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What Happened at Alameda Research

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Re: What Happened at Alameda Research

#291

Post by boh »

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…

The financial news (WSJ, FT, Bloomberg) is definitely less blasé about it. There's definitely a sense that a scam is slowly being unearthed.

I don't know if it's SBF previous political connections that are making most media outlets hesitant to delve into the details, but the scale of the failure is going to be unavoidable as more details emerge.

Too many institutional investors got burned and they will no doubt be eager to prove fault lest they themselves be blamed for poor judgement.

Re: What Happened at Alameda Research

#292

Post by syrrim »

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…

They lost roughly $8B in customer deposits. The $16B cited in the article is the total amount of money they lost which includes a sizable profit that they were supposed to have made on their legitimate business activities.

Re: What Happened at Alameda Research

#293

Post by pinkfairy10 »

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…

Madoff’s investors “lost” more than $14.4B. Many of them were invested in his funds for 20-30 years and received 0.77 on the dollar per your comment.

Re: What Happened at Alameda Research

#294

Post by jpm_sd »

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…

Was that $16B in "real money" (dollars), $16B in "pretend money" (astronomically overvalued cryptocurrency), or some of each?

Re: What Happened at Alameda Research

#295

Post by burkaman »

anonymoushn wrote: post #128
gillesjacobs wrote: post #3

I like how OP opens smugly by calling the NYT article a fluff piece, then proceeds to immediately cite anonymous Twitter anecdotes as better sources. He's right about the specific NYT article not including much pertinent information, but they're a serious journalistic publication and have verification standards for sources.

The piece is well informed and aggregates a variety of sources only a few of which are not completely credible. the NYT literally refuses to use the word "fraud" or hint at criminality after Sam stole ten billion dollars from customers.

> the NYT literally refuses to use the word "fraud" or hint at criminality

11/10: Meanwhile, the S.E.C. and the Justice Department are said to be investigating FTX for potential securities violations. [...] Whether S.B.F. or others associated with FTX also face civil or criminal action — and where such legal fights would take place — remains unclear.

- https://www.nytimes.com/2022/11/10/business/dealbook/ftx-cry...

11/11: Authorities worldwide are intensifying their scrutiny of the embattled cryptocurrency exchange, amid concern about improper use of customer money.

- https://www.nytimes.com/2022/11/11/business/dealbook/ftx-sbf...

11/11: The bankruptcy proceedings may be only the beginning of Mr. Bankman-Fried’s legal troubles. Federal investigators are examining the relationship between FTX and Alameda, and customers are likely to file lawsuits.

- https://www.nytimes.com/2022/11/11/business/ftx-bankruptcy.h...

11/12: The implosion of Mr. Bankman-Fried’s cryptocurrency exchange has already cost customers billions of dollars in lost crypto deposits, setting off law-enforcement investigations that could lead to criminal charges. [...] Investigators at the S.E.C. and the Justice Department are examining whether Mr. Bankman-Fried improperly used customer funds to prop up Alameda Research, a trading firm that he also owns. FTX lent as much as $10 billion in customer funds to Alameda, according to a person familiar with the finances.

- https://www.nytimes.com/2022/11/12/business/ftx-cryptocurren...

11/13: “Sam and FTX had a lot of good will — and some of that good will was the result of association with ideas I have spent my career promoting,” the philosopher William MacAskill, a founder of the effective altruism movement who has known Mr. Bankman-Fried since the FTX founder was an undergraduate at M.I.T., wrote on Twitter on Friday. “If that good will laundered fraud, I am ashamed.”

- https://www.nytimes.com/2022/11/13/business/ftx-effective-al...

11/14: Should the U.S. have moved faster to create an attractive regulatory environment so companies like FTX would have moved here and had to abide by Washington’s rules? Maybe. But if the FTX case turns out to be fraud, regulation unto itself may not have been enough to stop it. Madoff didn’t live on an island beyond U.S. jurisdiction — he was based on Lexington Avenue. [...] If we ultimately learn that FTX’s undoing is the first of many in an industry that has been built on a pile of offshore fairy-dust leverage, the regulatory lesson will actually be the opposite: The S.E.C., C.F.T.C. and Treasury will have proved prescient for all their warnings to the public that crypto was too risky.

- https://www.nytimes.com/2022/11/14/business/dealbook/ftx-ban...

11/15: Major questions still remain, such as whether FTX improperly used billions of dollars of customers’ funds to prop up Alameda Research, a trading firm that Bankman-Fried also founded.

- https://www.nytimes.com/2022/11/15/briefing/iran-clampdown-p...

Re: What Happened at Alameda Research

#296

Post by adrr »

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…

How much shareholders capital did FTX lose? I assume they lost billions of investor capital.

Re: What Happened at Alameda Research

#297

Post by [deleted] »

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.…

[deleted]

Re: What Happened at Alameda Research

#298

Post by memish »

spaceman_2020 wrote: post #171
kingkawn wrote: post #20

Earlier quoted context omitted.

Takes one to know one

I'm amazed that a man can build a company that literally created a reusable rocket and people will still call him a "bullshit artist". Also incredible how everyone on the left turned on Musk so quickly because he...tweeted some bad jokes? Strange reality we live in where your actions seem to matter so much less than your words. I thought it was the other way around.

You get a lot of internet points and clicks for jumping on the hate bandwagon and cynically tearing people down.

Maybe if they weren't so focused on a manufactured villain, and people and the media had put even a tiny fraction of this scrutiny on SBF, an actual fraud might have been mitigated. But no, let's go after the guy putting rockets in space and producing millions of electric cars in the real world. He's the real bad guy!

Re: What Happened at Alameda Research

#299

Post by eternalban »

pjc50 wrote: post #259
eternalban wrote: post #253

Earlier quoted context omitted.

Unless there is some sort of event horizon in financial systems, it is wrong to use the word "lost" as if it is impossible to find out who got these kingly sums. Billions of dollars were "blown" and the question we should be asking, very forcefully, is who got that money.

It's crypto! Once it's transferred off the exchange, it's in a pseudonymous wallet. Just to confuse matters, it appears that both the exchange was hacked and an insider was draining funds just before it shut down. But before that, there was a lot of "money" that went out the door in legitimate trading losses.

(I thought these [addresses] could be watched.)

> there was a lot of "money" that went out the door in legitimate trading losses.

Let's not give them easy pass on this. I could be wrong so correct me on this:

Easy setup is to have a bunch of people setup 'shitcoins' and shell companies, scam people to put actual money into the scheme to pump the price, and then pay inflated prices for your fellow scam artists' shitcoins, so they clean out, but the chumps who bought your coin are holding the bag.

Re: What Happened at Alameda Research

#300

Post by dwater »

DebtDeflation wrote: post #280
JumpCrisscross wrote: post #272

Earlier quoted context omitted.

> 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]…

I have a hunch that: >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.

It's also possible that the one hastily thrown together excel spreadsheet the CEO himself chose to release doesn't include the full accounting. Maybe Sam decided to leave off an illegal off-book loan?
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