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BlockFi files for bankruptcy as FTX fallout spreads

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Re: BlockFi files for bankruptcy as FTX fallout spreads

#321

Post by fdgsdfogijq »

Melting_Harps wrote: post #245
fdgsdfogijq wrote: post #50

Earlier quoted context omitted.

I talked to an employee that left last spring. She said they had literally no idea what they were doing. The founders are just ivy educated 30 year olds. So they decided to just start hiring everyone they could from paypal, to move into "blockchain payments". They paid huge sums. The directors there had no experience ever managing huge teams of people. It was a giant mess of unqualified people funded by cheap capital…

> They've raised about a billion dollars of VC - https://www.crunchbase.com/organization/blockfi-inc/investor ... > talked to an employee that left last spring. She said they had literally no idea what they were doing. The founders are just ivy educated 30 year olds So was SBF (MIT) and raised from Sequoia and Blackrok and his GF was a Stanford'ite with a Math degree and is responsible for the largest loss of funds f…

Pretty clear some ivy league degree holders are raising money with no product/no qualified background. While others are slaving away to get "product market fit" before a VC will touch them

Re: BlockFi files for bankruptcy as FTX fallout spreads

#322

Post by lottin »

halpmeh wrote: post #297
lottin wrote: post #288

Earlier quoted context omitted.

Money and capital are different things. Capital in a broad sense is any durable good that is employed in the production of goods and services. For example, a road. Money is not capital. Money is simply a good without intrinsic value that is used as a means of exchange. As a result creating and destroying money doesn't create or destroy wealth.

You are using a very non-standard definition of capital. > As a result creating and destroying money doesn't create or destroy wealth. I'll give you a MacBook, which is a durable good you can use to produce goods and services, if you go to the bank, withdraw all of your money, and then set it on fire. This is a good deal for you. Your wealth will not change from setting the money on fire, as destroying money does not…

If you set your own money on fire, the amount of wealth in the economy won't change. However you'll be worse off, because your share of the total wealth is now smaller (and everybody else's share is bigger).

Re: BlockFi files for bankruptcy as FTX fallout spreads

#323

Post by itake »

lordnacho wrote: post #301
christiangenco wrote: post #235

My wife and I had about 10% of our life savings in BlockFi. This is a pretty big blow for us, especially while gearing up to start a family. It's easily in the top 5 worst things to happen to me in my life. Is there any hope of individual creditors getting any of their money back? I'm unfamiliar with how bankruptcy works.

> I'm unfamiliar with how bankruptcy works. I'm not a specialist in the area, but here's my explanation as a financial professional. When a company goes bankrupt, it's assets and liabilities are summarized by an administrator who is hired. Typically a well known firm with lots of experience, and they will do things like find out where the assets are, possibly liquidating some of them. You may have seen that FTX has a…

The blockfi terms said the money was always the client's money and that wallet funds are not lent out.

My not-a-lawyer interpretation is I didn't 'give' the money to Blockfi and thus Blockfi doesn't owe me any money. Am I understanding this wrong?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#324

Post by ceejayoz »

Karunamon wrote: post #316
rhaway84773 wrote: post #174

Earlier quoted context omitted.

The issue is that the problem cryptocurrencies solve is not a real problem. The blockchain, being a public ledger, ensures that transactions are accurately recorded and can be publicly verified as such. But it’s been centuries since the actual accurate recording of transactions has been an issue. The real problems are far removed from this. When was the last time you heard about people complaining that they paid off…

You ignore the other big benefit which is impossibility of censorship. When was the last time you heard about people complaining that they can't do lawful and legitimate business because Visa or MasterCard (basically a duopoly) don't like them? This problem is not trivial, and as far as I can see crypto is the only scalable solution to it outside of legislation that isn't ever going to happen. What about the privacy…

> You ignore the other big benefit which is impossibility of censorship.

That's a silly claim. Ethereum forked because of a hack and enough people wanting to undo it. Tether regularly freezes funds (https://www.coindesk.com/business/2022/11/10/tether-freezes-...). Ownership of a cryptocurrency can be made a crime. Developers can be sanctioned and arrested.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#325

Post by weard_beard »

Animats wrote: post #223
weard_beard wrote: post #200

Earlier quoted context omitted.

The same could be said for FTX. There just needs to be regulation about how sound the self-created coin backing your margin needs to be. Without regulation of the soundness of the economic value of your self-created coin you get a crypto crash. Am I crazy? Are we not describing 2 identical problems and classifying 1 of them as fraud? The soundness of loans in a deregulated environment is no better than the soundness…

Here's a tutorial on how to analyze a bank's balance sheet.[1] Few of the crypto clowns publish their balance sheet. FTX, we now know, didn't even have a balance sheet. [1] https://www.wallstreetmojo.com/banks-balance-sheet/

Thanks for this, so far that's 2 points of difference stated:

1) Regulatory oversight. 2) Relative transparency.

Legit differences between Crypto exchanges and traditional finance. Keep em' coming, I'm learning :)

Re: BlockFi files for bankruptcy as FTX fallout spreads

#326

Post by itake »

sebastian_z wrote: post #283

I was a BlockFi customer. I always had the sense that they wanted to do the right thing. They hired people with risk experience in traditional banking, had real customer support, engaged with regulators to get their interest rate product certified, etc. It is really a bit sad that they got entangled into the FTX situation. (I should also say that I withdrew my funds earlier. Otherwise, I may feel differently.)

It always felt like a facade to me. When 3AC collapsed and they were fined, they didn't really disclose how they 'solved' their liquidity problem. Taking a loan out just kicks the can down the road.

They also were handed an amazing deal that no one else was offering without taking a second to wonder why?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#327

Post by pavlov »

vasco wrote: post #214
r_hoods_ghost wrote: post #131

Earlier quoted context omitted.

No need to. Luckily every transaction has been recorded for you on a public blockchain that is easily traceable to your RL identity! Makes life a lot easier for the IRS and also means your employer can check whethee you've developed a penchant for donkey porn!

That fact that they can find it out doesn't mean you don't have to report it accurately. Most countries around the world know how much salaried employees make and still require them to declare it in a yearly tax submission and if they do it wrong, they'll get fined. The government knowing has nothing to do with you still needing to accurately report it.

I don’t know if “most countries” is correct. The USA certainly does this, but most European countries will prepare an automatic tax return for everyone based on the data they receive from employers, banks and brokerages.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#328

Post by lottin »

Eisenstein wrote: post #286
lottin wrote: post #162

Earlier quoted context omitted.

What idea? The idea of "centralised actor" isn't even an idea, it's gibberish.

If it is gibberish, why do many people apparently think it makes sense? Are you using 'gibberish' to disparage something you dislike, rather than to describe something as nonsensical?

A lot of people repeat what they hear without giving things any thought. I say it's gibberish because it doesn't mean anything. Try to explain what characteristics set a decentralised actor apart from a centralised actor. Remember that you can't use the word decentralised/centralised, because that's the words we're trying to define.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#329

Post by FireBeyond »

TacticalCoder wrote: post #178
woodruffw wrote: post #86

Earlier quoted context omitted.

Given the amount of handwringing we've seen over the past couple of weeks in re: Twitter's headcount, it astonishes me that we haven't seen anything close to that for these cryptocurrency firms. Twitter ran one of the world's largest social media networks with around 7000 people; what in the world is Kraken doing with ~3400[1]? [1]: https://www.linkedin.com/company/krakenfx

> what in the world is Kraken doing with ~3400 Kraken is one of the OG cryptocurrencies exchange. Maybe the oldest still around. They're in the business since 2013 or so. Since then the Crypsy, Quadriga, Mt Gox, FTX, etc. have all come and gone (with their customers' money) but Kraken is still there. If they are on a scam, it's a really long con: a decade and a half of a con? They're not "Binance big" but they do nea…

> They're in the business since 2013

> If they are on a scam, it's a really long con: a decade and a half of a con?

How is 9 years "a decade and a half"?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#330

Post by notch656a »

itake wrote: post #323
lordnacho wrote: post #301

Earlier quoted context omitted.

> I'm unfamiliar with how bankruptcy works. I'm not a specialist in the area, but here's my explanation as a financial professional. When a company goes bankrupt, it's assets and liabilities are summarized by an administrator who is hired. Typically a well known firm with lots of experience, and they will do things like find out where the assets are, possibly liquidating some of them. You may have seen that FTX has a…

The blockfi terms said the money was always the client's money and that wallet funds are not lent out. My not-a-lawyer interpretation is I didn't 'give' the money to Blockfi and thus Blockfi doesn't owe me any money. Am I understanding this wrong?

If someone has 10% of their money on a cex they are either

1) Farming it for interest

2) Collateral for trading / other asset

3) Maybe some other corner case I can't think of here

-or-

4) Morons.

My guess above was (1) since it was both a large amount and the losses were unexpected. I do not think it would be 'yours' except in the 4th case which would be morons storing unvested deposits on cex for any purpose but short term exchange.

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