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A software change allowed FTX to use client money

reuters.com

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Re: A software change allowed FTX to use client money

#361

Post by anonymoushn »

Godel_unicode wrote: post #359
anonymoushn wrote: post #328

Earlier quoted context omitted.

Even if you have special access, if you need 40ms (500ms p999) to compute a square root, you're not gonna be able to make worthwhile decisions on the basis of this access

Those times are wildly inaccurate on modern hardware with modern python, fwiw.

These are our observed latencies for their risk checks after sending millions of orders per day for months at a time (which doesn't sound like much, and isn't much, but is the entire order rate that they gave us while we were doing 0.5% of the maker volume on their exchange).

Re: A software change allowed FTX to use client money

#362

Post by thrwy_918 »

vintermann wrote: post #295
ithinkso wrote: post #265

Earlier quoted context omitted.

That's why be don't deserve the title of engineer in software and we should stick with coder or programmer. 'Hi mate. We just bought this rebar from Alibaba, saved as a ton of money. Could you sign here real quick? We need to finish that bridge!'

Engineer doesn't imply honesty. In those jurisdiction where it's a protected title, it just implies that you have some mix of STEM topics in your degree. Software engineers, in these jurisdictions, have that mix, and are as real as bioengineers (a.k.a hospital lab workers), chemical process engineers, construction engineers, etc. No one has had their engineer title taken away for being a crook, as far as I know. Unle…

> No one has had their engineer title taken away for being a crook, as far as I know

This seems an absurd claim, unless you're going to get very pedantic about some distinction between "engineer title" and "legal right to function as an engineer".

> https://montreal.ctvnews.ca/engineer-s-licence-revoked-after...

This is one example found after just a few seconds of searching, but it is absolutely commonplace to have your engineering license revoked for carrying out criminal activity.

> In those jurisdiction where it's a protected title, it just implies that you have some mix of STEM topics in your degree.

This seems a bizarre claim too. In jurisdictions where membership of a professional licensing body is necessary in order to refer to oneself as an engineer and practice as an engineer, it is absolutely not the case that all you need is the right "mix of STEM topics in your degree". It means you have a certain degree, have completed a set amount of work experience, have completed a professional certification exam and then maintain that license, which may require meeting other requirements periodically. And yes, "not being a crook" is certainly one of those requirements, and being involved in major criminal activity, especially criminal activity related to your professional practice, is absolutely grounds for having your license and certification as an engineer revoked.

Re: A software change allowed FTX to use client money

#363

Post by michaelbuckbee »

a2tech wrote: post #360
michaelbuckbee wrote: post #341

Earlier quoted context omitted.

If it's any consolation, the entire industry was in that state: poor controls, poor encryption, and security, etc.

"was"? It still seems like a confused mess with lots and log 'security' that people ignore

Sure, there's always room for improvement, but at the very least SSL/TLS is ubiquitous now, there actual TLS versions are much better, developers generally view holding onto CC data directly as toxic (the growth of things like Stripe checkout, etc.)

Re: A software change allowed FTX to use client money

#364

Post by imtringued »

mudrockbestgirl wrote: post #237
andrewstuart wrote: post #75

The real problem behind all these crypto companies is the people who make the money have no concept of what "integrity" is. They aren't coming from a baseline assumption that their job is to protect and interests and the money of their clients. Traditional banks, for the most part, have DNA built around protecting customer interests and customer money. Crypto companies have none of that attitude - behind every one of…

> Traditional banks, for the most part, have DNA built around protecting customer interests and customer money. I don't think we're living in the same world :) Traditional financial institutions are just as bad, if not worse, than most crypto companies. You just have look at all the financial system crashes and exchange frauds. A key difference is that the government is there to bail them out because they are tightly…

You clearly aren't aware of all the cryptocurrency exchanges that have gone bust. Exchanges are not banks, they are not supposed to act or even fail like banks. Exchanges only take a fee on every transaction. That is all they do. It is literally impossible to bankrupt an exchange if it is run honestly.

Banking meanwhile can fail even with honesty because of the nature of borrowing short and lending long.

Re: A software change allowed FTX to use client money

#365

Post by XajniN »

galaxyLogic wrote: post #185
arcbyte wrote: post #36

Earlier quoted context omitted.

Developers need to know the business better than the business people. Always. Otherwise you can't implement the software very well.

I would say no. They just need to know how to implement what they are asked to implement. Say you are an engineer working for a gun manufacturer. You need to know how to manufacture the gun. You don't need to know what it is used for or by whom or even how much it is sold for. If you are aware that a crime is going on you in principle are required to report it, but not doing so is not nearly at the same level of crim…

That is a very bad analogy. Guns are not illegal, what people do with them might be. What these developers made had no lawful use. A better analogy would be if some engineers in a gun factory were making chemical weapons.

Re: A software change allowed FTX to use client money

#366

Post by meltedcapacitor »

silasdavis wrote: post #286
meltedcapacitor wrote: post #203

Earlier quoted context omitted.

Crypto is flooded with liquidity so market making is like selling ice to an eskimo. These days a naive market making strategy in crypto just incinerates capital very reliably as the tiny bid ask spread is a small fraction of the adverse selection risk (whole spread moving past). They did probably make money on this in the early days and got smoked when the sophisticated tradfi players joined. Front running large trad…

How is information on order books non public? Usually crypto order books are public APIs.

The order book from the API is at the very minimum delayed (by network and protocol latency if nothing else) and aggregated/sampled (full feed is too big), so an insider can have an advantage of more complete and timely data.

That's for honestly run APIs, then an exchange can play some games with that feed if they want to...

Re: A software change allowed FTX to use client money

#367

Post by beAbU »

galaxyLogic wrote: post #178
CSMastermind wrote: post #167

Earlier quoted context omitted.

I don't know, we hold other engineers responsible for the consequences of their work, personally I think the industry would be better off if we had more accountability for programmers.

But we don't hold the gun-industry accountable for mass-shootings. Maybe we should. But situation is a little bit similar here. The engineer created the gun. He didn't use the software to shoot people. Or maybe he did. The question is did he personally benefit from the change made more than his usual salary? Or think about people who build bridges. They just follow the orders they get from higher ups. Bridge collapse…

If a bridge collapses it's the /engineer/ that's held accountable. Engineers sign off on things. They are accoutable to the product that they build and those that use their product. This guy calls himself a software engineer, so he should accept all the responsibility and accountability that goes with that title.

Your gun analogy is not fair and it does not translate well to the actual situation at hand. A gun engineer is not responsible for all the deaths the weapon causes. But said engineer will be very much accountable if the weapon blows up in the wielder's hands during normal use (even though practically this might not be the case due to liability disclaimers and all that).

We have case studies where deaths were caused by shit software, where the engineer of that wrote the software is clearly the accountable one.

Re: A software change allowed FTX to use client money

#368

Post by imtringued »

tedk-42 wrote: post #37
anon291 wrote: post #27

Earlier quoted context omitted.

People need to understand that money is debt. That is the source of all currency (yes, even gold and other 'hard' currency). If people cannot freely create it, then it's useless. The key is that you ought to be able to gauge the money creator on their trustworthiness, which hopefully you know as a member of a small community. Or, if you are creating money on the open market to large numbers of people, often it's usef…

Money is money. Debt is money from the future. Seems you don't understand.

That is not how debt works, not even in a 100% reserve system.

You are never borrowing from the future. In a 100% reserve system you borrow from other people in the present. If you fail to repay you don't disappoint your future self, you disappoint another person in the present.

In a fractional reserve system loans create both debt and new money and the debt is always an obligation to pay back present money on a fixed schedule.

Re: A software change allowed FTX to use client money

#369

Post by imtringued »

wildrhythms wrote: post #88
0xcde4c3db wrote: post #76

Earlier quoted context omitted.

> Debt is money from the future. By the same token, money is debt from the past. The origins of debt are ultimately material. Alice has a bushel of apples today, but Bob won't have a bushel of oranges until next month. The function of money is to decouple the general function of debt from its material details. In other words, you can have debt without money, but you cannot have money without an underlying debt.

Do you actually believe all of the world's debt can be repaid?

It can be in barter clubs and with demurrage currencies. The problem with debt is that it takes two to pay off debt. The creditor has to spend off their savings at the same rate the debtor pays off their debt.

This type of synchronization requires a negative price signal on money though.

Re: A software change allowed FTX to use client money

#370

Post by imtringued »

__derek__ wrote: post #83
tedk-42 wrote: post #37

Earlier quoted context omitted.

Money is money. Debt is money from the future. Seems you don't understand.

Money is money from the future. If I give you one dollar today, you value it not because you can instantaneously exchange it for a soda, but because you can exchange it for a soda tomorrow.

Technically money isn't bound to a specific period. So you are right. Money exists in the past, present and future simultaneously.
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