Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

We will not pursue the potential acquisition of FTX

twitter.com

Post reply on HN
Print view View original

161–170 of 440 posts

Re: We will not pursue the potential acquisition of FTX

#161

Post by oldgradstudent »

jeffreyrogers wrote: post #141
oldgradstudent wrote: post #76

Earlier quoted context omitted.

Very different. LTCM was making massive, very risky bets while pretending they were safe. They were making insanely leveraged bets on real assets. FTX seems to me to much closer to Madoff. They were printing their own Monopoly money and pretending it was worth billions.

LTCM actually was doing a lot of the risk management people later said they should do. Their problem was the trades they were doing were more crowded than the realized and they couldn't unwind them cheaply because everyone else was doing the same thing. Plus once people realized they were struggling other market participants started betting against them. There have been other similar situations since then. In August…

That's the point. Their models showed their strategies to be safe, while in reality, their strategy was risky enough to bankrupt the fund, and scare the entire financial system.

> In August 2007 most of the big quant funds lost double digit percentages in a few days when someone had to unwind a portfolio and statarb strategies stopped working.

If your strategy works for years and then a single event erases all the historical profits and puts you in the red, your strategy always sucked because it ignored tail events.

Re: We will not pursue the potential acquisition of FTX

#162

Post by taormina »

sytelus wrote: post #44
scottiebarnes wrote: post #25

Earlier quoted context omitted.

The Bitcoin protocol and network continues to operate exactly as expected. Here, people trusted a "bank" (an exchange acting like a bank), and got burned when the bank gambled and lost.

Without exchanges like FTX or Coinbase, how should general public acquire crypto?

What was the point of decentralizing then?

Re: We will not pursue the potential acquisition of FTX

#163

Post by churchill »

Charles Dickens words in, A Tale of Two Cities describes the cryptospace (at least for the past couple of months perfectly):

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only."

Re: We will not pursue the potential acquisition of FTX

#164

Post by lancesells »

lizknope wrote: post #100
bamazizi wrote: post #77

Earlier quoted context omitted.

^this ... The whole space seems like a mirage

It seems like it because it is. No regulations, no protections, only idiots "invest" in this garbage. It's just one scam after another

The only way to make a buck is for someone else to lose a buck. There's nothing else in the exchange here so it's just perverse.

But I wouldn't call people idiots that invest but uninformed and/or desperate and/or uncaring. If someone has an extra $1000 in the bank they think what's the worst that can happen? It's a mistake but you can see how these exchanges are worth billions all of a sudden and the dollars being pulled in to make these billionaires have to come from someone else.

Re: We will not pursue the potential acquisition of FTX

#165

Post by NotYourLawyer »

pseudosavant wrote: post #111
JumpCrisscross wrote: post #13

In 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’…

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

It feels magical, but that part is actually fine. The senior claims on that combined debt really can be pretty high quality. The junior claims are dogshit though.

Re: We will not pursue the potential acquisition of FTX

#166

Post by nullc »

mumbisChungo wrote: post #90
nullc wrote: post #39

Earlier quoted context omitted.

Why do you think a single thing they told the public was ever truthful? It seems naive to me.

I’m not sure what you mean by this exactly. Many of the things they said to the public are not true, but these currencies use permanent, public ledgers, so you can see where the money goes if you look carefully.

How is that particularly relevant? Data isn't knowledge. Just because some assets have public records doesn't really tell you anything about liabilities or underlying ownership.

Exchanges could practice provable solvency ( https://eprint.iacr.org/2015/1008.pdf ), but they aggressively do not-- in part because they don't want to bring customers attention to the potential issue (and they rightfully reason that once customers are concerned no amount of technical solution will likely satisfy them).

But FTX wasn't really an exchange-- it was a scamcoin casino primarily trading in highly leveraged proxy assets ("perpetuals") as a bucketshop.

Re: We will not pursue the potential acquisition of FTX

#168

Post by themagician »

mrtksn wrote: post #92
TheAlchemist wrote: post #53

What's even more funny is that Binance make it look like they are a stable financial institution, and it's thanks to their high standards that they won't acquire FTX. Binance is most probably much more of a fraud than FTX. Binance doesn't even have physical headquarters in any country in this world - and the reason is that they are being actively investigated or banned almost everywhere.

I don't know about it, Binance has become a gold standard in crypto exchange business. Here on HN it was always about Coinbase likely because its an American company but for the rest of the world, it's all about Binance and the rest of the world is huge. How huge? About an order of magnitude to Coinbase. If Binance goes, crypto isn't coming back.

All exchanges suffer the same fate. There is just no reason for exchanges to be solvent. The industry is unregulated and there is too much money to be made. Binace will go. Coinbase will go.

I believe "crypto" will always be around. It's an MLM for the digital age. It will always be nonsense.

Bitcoin, however, I do believe is different.

Re: We will not pursue the potential acquisition of FTX

#169

Post by twblalock »

pavlov wrote: post #70

Why does anyone trust Binance either? They’re notoriously shady about where they operate and what assets they actually hold, to the point that they’re officially not headquartered anywhere. If you have $100k at Binance, is there any reason to believe you could withdraw it tomorrow? Any contract you may have with Binance is made with a local shell company that could just as well be a hot dog stand. Any money you’ve se…

Why did anyone trust FTX either? The trust was really based on the credibility of the person running it, and the fact they had bailed out some other failing exchanges. But there were no hard facts.

In fact it seemed like all it took was a public quarrel with the founder of another exchange to start the ball rolling toward total collapse -- again, because it was all based on personal credibility.

Post reply on HN