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FTX creditors will make money on bankruptcy

cnbc.com

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Re: FTX creditors will make money on bankruptcy

#71

Post by paulpauper »

kwar13 wrote: post #57

I keep seeing this "headline" and it is the very definition of fake news. If you held SOL on FTX they will pay you at the Nov 2022 prices which was under 9 per SOL. It is trading at ~150 now. Bitcoin was trading at 17k, it is now 62k. FTX creditors didn't hold US dollars. They held crypto. A good chunk didn't even buy any of the crypto WITH US dollars. Many are in countries that US dollars is not legal tender. Guess…

But what if bitcoin crashed even more. Then it would not seem like such a bad deal to get dollars.

Re: FTX creditors will make money on bankruptcy

#72

Post by paulpauper »

jjeaff wrote: post #20
eftychis wrote: post #17

The statement is misleading. People are making 18% interest on the value of Bitcoin et al. at the value of 2022, which is less than $20k. Now that is $60k, back to the value levels of 2021. Thus, the only reason there is interest is that the cryptocurrencies found gained back their value, and the bankruptcy court gets to consider the values when the bankruptcy started in 2022, not current/before 2022 values.

Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.

As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.

Re: FTX creditors will make money on bankruptcy

#73

Post by paulpauper »

eftychis wrote: post #17

The statement is misleading. People are making 18% interest on the value of Bitcoin et al. at the value of 2022, which is less than $20k. Now that is $60k, back to the value levels of 2021. Thus, the only reason there is interest is that the cryptocurrencies found gained back their value, and the bankruptcy court gets to consider the values when the bankruptcy started in 2022, not current/before 2022 values.

What if Bitcoin had fallen to $4k or something. then converting to cash would in hindsight seemed brilliant and creditors would be happy.

Re: FTX creditors will make money on bankruptcy

#74

Post by paulpauper »

linotype wrote: post #2

The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade. https://www.youtube.com/watch?v=TPFiRlZaclQ

Yeah, SBF was not lying about FTX having the money. It was not totally worthless as many had assumed. it shows how someone can be dishonest in some ways but honest in others. I too thought he was telling the truth. Had FTX not had money, he would have just shut up. I think such a long sentence may have been a miscarriage of justice in this regard.

Re: FTX creditors will make money on bankruptcy

#75

Post by JumpCrisscross »

paulpauper wrote: post #72
jjeaff wrote: post #20

Earlier quoted context omitted.

Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.

As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.

> he was technically not lying about FTX having the money

They didn't have the money. These gains are due to appreciation.

Re: FTX creditors will make money on bankruptcy

#76

Post by JumpCrisscross »

manquer wrote: post #26
jjeaff wrote: post #20

Earlier quoted context omitted.

Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.

FTX invested $500M in Anthropic for 8% (at the time) and the bankruptcy estate sold 2/3rds of that for $884M, while it is tidy sum, it doesn't move the needle much in the overall money owed to creditors of $11.2B . The estate has recovered around $16B of the money, or basically close to half of the assets at the time, the bulk of the money is coming from bitcoin tripling in value, to put it another way if Bitcoin was…

> bulk of the money is coming from bitcoin tripling in value

Source? I thought FTX's estate barely held any crypto.

Re: FTX creditors will make money on bankruptcy

#77

Post by JumpCrisscross »

helsinkiandrew wrote: post #62
Analemma_ wrote: post #6

Earlier quoted context omitted.

That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail even if you happen to hit and be able to return what you took.

> That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail. But, if the investments hadn't hadn't gone bad and FTX hadn't run out of money, it's probable that no one would have known that he had stolen/borrowed customer money. The same probably goes for Elizabeth Holmes/Theranos and Nick Leeson/Barings Bank - its only when things go wrong…

> its only when things go wrong that misdeeds are found

Counterpoint: Shkreli.

Re: FTX creditors will make money on bankruptcy

#78

Post by kwar13 »

graeme wrote: post #68
kwar13 wrote: post #65

Earlier quoted context omitted.

Not really. You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work. Why US Dollars? FTX.us was domiciled in the US but FTX.com was in Bahamas. Why not some other arbitrary currency? Why not Bahamian dollar? Why not in Bitcoin? FTX has paid close to 1 billion dollars in fees to army of lawyers, consultants, bankers etc. in what was even at the time an 8 billion…

>You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work. The company went bankrupt. Bankrupt. They did not have the assets they purported to have. FTX owed money to a variety of creditors including to crypto traders who deposited. They gambled on handing over their assets to a largely unregulated entity and it went bust. If a regulated securties broker goes ba…

I think you are not distinguishing between what a bankruptcy vs. theft means. I worked over a decade in investment banking including on large bankruptcy proceedings.

A bank can go bankrupt and your deposits might be in jeopardy, because there is fractional reserve banking and by law they are allowed to hold far less (in the US it would actually be 0%) of your deposits and can deny your request to redeem your assets in full in cash. That is to prevent bank runs.

FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts. FTX stole from customers and used the fund to front run their own customer via Alameda research.

Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance.

For the record, FTX.us was a registered broker.

https://brokercheck.finra.org/firm/summary/158816

And with SEC as an exempt broker.

https://www.sec.gov/Archives/edgar/data/1876386/000187638621...

Re: FTX creditors will make money on bankruptcy

#79

Post by JumpCrisscross »

Scoundreller wrote: post #44
flomo wrote: post #42

Earlier quoted context omitted.

[flagged]

From a public policy standpoint, you don't want local government authorities taking a quick buck now instead of (on average) more money a few years later. But to an elected politician that might not even be in office in a few years, money now is worth more at any cost than money later. A gov agency is best suited to ride these things out because their cost of capital is among the lowest. Generally dumb for a county t…

> gov agency is best suited to ride these things out because their cost of capital is among the lowest

Municipalities have a higher borrowing cost then the Treasury, though it's still relatively low.

Re: FTX creditors will make money on bankruptcy

#80

Post by paulpauper »

JumpCrisscross wrote: post #75
paulpauper wrote: post #72

Earlier quoted context omitted.

As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.

> he was technically not lying about FTX having the money They didn't have the money. These gains are due to appreciation.

as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered

https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f...

Anthropic was another $1 billion

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