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Ftx.com Has Probably Collapsed

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Re: Ftx.com Has Probably Collapsed

#151

Post by hither_shores »

woodruffw wrote: post #134
hither_shores wrote: post #130

Earlier quoted context omitted.

> what precisely has the EA movement done to reduce, even marginally, the risk of a nuclear war? Nothing that I'm aware of. In general I think that most of the current "longtermist" organizations are useless - but that doesn't mean they're incorrect .

Here’s how I think about it: they aren't necessarily incorrect, but they are behaving in a misleading manner by labeling speculative ethical behavior as “EA” when it’s neither effective nor particularly altruistic (in the sense that Singer uses). I don’t belong to the EA movement, so maybe it just isn’t my place to say what should or shouldn’t be EA. But this kind of bootstrapping of classroom ethical dilemmas into a…

> misleading manner by labeling speculative ethical behavior as “EA” when it’s neither effective

I agree that they're ineffective, but I don't see any evidence that the MIRI types are lying - they're trying to help, they think they're helping ... and they're mostly wrong. It happens.

> But this kind of bootstrapping of classroom ethical dilemmas into actually diverting donated money away from human welfare efforts astounds me.

Are you sure that's what's actually going on? Donations and especially effort are not fungible. The techy libertarian futurist types in the MIRI orbit, for instance, are so far as I can tell simply not as bothered by poverty as Singer et al. A world in which they're not worried about AI risk is not a world in which they give just as much to other causes; it's a world in which they give less.

Re: Ftx.com Has Probably Collapsed

#152

Post by Gatsky »

woodruffw wrote: post #145
Gatsky wrote: post #140

Earlier quoted context omitted.

EA and BankmaniFried receive your criticism for trying to do good. Is it really the case that other billionaires who earn their money say selling cigarettes, or helping old ladies gamble their life savings away, or selling vaping kits to children, and spend their ill-begotten gains on expensive champagne and private jets, are somehow better because they are morally consistent ?

What about my comment made you think I’d be okay with any of those things? I think you missed the point about consistency: I was trying to say that EA, minus the recent tangent, has my appreciation for its consistency. Consistency on its own isn’t a moral virtue, but it is a sign of earnestness. And I like it when people are earnest.

I presumed your comment about consistency was regarding the fact that on the one hand EA has at its core applied utilitarian ethics, but on the other hand the greatest source of EA funding is from an apparent charlatan.

Of course I don't think you find other dubious money making activities to be acceptable. I was pointing out that consistency is not a very useful moral yardstick. But since you don't seem to be claiming it as such with your clarification, my comment was unnecessary.

Re: Ftx.com Has Probably Collapsed

#153

Post by paxys »

hailwren wrote: post #41
sillysaurusx wrote: post #23

Does anyone know how Coinbase avoided this fate? I really thought it would be them to fall, but they proved everyone wrong. There’s some key difference between Coinbase and an exchange like FTX. Is it because FTX had a token, and then leveraged themselves using their own token? Binance has a token too. Are they in similar danger? It would be an interesting contrast to know why one exchange is safe vs another. Here’s…

Coinbase avoided this fate by being a us regulated company. FTX.us is still above water. It’s the Bahamas based company that was able to cook the books and is now defunct. As for Binance, they have the SAFU ( https://academy.binance.com/en/glossary/secure-asset-fund-fo... ) which they just topped up to $1B at current market prices (today). You can verify the balances on chain, but there aren’t any statements about ou…

> FTX.us is still above water

I wouldn't be too sure of that. Sequoia just emailed all their LPs saying that they are marking down their investment in FTX.com and FTX US to $0.

Re: Ftx.com Has Probably Collapsed

#154

Post by wmf »

graeme wrote: post #133
RC_ITR wrote: post #33

Earlier quoted context omitted.

Coinbase makes money on fees and doesn’t lend out deposits. Seriously look at their balance sheet! They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. Say what you will about that being a weird/dumb model but here we are.

> They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. US regulated companies can, in fact, go bankrupt, and frequently do. They can also misuse funds or make foolish decisions that cause them to to under even if customers keep using them. There is even have a system for scoring this risk, called the Altman Z score. A good score is above 3. A grey zone score is 1.8-3.0.…

The point is that if Coinbase goes bankrupt their customers will not lose any money because customer assets are segregated from Coinbase's assets.

Re: Ftx.com Has Probably Collapsed

#155

Post by 015a »

matheusmoreira wrote: post #142
015a wrote: post #107

Earlier quoted context omitted.

About 40% of the SAFU is in BNB; their own FTT-like token. Its literally the same reason FTX collapsed; BNB just still has value.

BNB isn't a token though. It's a real cryptocurrency like ETH.

Sure, but the point is that if Binance were ever in a position to where they needed to start liquidating the SAFU, its reasonable to assume that the market for BNB would be in a very poor state; either because of whatever caused them to need to liquidate the SAFU, or because of the liquidation itself. BNB's typical 24h volume is only around 8x the total amount of BNB in the SAFU.

More broadly, the existence of the SAFU should raise eyebrows. If they're acting as a depository trust, in other words maintaining a 100% reserve ratio, then why does the SAFU need to exist? Maybe just marketing? Giving cryptobros something to point at to say "Binance is safe"? I guess that's fine. I don't know; just weird.

Its like, imagine if JP Morgan only dabbled in 0% interest checking accounts, literally just took your money and put it in a box, then said "we've got a billion dollars here to pay out in case we go bankrupt. Half of it is in JP Morgan Stock, that should be fine right?". The situation doesn't make much sense to me, but I may be missing something.

Re: Ftx.com Has Probably Collapsed

#156

Post by RC_ITR »

graeme wrote: post #133
RC_ITR wrote: post #33

Earlier quoted context omitted.

Coinbase makes money on fees and doesn’t lend out deposits. Seriously look at their balance sheet! They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. Say what you will about that being a weird/dumb model but here we are.

> They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. US regulated companies can, in fact, go bankrupt, and frequently do. They can also misuse funds or make foolish decisions that cause them to to under even if customers keep using them. There is even have a system for scoring this risk, called the Altman Z score. A good score is above 3. A grey zone score is 1.8-3.0.…

I don’t want to cite Dunning-Kruger, but Coinbase’s core business model (if you looked at their balance sheet as I suggested) leads to them segregating customer assets from everything else (there’s a special line with a footnote and everything). Those assets line up exactly with the liability line for deposits.

If you’re even a little bit familiar with bankruptcy law, you know that those depositors are the top of the stack (by a mile) and part of the reason Coinbase scores so low on those tests you cite is because the customer deposits get ignored (since they legally can’t touch them).

This is different from A) FTX which lent out those customer deposits irresponsibly and B) Thinking they are a good business whose corporate debt I want to buy.

Like I said in my original comment, that’s a stupid/weird business model that no one else follows because it’s so stupid and weird!

It’s also based on a Ponzi scheme!

But anyway…

Re: Ftx.com Has Probably Collapsed

#157

Post by RC_ITR »

colinmhayes wrote: post #131
RC_ITR wrote: post #33

Earlier quoted context omitted.

Coinbase makes money on fees and doesn’t lend out deposits. Seriously look at their balance sheet! They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. Say what you will about that being a weird/dumb model but here we are.

Coin base doesn’t offer margin loans?

They stopped in 2020.

Like I said, the model is sort of stupid and weird but it’s less stupid than FTX’s at the moment!

Re: Ftx.com Has Probably Collapsed

#158

Post by iseeyou »

wmf wrote: post #154
graeme wrote: post #133

Earlier quoted context omitted.

> They have zero risk of this kind of insolvency, their only risk is people stop using them to trade. US regulated companies can, in fact, go bankrupt, and frequently do. They can also misuse funds or make foolish decisions that cause them to to under even if customers keep using them. There is even have a system for scoring this risk, called the Altman Z score. A good score is above 3. A grey zone score is 1.8-3.0.…

The point is that if Coinbase goes bankrupt their customers will not lose any money because customer assets are segregated from Coinbase's assets.

  Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors
https://finance.yahoo.com/news/coinbase-warns-customers-coul...

Re: Ftx.com Has Probably Collapsed

#159

Post by RC_ITR »

iseeyou wrote: post #158
wmf wrote: post #154

Earlier quoted context omitted.

The point is that if Coinbase goes bankrupt their customers will not lose any money because customer assets are segregated from Coinbase's assets.

Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors https://finance.yahoo.com/news/coinbase-warns-customers-coul...

>may

There’s no precedent. Disclosures are always worst case scenarios

And again, will anyone please read their fucking balance sheet?

Liabilities of $105bn, $101bn which are deposit liabilities vs. $101bn of customer assets.

Even in a worst case scenario depositors get a THIS IS VERY DIFFERENT FROM WHAT FTX DID

Re: Ftx.com Has Probably Collapsed

#160

Post by eru »

adam_arthur wrote: post #25
grensley wrote: post #14

The good times made crazy people look smart and the bad times are making crazy people look like idiots.

Fortunately for investors in public companies, you can mostly sort out the crazy people ahead of time By inspecting the growth mechanism of the company. Amount of leverage, yield on investments relative to risks, assumptions about future growth, management commentary etc. Unfortunately for investors in FTX, they had no visibility or regulations/protections against their deposits being stolen

> Fortunately for investors in public companies, you can mostly sort out the crazy people ahead of time

> By inspecting the growth mechanism of the company. Amount of leverage, yield on investments relative to risks, assumptions about future growth, management commentary etc.

Why waste your time like that? Just buy an index fund.

> Unfortunately for investors in FTX, they had no visibility or regulations/protections against their deposits being stolen

Even more important, short sellers couldn't correct the price, I guess?

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