271–280 of 437 posts
For even more context of how bad SBF was at League of Legends, a large part of their player-base is children and teens. You would not expect a normal functioning 30 year old man to lose to 12 year olds after years of playing with the frequency he did.
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this is exactly what happended at FTX/Alameda. A bunch of "smart" guys who backstopped and over-extended loans to players, and their losses were magnified with their over-leveraged positions, that was backed up with assets with no values. That's exactly what happens in just about every financial scandal.
FTX took customer deposits (which were supposed to be held in custody and untouched, according to their TOS) and loaned them out to Alameda to gamble with. That is entirely different from being over-leveraged and having your debts default.
This is what I initially suspected. But we can see FTX's balance sheet [1]. There is no loan to Alameda. "FTX shot its customer money into some still-unexplained reaches of the astral plane" is the best explanation we have for billions of missing dollars [2].
[1] https://www.ft.com/content/0c2a55b6-d34c-4685-8a8d-3c9628f1f...
[2] https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...
> 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…
I'm wondering if the numbers are believable. That's because I think they are doing "paper valuation," like when a drug bust happens, and the value of the kilo is broken into "street-level" packets; quadrupling the value. I am not a crypto expert, but from the bit I do know, it seems as if it's fairly difficult to correlate fiat with crypto.
Perhaps "only" $5bn was real and much of that was from institutional investors. Not yet clear how many retail rubes have been caught up in this.
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>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…
I'm not sure paying more will help. It looks like greed can be boundless, so as long as power converts to money malicious actors will keep abusing it. Perhaps we should make power unattractive to such types instead, making it not lucrative so that only crazy* individuals who are content with good enough clean salary seek it out of dumb* desire to make the world better. * In a good way, obviously.
Making elected positions pay very little, rather than discouraging people who seek wealth, will limit them (even more) to people who are already wealthy, because they will be able to bankroll the expected lifestyle out of pocket.
Furthermore, for those who go into politics looking for money (as opposed to those who go into it looking for power, which is a related, but separate, issue), the salary is peanuts compared to the kinds of money they can get from lobbyists, or as a lobbyist themselves once they leave office. So reducing the salary will have very little effect on that.
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Isn't this essentially what a PAC is?
My understanding is that a PAC can pay for advertising and campaign costs but I'm suggesting literally just giving it to them, straight to their bank account.
Before or after they were bribing politicians for favourable regulation for FTX at the detriment of their competitors who were not fraudulent? https://prospect.org/power/sam-bankman-frieds-multimillion-d... > Crypto’s supporters in Congress are determined to ignore the massive gap in capacity between the two agencies; in fact, they likely understand that its incapacity is part of its appeal to FTX. A bill proposed by…
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.…
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>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.…
Correct. Arrogance is not illegal (yet).
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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"?
Armanino was FTX's auditor [1].
[1] https://www.afr.com/companies/financial-services/ftx-collaps...
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They accepted the risk of losing $100m because they thought there was a significant chance of getting a much bigger return. Obviously in this case the bet didn't pay off, but putting 0.05% of the AUM in a high risk investment is hardly a scandal.
Teacher's Venture Growth is 8bn AUM. It makes complete sense to me that Ontario Teachers as a whole should put 4% of its assets into a venture fund. TVG put well over 1% of its assets into FTX. Numerous people who work for the venture fund, who are paid 10-100X the income of the retirees in the fund to make investing decisions, went ahead with this investment without asking themselves: 1. Why isn't there a crypto-sav…
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FTX took customer deposits (which were supposed to be held in custody and untouched, according to their TOS) and loaned them out to Alameda to gamble with. That is entirely different from being over-leveraged and having your debts default.
> FTX took customer deposits (which were supposed to be held in custody and untouched, according to their TOS) and loaned them out to Alameda to gamble with This is what I initially suspected. But we can see FTX's balance sheet [1]. There is no loan to Alameda. "FTX shot its customer money into some still-unexplained reaches of the astral plane" is the best explanation we have for billions of missing dollars [2]. [1]…
>negative $8bn entry described as “hidden, poorly internally labled ‘fiat@’ account”
probably had something to do with the loan as that seems to be roughly the amount and the description literally makes no sense.