The Wall Street Journal in its report quoted Binance as saying: "Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help."
Big if true
We will not pursue the potential acquisition of FTX
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Re: We will not pursue the potential acquisition of FTX
#12Why would they buy a government sponsored ponzi scheme
Congrats on Binance for dodging the bullet
Re: We will not pursue the potential acquisition of FTX
#13In the thick of it, illiquidity and insolvency blur. But not after the fact.
As usual, Levine put it best: “the problem is not a timing mismatch, in which FTX’s customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. The problem is that FTX took its customers’ money and traded it for a pile of magic beans, and now the beans are worthless and there’s a huge hole in the balance sheet” [1].
Before one is insolvent, illiquidity and insolvency are circular questions of asset value. After the fact, it shouldn’t take someone more than a few minutes to come to a conclusion. (There is a deeper discussion on the folly of accepting as collateral assets correlated with confidence in oneself. I recommend reading the article.)
[1] https://www.bloomberg.com/opinion/articles/2022-11-09/bankma...
Re: We will not pursue the potential acquisition of FTX
#14The Wall Street Journal in its report quoted Binance as saying: "Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help." Big if true
That quote comes literally from the tweet linked in this post
Re: We will not pursue the potential acquisition of FTX
#15https://www.bloomberg.com/news/articles/2022-11-09/binance-s... Estimated 6 Billion USD of a hole on the FTX side.
Does this number match the debt on Alameda's balance sheet?
Re: We will not pursue the potential acquisition of FTX
#16Extremely interesting to see how this will end. IIRC, Alameda research had a huge position in FTT which will presumably go under now.
Their website has been taken down (marked private): https://www.alameda-research.com/
Re: We will not pursue the potential acquisition of FTX
#17Previous related thread, now pushed down the stack:
FTX’s financial black hole leaves Binance balking at rescue plan - https://news.ycombinator.com/item?id=33535161 - Nov 2022 (353 comments)
Re: We will not pursue the potential acquisition of FTX
#18Why would they buy a government sponsored ponzi scheme Congrats on Binance for dodging the bullet
Independent ponzi schemes FTW!
Re: We will not pursue the potential acquisition of FTX
#19Maybe people will finally get some sense and stop storing their wealth in digital currency that is backed by absolutely nothing. I think a lot of dominoes are about to fall in the crypto world
An exchange explodes almost every year. I doubt anything substantial has changed. In fact, binance looks better than ever.
Re: We will not pursue the potential acquisition of FTX
#20Maybe people will finally get some sense and stop storing their wealth in digital currency that is backed by absolutely nothing. I think a lot of dominoes are about to fall in the crypto world
What backs this?
https://fred.stlouisfed.org/series/M2SL
Might of USA and all that? Yes I’ve heard all that before. Rome, France, England…
https://en.wikipedia.org/wiki/Debasement
https://en.wikipedia.org/wiki/Assignat
https://en.wikipedia.org/wiki/The_Great_Debasement
History is more on the side of it happening than not.
“The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” -Satoshi Nakamoto