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FTX creditors will make money on bankruptcy

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Re: FTX creditors will make money on bankruptcy

#111

Post by manquer »

JumpCrisscross wrote: post #76
manquer wrote: post #26

Earlier quoted context omitted.

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.

They barely held any bitcoin or ether in their assets 0.1% and 1.2% respectively that customers had bought or deposited on the platform, they did hold a lot of crypto assets though.

Notably SOL sales accounted for close to half of recovered money here is a link to the last batch of $2.6B sale they made in May 2024 (https://dailycoin.com/ftx-estate-sells-last-2-6b-of-heavily-...)

There was controversy from creditors over the steep discount, a discount itself is not unusual given the size of the block sale and the fact the tokens are locked for 4 years with monthly vesting. Naturally there was dispute on how much discount is acceptable .

while Solona has grown 10x in price since the bankruptcy, it is not like people who had deposited SOL tokens are now covering for other deposits with just their holdings.

What depositors assets had against their accounts at the time had little correlation to what FTX itself had as assets, the two most popular tokens Bitcoin (0.1%) ETH(1.2%) assets were lot less than what they would have been just storing the customer tokens as is.

It is simpler to talk in bitcoin price given its popularity and use as baseline rather than prices of tokens and assets actually held by FTX itself or by users on FTX.

Re: FTX creditors will make money on bankruptcy

#112

Post by Sakos »

norswap wrote: post #87
KoolKat23 wrote: post #58

Earlier quoted context omitted.

I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.

I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article. The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything). - If you bought Bitcoin above 20k, you lost money, w…

This is such a bad faith argument.

Imagine you put up your house as an investment into some crypto exchange and the exchange goes bankrupt because it turns out they're misusing customer funds and defrauding their customers. You'll get your house back when legal proceedings are done. What value that house has before or after is sort of irrelevant except as a way for you to twist the issue to fit your narrative. Nobody made you put up your house in some nonsense crypto exchange. That was you.

Be glad the government is involved at all or you might not be getting anything back.

Re: FTX creditors will make money on bankruptcy

#113

Post by sobellian »

KoolKat23 wrote: post #58
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.

I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.

During sentencing, SBF attempted to argue that creditors had experienced "zero harm" as even then it was apparent FTX would be able to pay them back. John Ray himself rebutted that argument: https://www.courtlistener.com/docket/66631292/415/united-sta....

> And even taking into account the potential for achieving anticipated recovery levels, which is by no means assured, customers still will never be in the same position they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of “altruism.”

The opportunity cost is real and cannot be ignored.

Re: FTX creditors will make money on bankruptcy

#114

Post by marcuskane2 »

arduanika wrote: post #39
FreeTrade wrote: post #36

Earlier quoted context omitted.

I'm seeing a pattern of misleading headlines wrt this. My guess is that it is PR at work to convince public that FTX was a victimless crime - this is to help SBF avoid his full sentence.

There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops. But sitting here, we can't really k…

Or, it's just kinda and interesting story on it's own, no crazy conspiracy theories needed?

When Bernie Madoff or Enron or any of the other major headline-grabbing frauds fell apart, the victims generally got back almost nothing. The fact that FTX is returning all of the user's money, plus interest, is quite unique and newsworthy.

Re: FTX creditors will make money on bankruptcy

#115

Post by jimmydddd »

marcuskane2 wrote: post #114
arduanika wrote: post #39

Earlier quoted context omitted.

There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops. But sitting here, we can't really k…

Or, it's just kinda and interesting story on it's own, no crazy conspiracy theories needed? When Bernie Madoff or Enron or any of the other major headline-grabbing frauds fell apart, the victims generally got back almost nothing. The fact that FTX is returning all of the user's money, plus interest, is quite unique and newsworthy.

But it's not really "all of their money." That's just the way the news is spinning it. I think that's the point folks are discussing.

Re: FTX creditors will make money on bankruptcy

#117

Post by Scoundreller »

s1artibartfast wrote: post #53
Scoundreller wrote: post #50

Earlier quoted context omitted.

The overarching question is: why should the County have thought the hedge funds are overpaying for the claim and to take the money and run? Usually when you have several suitors that purely have profit in mind, you're the mark. Doubly so when their cost of capital is higher than your own. > to allocate expensive legal resources in chase of speculative claims On a claim this big, the bankruptcy trustee takes care of t…

They don't have to be overpaying. It was a win win. The way I read it the county got more money this way than if they held it. They they sold the stake ultimately worth 17 million, but they got their rights back, which they resold for 16 million. As long as they sold their stake for 1 million or more, they are in the green.

The rights were back to them at the time of default. It was independent of the claim sale.

(They won on the reselling of the naming rights too by leasing them out for more per year than ftx)

Re: FTX creditors will make money on bankruptcy

#118

Post by jimmydddd »

Sakos wrote: post #112
norswap wrote: post #87

Earlier quoted context omitted.

I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article. The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything). - If you bought Bitcoin above 20k, you lost money, w…

This is such a bad faith argument. Imagine you put up your house as an investment into some crypto exchange and the exchange goes bankrupt because it turns out they're misusing customer funds and defrauding their customers. You'll get your house back when legal proceedings are done. What value that house has before or after is sort of irrelevant except as a way for you to twist the issue to fit your narrative. Nobody…

But what if instead of getting your house back, you're only getting the cash equivalent of what your house was worth THEN, plus some interest. Meanwhile, your house, which you no longer own, has tripled in value.

Re: FTX creditors will make money on bankruptcy

#119

Post by Scoundreller »

marcuskane2 wrote: post #114
arduanika wrote: post #39

Earlier quoted context omitted.

There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops. But sitting here, we can't really k…

Or, it's just kinda and interesting story on it's own, no crazy conspiracy theories needed? When Bernie Madoff or Enron or any of the other major headline-grabbing frauds fell apart, the victims generally got back almost nothing. The fact that FTX is returning all of the user's money, plus interest, is quite unique and newsworthy.

Madoff is kinda like an FTX: on average, everyone has received 72% of their “investment” back. But there was some rule about everyone getting their first $1m or something back 100%.

Funny thing about madoff is that it is still ongoing, distributions have diminished but last one was this year: https://www.madofftrustee.com/index.php?mobile=false

Where madoff is a bit different is that they were more aggressive in taking money back that people took out. You’re really only getting back what you put in (and obvious losses through time value of money).

And madoff didn’t gamble with the money, he mostly just sat on it.

Re: FTX creditors will make money on bankruptcy

#120

Post by KoolKat23 »

sobellian wrote: post #113
KoolKat23 wrote: post #58

Earlier quoted context omitted.

I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.

During sentencing, SBF attempted to argue that creditors had experienced "zero harm" as even then it was apparent FTX would be able to pay them back. John Ray himself rebutted that argument: https://www.courtlistener.com/docket/66631292/415/united-sta... . > And even taking into account the potential for achieving anticipated recovery levels, which is by no means assured, customers still will never be in the same pos…

I'm not arguing that, it doesn't change the fact that a crime occured.

I'm just saying the title is not misleading.

They mentioned it is bankrupt and by definition creditor rights are curtailed.

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