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FTX used corporate funds to purchase employee homes, new filing shows

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Re: FTX used corporate funds to purchase employee homes, new filing shows

#71

Post by ethbr0 »

PragmaticPulp wrote: post #69
moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

The crypto space is full of projects with empty promises of future profits. If you're an investor looking at crypto projects, you're seeing hundreds of crypto pitches every year that are never going anywhere. Then Alameda comes along showing actual profits from their early trading operations . Someone who as actually figured out how to make money in the crypto world without selling their own tokens (yet). Compared to…

See also all accounts of Twitter deal funding, which seemed to boil down to "I'm oversubscribed (lie), so you'd better say yes now and give me more money than you want."

Which is essentially all fundraising in a crowded market, but you would expect investors to be more sophisticated. Even accounting for selection bias (we're opining on the ones who invested).

Re: FTX used corporate funds to purchase employee homes, new filing shows

#72

Post by zamalek »

_fat_santa wrote: post #20
foobarian wrote: post #16

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a successful crypto business that would advance the whole field forward? Perhaps Coinbase is an example of that, though maybe not as well known due to less drama?

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids…

> Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way

People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#73

Post by oldgradstudent »

twblalock wrote: post #44
foobarian wrote: post #16

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a successful crypto business that would advance the whole field forward? Perhaps Coinbase is an example of that, though maybe not as well known due to less drama?

Even a well-run exchange would not make the magic beans worth anything.

But that's the customer's problem.

An exchange can make money letting the customers trade different types of magic beans with each other.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#74

Post by w23j »

Those are some candid remarks by the new CEO.

"I have over 40 years of legal and restructuring experience. [...] Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated[1] and potentially compromised individuals, this situation is unprecedented."[2]

I am really looking forward to the next Matt Levine column going through this filing!

[1] Ouch that hurts. At least you want to go down in history as a criminal mastermind!

[2] https://pacer-documents.s3.amazonaws.com/33/188450/042020648...

Re: FTX used corporate funds to purchase employee homes, new filing shows

#75

Post by DebtDeflation »

unmole wrote: post #15
testplzignore wrote: post #7

I would guess that the accounting firm that did the audit will be going the way of Arthur Andersen after the Enron scandal. And how many of their clients also have "interesting" financials?

> The FTX Group received audit opinions on consolidated financial statements for two of the Silos – the WRS Silo and the Dotcom Silo – for the period ended December 31, 2021. The audit firm for the WRS Silo, Armanino LLP, was a firm with which I am professionally familiar. The audit firm for the Dotcom Silo was Prager Metis, a firm with which I am not familiar and whose website indicates that they are the “first-ever…

>Armanino LLP,

Oh look, the same one that "audits" Kraken.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#76

Post by abluecloud »

jerf wrote: post #54
moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

That's one theory. Of course, given the depth of financial depravity on display here and the incredible thinness of the financial defense, one must also entertain the theory that they did do the due diligence, they were aware of how dangerous this was, and they invested anyhow for other reasons. And that those reasons are probably not good. There have been many cases where companies go to great lengths to do accounti…

>And that those reasons are probably not good.

what would those be?

Re: FTX used corporate funds to purchase employee homes, new filing shows

#77

Post by bombcar »

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

Nobody wants to admit that a vast majority of VC due diligence is just assuming that the other VCs did due diligence.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#78

Post by coding123 »

zamalek wrote: post #72
_fat_santa wrote: post #20

Earlier quoted context omitted.

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids…

> Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.

is normies some kind of insult

Re: FTX used corporate funds to purchase employee homes, new filing shows

#79

Post by bombcar »

bostonsre wrote: post #30
foobarian wrote: post #16

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a successful crypto business that would advance the whole field forward? Perhaps Coinbase is an example of that, though maybe not as well known due to less drama?

I haven't been following coinbase too closely, is there any visibility into their finances?

If/when coinbase blows up it’ll be the standard story (expenses > revenue + new investments) rather than this paper mache tiger that FTX was.

Hopefully.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#80

Post by bostonsre »

foobarian wrote: post #61
bostonsre wrote: post #41

Earlier quoted context omitted.

That's good to hear. I don't invest in crypto, and it sucks that some unreputable companies are impacting the space, but at least there is a relatively safe haven where people that do invest can avoid scams.

Honestly I think it's unfortunate that crypto turned into such a big investing platform. The whole point of something like BTC was that it would be a currency, not an investment. When filling a tank from zero, there is inevitably a lot of growth at first. I think this is what happened to BTC and attracted a lot of the wrong kind of usages. I wonder if when the ecosystem reaches an equilibrium it will become better at…

Yea, I didn't really understand the hype wave/gold rush that turned it into an investment, so it seemed risky to invest. I did use it way back when in college as a currency on a site that no longer exists and it seemed to be a stable and pretty useful payment method at the time. But yea, maybe it will stabilize and become a currency again when enough apathy sets in or maybe when/if it becomes regulated.
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