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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

#351

Post by christiangenco »

woah wrote: post #253
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.

Can I ask why? If you wanted to put money into crypto, why didn't you use a blockchain where you could verify your holdings and nobody could take them from you? BlockFi was just an incredibly shitty bank.

For sure. "Not your keys not your coins" and all that.

Here's my rationale: https://news.ycombinator.com/item?id=33779052

Re: BlockFi files for bankruptcy as FTX fallout spreads

#352

Post by parkaboy »

On the lending-side. I just want to give a big customer shoutout to Unchained Capital (https://unchained.com) for making it through this mess. I took out some collateralized loans this past year for my startup and looked at both them and BlockFi.

I've had the long unfortunate history of being burned several times (Mt Gox, Pirate@40, Friedcat/ASICMiner...). BlockFi of course had a significantly lower interest rate, but Unchained designed their product and messaging around trust (primarily using multisig wallets and promise that they don't rehypothecate)--which, after my experiences, sold me. It was a little painful to go with the higher interest rate, but damn am I now glad that I did.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#353

Post by JohnFen »

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.

You should talk to a lawyer with experience dealing with bankrupt companies.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#354

Post by disgruntledphd2 »

f1recat wrote: post #170
Mistletoe wrote: post #97

Earlier quoted context omitted.

Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars. What do (did) 7000 people do at Twitter? I hate to ask the question because it aligns me with Elon whom I despise right now. But what do all the employees do at tech companies? I thought the beauty of tech and why the valuations we…

Uber eng count is about 3500 and given the scope this can be considered as very lean

That's not lean. FB had less than that in total employees before they went public, at which point they were already profitable and had over a billion users.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#355

Post by Karunamon »

ceejayoz wrote: post #324
Karunamon wrote: post #316

Earlier quoted context omitted.

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.

A fork implies 2 diverging lines. Nobody's hand was forced in the ether versus ether classic fork.

Tether is centralized and a scam (and arguably a scam because it is centralized) and irrelevant to the discussion. Anyone can make any token they want and run it according to whoever's rules; this logic would indict the entire internet based on the existence of badly moderated websites.

And cryptography can be made a crime as well. Meanwhile, in the world we inhabit today rather than infinite hypothetical ones, no such thing is happening outside of totalitarian governments, and despite their effort, not one single crypto currency transaction has ever been successfully censored.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#356

Post by Eisenstein »

lottin wrote: post #328
Eisenstein wrote: post #286

Earlier quoted context omitted.

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.

According to wikipedia, under 'Central Bank': "a central bank possesses a monopoly on increasing the monetary base. Most central banks also have supervisory and regulatory powers to ensure the stability of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks."

Since the major collapses were by organizations which had a monopoly on creating their own currencies ("tokens") you could call them 'central banks'. Note I am not defending cryptocurrencies -- I am pointing out that you calling something 'gibberish' when people do have an understanding of the meaning is not productive.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#357

Post by disgruntledphd2 »

vkou wrote: post #136
Mistletoe wrote: post #97

Earlier quoted context omitted.

Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars. What do (did) 7000 people do at Twitter? I hate to ask the question because it aligns me with Elon whom I despise right now. But what do all the employees do at tech companies? I thought the beauty of tech and why the valuations we…

> Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars. If you view Twitter as a 'service for posting 140 characters', they don't need 7000 employees. If you view it as a 'service for supporting five billion dollars worth of ad spend across the entire world', with all the proprietary…

Again, Facebook had this much revenue and much better growth when they went public in 2012.

https://companiesmarketcap.com/facebook/revenue/

Re: BlockFi files for bankruptcy as FTX fallout spreads

#358

Post by pavlov »

christiangenco wrote: post #342
notch656a wrote: post #330

Earlier quoted context omitted.

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 sho…

OP here! #1 was my motivation, though at the moment I'm definitely feeling like #4 played a role. My rationale was that crypto just sitting in cold storage could only gain value if the underlying asset appreciated which is effectively currency speculation. By storing it in a crypto "bank" my money could be working to generate actual value via. liquidity and loans akin to a real bank. If the money was earning a modest…

> “generate actual value via liquidity and loans akin to a real bank”

What’s missing from this picture is actual productive economic activity. Banks make loans to real-world businesses who use it to produce goods and services, and assuming those are desirable in the market, part of the margin on those products ends up paying the interest to the bank.

Crypto lenders make loans to crypto traders who ultimately produce cash by extracting it from other traders and from new investors that bring in real cash into the system at the bottom of the pyramid. There’s nothing producing anything in the hermetic crypto bubble. When the retail interest ended, the system started running out of dollars.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#359

Post by rwmj »

christiangenco wrote: post #343
throwaway_4ever wrote: post #279

Earlier quoted context omitted.

Let this serve as a reminder to always stick with investments in $VTI and $BND in the future. It'll be a positive.

As long as Vanguard doesn't file for bankruptcy!

Vanguard doesn't hold customer funds, they're held by a separate nominee company. More importantly, it's properly regulated.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#360

Post by christiangenco »

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…

This is helpful—thank you.

It sounds like as long as there's enough money to pay the admin, the government, secured creditors, and unsecured creditors, anything left over would get split amongst individual investors like me. Is that right?

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