201–210 of 451 posts
how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?
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What's interesting is how little scrutiny was applied to FTX and they're the one who lost people's money. Tether has been under intense scrutiny for years and is still working just fine. No one has lost their money in Tether despite huge outflow events. There's a lesson in here.
They are under scrutiny, and here are some facts: - they lied about the reserves and weren't backed at 100% - they did fraudulent attestations wiring money for the 'snapshot' of accounts for the attestation then moving it back to owners (from Bitfinex exchange if I remember - which is the same people - see a pattern here ?) - held money in their personal accounts the above were proven without doubt by the NY AG. - pr…
Why would this matter? Tether gives out USDT to (almost) anyone who wants it in exchange for cash, and only redeems it for cash if you give them back the USDT... 100% of their USDT could be held by FTX and that would not suddenly cause them to have any exposure to FTX.
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Regulations didn't stop Enron.
Yes, which is why the US Congress added a whole bunch of new regulations (Sarbanes-Oxley) to prevent future Enrons.
But it's shockingly easy not to and auditors couldn't possibly catch all of the instances of non-compliance
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The EA shtick really feels like Big Tony walking Bart through the logic that selling stolen cigarettes to strangers by the truck load is the same as stealing bread to feed your starving family.
I don't know why it would feel like that. The EA community came out immediately and very forcefully in opposition to SBF and this perversion of EA philosophy since the FTX blow up [1] and they have been vocally opposed to shady practices in the service of EA since long before the last week. [1]: https://forum.effectivealtruism.org/posts/XHrHsrQGyr4NnqCA7/...
Listed companies on the NASDAQ and NYSE have lots of requirements here (eg internal and external audits). Obviously these don't apply to FTX but the truly shocking thing here is the likes of Sequoia and other sophisticated investors did not require an adult in the room in the form of a CFO.
They literally handed billions of dollars to a 20-something with absolutely no supervision or accountability. I would not be surprised if this lack of oversight doesn't land them in court from customers and other investors. You may think they are shielded from this through limited liability and corporate structures but that doesn't innoculate them against tort claims and you could probably make the case they are recklessly negligent or even as far as being liable in conspiracy to commit fraud (before or after the fact).
SBF engaged in on-the-record messages with a reporter about this. This is how clueless this man is. He either doesn't have lawyers or he's ignoring them as any lawyer will tell you to STFU [2]. No good can come of this ans. SBF and his cohorts are facing the prospect of being on the run for the rest of their lives from US authorities or possibly even spending the rest of their lives in prison.
It's that serious.
[1]: https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/
How can anybody be surprised ? The 2 biggest players - Tether and Binance are much worse and still very well alive. Both are several times bigger (on paper) than FTX. Binance is already banned in most countries and without headquarters. Do anybody believes they have a proper gouvernance ? Tether was proved to lie about it réserves several times, recently started publishing attestations about reserves - attestations t…
> both could disappear tomorrow with all the money If they go then the magic beans are worth $0. In which case - what are the damages? They've ran away with magic beans worth $0. To quote Monty Python: "I mean, what have you got to lose? You know, you come from nothing. You're going back to nothing. What have you lost? Nothing."
As long as it happens slowly enough and with enough steps, that's 1 USDT converted to 1 USD.
The damages are everyone with money in a USDT denominated exchange who believes that the actual USD still exists somewhere in the system. It left months / years ago, the people still playing are the ones holding the empty bag.
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?
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They are under scrutiny, and here are some facts: - they lied about the reserves and weren't backed at 100% - they did fraudulent attestations wiring money for the 'snapshot' of accounts for the attestation then moving it back to owners (from Bitfinex exchange if I remember - which is the same people - see a pattern here ?) - held money in their personal accounts the above were proven without doubt by the NY AG. - pr…
> - each time an exchange / scam goes down - they publish those papers saying they have 0 exposure to them (recently FTX, Genesis) - this despite findings that Alameda (FTX affiliated hedge found) was on the recepient of >30% of all Tethers Why would this matter? Tether gives out USDT to (almost) anyone who wants it in exchange for cash, and only redeems it for cash if you give them back the USDT... 100% of their USD…
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Do they actually exchange them for money or are they just creating them? There has never been a reputable audit of Tether.
Tether's 'market cap' is like 60 billion or whatever, I think most of that was just created out of thin air, but I think some of it was exchanged for real dollars, like a few percent, maybe a couple of billion dollars. In which case, when the fraud comes crashing down, they will have stolen hundreds of millions, to maybe a couple of billion dollars. Imagine if somebody stole a piece of art worth hundreds of millions…