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FTX held less than $1B in liquid assets against $9B in liabilities

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Re: FTX held less than $1B in liquid assets against $9B in liabilities

#141

Post by fullsend »

pigtailgirl wrote: post #123
Animats wrote: post #86

So now we see some numbers. Notes: Bankman-Fried personally seems to own, indirectly, about $472M (paid over $600M, so that was a loss) worth of Robinhood Financial.[1] Other documents provided to investors say that FTX US, Bankman-Fried’s onshore exchange, held $115mn of cash. Of that sum, $48mn was listed as corresponding to customer US dollar balances of $60mn. So there might be enough cash to pay off customer cas…

-- a 30 year old personally has $600MM to invest in a single company? - his startup was founded in 2019 - that was crazy comp structure he had? - he comes from money? - or..? --

Already the world of founders, funding, and venture capital is full of incestuous relationships and shady dealings. I can’t imagine what happens when you combine that kind of capital with the utter shamelessness and obtuse financial engineering of the cryptocurrency space.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#142

Post by cbHXBY1D »

oldstrangers wrote: post #108

8 months ago I commented "Anyone else oddly skeptical of FTX? They seemingly came out of no where with ungodly amounts of money, and began slapping their name on anything and everything." Glad my BS detector works I guess.

I told my dad over a year ago that FTX buying stadium naming rights for a bunch of sports leagues (including one of our hometown teams) was like if there had been an Enron Stadium in 2000.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#143

Post by greenyoda »

cbHXBY1D wrote: post #142
oldstrangers wrote: post #108

8 months ago I commented "Anyone else oddly skeptical of FTX? They seemingly came out of no where with ungodly amounts of money, and began slapping their name on anything and everything." Glad my BS detector works I guess.

I told my dad over a year ago that FTX buying stadium naming rights for a bunch of sports leagues (including one of our hometown teams) was like if there had been an Enron Stadium in 2000.

> if there had been an Enron Stadium in 2000

There actually was an Enron Field in Houston in 2000:

> Minute Maid Park, previously named The Ballpark at Union Station, Enron Field, and Astros Field, is a retractable roof stadium in Downtown Houston, Texas, United States. It opened in 2000 as the home ballpark of Major League Baseball's Houston Astros.[1]

(It was named "Enron Field" from 2000 to 2002.)

[1] https://en.wikipedia.org/wiki/Minute_Maid_Park

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#144

Post by fullsend »

celestialcheese wrote: post #110

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

The words of Andrew Lahde (who closed his hedge fund up 800% after betting against investment banks in 2008) continue to be not just insightful but downright educational.

"I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America."

The lesson is that just because you work for a16z, or Goldman Sachs, or McKinsey, doesn’t mean anything. In fact you’re probably more dumb than average because you’ve been trained to see things a certain way. Not only are they not our best and brightest, they are in fact the “low hanging fruit”.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#145

Post by onphonenow »

celestialcheese wrote: post #121
ttul wrote: post #116

Earlier quoted context omitted.

My guess is that either FTX did not furnish them with accurate or truthful information, or the information was correct at the time, but the lack of good governance allowed FTX to pursue some rotten strategies without the knowledge of their investors. It would not be the first time that otherwise smart people have made a bad call.

The timing of the big investments back in Oct '21 for their Series B and Jan '22 for Series C makes your guess seem likely. Seems like most of the actual fraud started after the 3AC/TerraLuna blowup as SBF trying to trade out of the hole he was in.

I’m slightly curious if Sam had a personal relationship with someone at alameda? He took a pretty straightforward way to make money (charge fees running an exchange) and then looks to have dumped money into an absolute black whole of illiquidity and stupidity at alameda which was run by Caroline ? Even if alameda was making smart seed round investments- the liquidity horizons make no sense for an exchange to be part of that!

I can imagine alameda being burnt by 3ac - just wrap things up there if needed?

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#146

Post by FerociousTimes »

smt88 wrote: post #129
celestialcheese wrote: post #110

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

We all asked the same quesrions after Theranos. Silicon Valley VC is a relationship business run by idiots who just follow the leader. They admitted they didn't do much diligence into Theranos, and they obviously didn't do it here either.

Yeah you're right, FOMO and the bandwagon effect are at play here.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#147

Post by greenyoda »

fullsend wrote: post #144
celestialcheese wrote: post #110

How the fuck did all these high-profile investors miss this. NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. These aren't schleps in this list. Blackrock, Sequoia, Tiger, Lightspeed, the fucking NEA. Jesus. Did no one…

The words of Andrew Lahde (who closed his hedge fund up 800% after betting against investment banks in 2008) continue to be not just insightful but downright educational. "I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or sup…

The rest of Lahde's goodbye letter is also interesting, and can be found here in its entirety: https://web.archive.org/web/20081019183111/http://ftalphavil...

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#148

Post by smeej »

JonathanBeuys wrote: post #95
smeej wrote: post #92

Earlier quoted context omitted.

You don't use 3rd party software to generate the wallet. Electrum, Specter, or another FOSS app can do it fine. The keys have 3rd-party software, but all they do is sign. Don't have a quorum from the same manufacturer. If it takes 3 signatures of 5, don't use 3 from the same company.

That's what I mean with 3rd party software. If you use Electrum, you are hoping that Electrum is not buggy or malicious.

It's open-source. Read the code. You don't have to trust anybody.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#149

Post by smeej »

JonathanBeuys wrote: post #103
smeej wrote: post #98

Earlier quoted context omitted.

I don't want to be rude, but you're not the only smart person who's thought of counterparty risks. There's tremendous incentive to all sorts of people to break the cryptographic security that secures these networks. And, thus, also incentive to stay ahead of those people.

I'm not very worried about the cryptographic security of the Bitcoin blockchain. I am worried that in 5 years we will learn that some hardware wallets used side channels to transfer bits of your private key out to make it easier to guess for someone who worked at the manufacturer.

But you can check this. You can monitor whether info is leaving on other channels. And you can sign on an air-gapped computer and transfer only the signed transaction hash (never the privkey) to a connected one to broadcast. You can do all but the actual signature with open source tools.

Just because you haven't taken the time to learn how this stuff works doesn't mean there aren't thousands of incredibly intelligent people who have been working on it for a decade and have actually solved the low-level concerns you have.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#150

Post by smeej »

JonathanBeuys wrote: post #99
smeej wrote: post #94

Earlier quoted context omitted.

They don't need to. Multisig is built directly into the protocol for BTC. Search BTC multisig and you can learn all about it.

I know Bitcoin multisigs. But nobody is creating them with pencil and paper.

I don't know what that comment was about. That would be a weird way to do it. I don't know why anyone would want to.
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