widely quoted as having lost $65B, that was almost all fabricated paper wealth, actual losses were around $18B and $14.4B of that was recovered and returned. All of these…

>LTCM lost $4.6B in investor funds. [...] All of these situations are obviously somewhat different, [...] biggest financial frauds/scandals in history. LTCM shouldn't be in that list because that wasn't fraud. That hedge fund had a flawed math model of volatility of their holdings when a cascade of events got triggered by Russia defaulting on their bonds. LTCM losses were magnified by their over leveraged positions.…

Not just PhD. World famous economists with Nobel prizes.

Re: What Happened at Alameda Research

#202

Post by paulusthe »

mkj wrote: post #159
DebtDeflation wrote: post #120

> Most news accounts seem to portray the scale of the bankruptcy as relatively small. This is a key point. They lost $16B in customer deposits. LTCM lost $4.6B in investor funds. Enron lost $11B in shareholder capital. Interestingly, while Madoff is widely quoted as having lost $65B, that was almost all fabricated paper wealth, actual losses were around $18B and $14.4B of that was recovered and returned. All of these…

If they lost it through bad bets, who was on the winning side of those bets?

Crypto shorts

Re: What Happened at Alameda Research

#203

Post by hn_20591249 »

halukakin wrote: post #105

"FTX periodically uses a portion of its profits to buy back FTT tokens. This makes FTT kind of like stock in FTX: The higher FTX’s profits are, the higher the price of FTT will be." I think this is an interesting alternative to equity vesting. Not all countries have laws that make equity vesting possible. Also this could work if you are a US company and hiring from all abroad. You can give tokens to your employers ab…

It could work, but the moment FTX started allowing FTT to be put down as collateral on multi-hundred million dollar liabilities, the entire house of cards fell apart.

Re: What Happened at Alameda Research

#204

Post by wikfwikf »

headsoup wrote: post #192
SilverBirch wrote: post #177

Earlier quoted context omitted.

I think you're misunderstanding what the NYT article is, it's not a piece of deep investigative journalism, it's an interview with SBF with context attached.

So an entertainment piece, as mentioned? I can't see the article because of the login, but what does the piece achieve? Does the interview ask Sam hard questions?

There is a mirror of the NYT article linked from TFA.

Re: What Happened at Alameda Research

#205

Post by NickC25 »

Stranger43 wrote: post #199
williamcotton wrote: post #68

Earlier quoted context omitted.

If the cup is half empty it's called bribing. Otherwise it's called lobbying. I don't know anything about the CFTC in particular but I'm familiar with the general idea of lobbying and the role it plays in a representative government. Elected officials have to interface with basically every industry in the country. How is any specific representative in a legislature going to have the knowledge required to vote on a ba…

The problem is not with industry insiders leaving private enterprise to go work for the government, the problem is government regulators leaving the government to collect large paychecks from the companies they used to be tasked with regulating, i.e. that there is the appearance of personal benefits to regulate to the benefits of future employers rather then the general public. What's actually needed is government ag…

>but this is kind of hard to do when government work is not seen as something of particularly high status,

Super easy to solve for - pay them more.

With the amount of money the government has (the DoD has a nearly 2 trillion dollar yearly budget), it should be relatively trivial to be able to outspend the private sector.

I hate paying taxes, but if those taxes go towards paying an extremely competent professional who will prevent this sort of shit from happening (which would cost us more in taxes to fix), I'm more than happy to pay as much as the government would want me to.

Re: What Happened at Alameda Research

#206

Post by pge »

nisegami wrote: post #112
howmayiannoyyou wrote: post #64

Earlier quoted context omitted.

Nobody will be voted out. You cannot get elected without cash, but if you do then you can't remain in office without it. You also won't influence legislation without money in your campaign or PAC wallets. If HN users want to impact policy and legislation, its not happening without donating a lot of money (or to a limited extent time) en masse to lobbyists and institutes that believe in whatever it is you believe in.…

I've wondered a lot about a hypothetical scenario where people organize and crowdfund a pool of money with the intent of disbursing it to anyone who votes for the legislation they want. For example, vote to codify Roe and you can get a slice of the pie. It's almost surely explicitly illegal though, but the absurdly wealthy are already playing this game, why can't we do it too?

Isn't this essentially what a PAC is?

Re: What Happened at Alameda Research

#207

Post by Yizahi »

Semaphor wrote: post #121
xiphias2 wrote: post #93

Earlier quoted context omitted.

I'm sure they are doing (or at least were doing) fractional reserve banking as well. They have their own token just like FTX, wihch is a bad sign. Maybe right now they are working on fixing it. Kraken is one of the few exchanges that provide proof of reserves, which is basically just a Merkel tree of all user assets which users can use to check that the exchange holds their money. This is not just trivial to implemen…

This is pretty cool [0] is the Kraken page, at [1] someone collected both background information, links, and PoR entities, and finally a 2014 post of Kraken’s first PoR audit [2]. [0] https://www.kraken.com/proof-of-reserves [1] https://niccarter.info/proof-of-reserves/ [2] https://bitcointalk.org/index.php?topic=528432.0 Edit: And here is CZ of Binance claiming they’ll do it soon as well: https://nitter.kavin.rocks/…

Have you read Kraken's own page about that? Here is a quote:

"The results of our most recent audit were once again verified by top-25 global accounting firm, Armanino LLP. " (1)

So from this I read that Kraken has done audit themselves and then some other firm has verified it. This (if true) is called attestation, and not audit. Attestations are an empty claim with no proof in the tokenbro industry.

And second issue I see (directly related to the first) - they list some tokens they are auditing. Auditing on chain. But what if the Kraken company has a completely off the chain liabilities? Like a contract where they loan money/btc to some shady person and get some worthless tokens as a collateral in return. You can't see this on chain, only a real independent audit can uncover such things.

(1) https://blog.kraken.com/post/15002/kraken-proof-of-reserves-...

Re: What Happened at Alameda Research

#208

Post by blitzar »

anonymoushn wrote: post #118
tpxl wrote: post #67

Earlier quoted context omitted.

> FTX was still considered a low volume exchange According to a random source, they moved volume on the order of 500 billion. Transaction fees of 0.1% for 500 billion is a lot of million to keep the lights on.

For a maker and taker with best fees, the exchange only made 0.5bps, not 10bps. We happen to know that top rebates were pretty hard to achieve though, so most volume probably paid at least a couple more tenths of a basis point.

> According to a random source, they moved volume on the order of 500 billion.

According to FTX, the entire market moved 250 billion including derivatives of which they were 13 billion

https://ftx.com/volume-monitor

Re: What Happened at Alameda Research

#209

Post by kasey_junk »

origin_path wrote: post #146
thablackbull wrote: post #71

Earlier quoted context omitted.

OTPP has quite a solid reputation and this particular investment was a miniscule speculative bet. You can see the performance over time here [1]. [1] https://www.otpp.com/en-ca/investments/our-advantage/our-per...

How do you know there aren't many other bets like this on their sheets?

They are quite open about their investments: https://www.otpp.com/en-ca/investments/our-investments/

Here are the other bets in their venture category: https://www.otpp.com/en-ca/investments/our-investments/teach...

Re: What Happened at Alameda Research

#210

Post by Yizahi »

saurik wrote: post #176
DebtDeflation wrote: post #137

Earlier quoted context omitted.

A Merkle tree may show what crypto assets are held, but it doesn't stop the exchange from having a balance sheet with a negative $8bn entry described as “hidden, poorly internally labled ‘fiat@’ account”. Until these crypto companies are audited by actual recognized auditors I would just assume that everything they say is suspect.

The auditor that Kraken used claims to be "one of the top 25 largest accounting, consulting and technology firms in the U.S.". Is the idea that they aren't "auditors"?

"The results of our most recent audit were once again verified by top-25 global accounting firm, Armanino LLP. " (1)

So from this I read that Kraken has done audit themselves and then some other firm has verified it. This (if true) is called attestation, and not audit. Attestations are an empty claim with no proof in the tokenbro industry.

And second issue I see (directly related to the first) - they list some tokens they are auditing. Auditing on chain. But what if the Kraken company has a completely off the chain liabilities? Like a contract where they loan money/btc to some shady person and get some worthless tokens as a collateral in return. You can't see this on chain, only a real independent audit can uncover such things.

(1) https://blog.kraken.com/post/15002/kraken-proof-of-reserves-...

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