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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#211

Post by efficax »

bboygravity wrote: post #100
grey-area wrote: post #59

Earlier quoted context omitted.

The story is the same for all these other giants of crypto. Binance, Tether, Bitfinex are all basing their purported asset value on holdings of multiple worthless currencies, many of which they mint and price themselves.

Interesting to see that you and many others think that "the real financial world" works significantly differently. Countries, (central) banks, family funds and hedge funds are about to fail (or are already failing) in a very similar way but on a much much grander scale.

the real financial world really does work differently. even bizarre instruments like credit default swaps are rooted in an asset of real value (homes). stocks, bonds, real estate, these are all connected to things that have value or produce value, corporations, governments, land. crypto tokens are pure speculative assets that have value only so long as you can get suckers to buy them. they’re effectively really incredible counterfeits, that will be instantly worthless the moment the moment enough people realize that the sucker pool has run dry

Re: FTX balance sheet, revealed

#212

Post by jrochkind1 »

kibwen wrote: post #191
imtringued wrote: post #153

Earlier quoted context omitted.

If it has no way to wind down to zero it is a Ponzi scheme. Yes the USD and other fiat currencies are partially ponzi schemes as well but only the store of value part.

This is diluting the definition of "ponzi scheme" to the point of uselessness. State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. That's not a ponzi scheme, because the value of the cur…

I believe there isn't a lot of historical evidence that state-backed currencies emerged to deal with undesirable aspects of barter. That's pretty much just a myth people decided made sense, rather than something that happened in history.

We mostly don't know why money/currency came into existence, it happened so long ago.

There is some evidence that at least in some places it was to fund armies or generally provide more state (or pre-state ruler) control of the economy.

I don't really know what impact that has on whatever argument you're having, but anyway.

Re: FTX balance sheet, revealed

#213

Post by SilasX »

dwater wrote: post #208
SilasX wrote: post #157

Earlier quoted context omitted.

Thank you! That’s been a big pet peeve of mine in this discussion, where people casually throw around “illiquid” when the currency is really “liquid but collapsed in value”, which is what was going on with FTT and SOL. Earlier comment: https://news.ycombinator.com/item?id=33539326

“Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.” https://www.investopedia.com/terms/l/liquidity.asp You have misunderstood the meaning of liquid.

No, I didn’t. Read the linked comment and its follow-up.

Of course it’s a valid concept. But people hastily use it as a drop in replacement for any situation in which they would like more money for any reason, and to blur the difference between illiquidity and insolvency. Just like in the situation the parent described!

In the case of FTX, the value of their cryptos had already fallen, and they would take that haircut even if given extensive time to make that sale.

There was nothing that would make the cash flows match.

Re: FTX balance sheet, revealed

#214

Post by tootie »

tasubotadas wrote: post #144

I am quite surprised that nobody is talking about VCs (Sequoia) that happily poured money into this. What was their plan? Were they blind? Were they hoping to cash out before it crashed? Major investors usually get full visibility into the company.

Sequoia must be utterly humiliated by this. They didn't just give him a ton of money, they promoted him like he was messiah of finance.

https://twitter.com/philbak1/status/1591409852957732864?s=20...

Re: FTX balance sheet, revealed

#215

Post by odiroot »

wumpus wrote: post #37
Shank wrote: post #17

The "before this week" column seems to be attempting to draw sympathy by saying "but everything was fine before, seriously!" when in reality it just proved that, even in the best of worlds, they had an extremely optimistic view of the entire crypto ecosystem, including its liquidity. I can't believe they seriously held that much of their total value in their own issued token. That's just preposterous. Imagine if JP M…

Remember the Wirecard collapse, where there was a fake bank account in the Phillipines that allegedly had $2.1 billion USD in it? This is the crypto equivalent.

I wonder if (some of) SEC will play the same role in this story as BaFin played in Wirecard's.

Re: FTX balance sheet, revealed

#216

Post by davemp »

jrochkind1 wrote: post #212
kibwen wrote: post #191

Earlier quoted context omitted.

This is diluting the definition of "ponzi scheme" to the point of uselessness. State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. That's not a ponzi scheme, because the value of the cur…

I believe there isn't a lot of historical evidence that state-backed currencies emerged to deal with undesirable aspects of barter. That's pretty much just a myth people decided made sense, rather than something that happened in history. We mostly don't know why money/currency came into existence, it happened so long ago. There is some evidence that at least in some places it was to fund armies or generally provide m…

There may not be historical evidence, but first principles tell me that most people prefer cash to trading pelts for groceries every week.

Re: FTX balance sheet, revealed

#217

Post by thiscatis »

tasubotadas wrote: post #144

I am quite surprised that nobody is talking about VCs (Sequoia) that happily poured money into this. What was their plan? Were they blind? Were they hoping to cash out before it crashed? Major investors usually get full visibility into the company.

Not just Sequoia but also Temasek, the Singapore gov’t fund and they’re keeping quiet about it since the binance bailout fell apart.

Re: FTX balance sheet, revealed

#218

Post by usrusr »

rkagerer wrote: post #72
mudrockbestgirl wrote: post #46

Earlier quoted context omitted.

I don't know about FTX, but Binance has been shady from the very beginning. They got large quickly because they listed all kinds of **coins, had negative trading fee promotions, and in general did lots of shady growth hacking marketing tactics and partnerships. If you wanted to gamble altcoins, those would be on Binance, but not listed on Coinbase. That was many years ago when they started out of course. I'm curious…

I guess it goes to show even in the face of all the scams there remains a massive appetite for [seemingly] legit markets to buy/sell coins. Boggles my mind these idiots can't simply be satisfied to run a profitable, lawful operation.

Chances are those satisfied people exist, but you never hear of them because they never left bootstrapping territory. Honesty, modesty and getting investment, you can pick at most two. Because telling a would-be investor "I'll be happy breaking even" is equivalent to openly announcing that you'll steal their money.

Re: FTX balance sheet, revealed

#219

Post by kolbe »

bmitc wrote: post #117
irusensei wrote: post #105

The whole thing that is bugging me is that they made big political donations to both D and R. They use the money they conjured out of thin air and backed politicians with it. They probably backed the politicians who were most friendly to them. Those politicians might have won and that dirty money might have done a difference. Does that sound moral to you? I think it’s absolutely terrifying. Every candidate that recei…

I think all political donations above a certain level should be scrutinized and audited and then banned at higher levels. But I don’t think the politicians care. They removed the limits to political donations and haven’t looked back, and it has been chaos ever since. I was disturbed by Robert Mercer’s dastardly part in the 2016 election, both his donations, his people placing, and his technical consulting. The guy is…

No post body was provided.

Re: FTX balance sheet, revealed

#220

Post by paulusthe »

pakitan wrote: post #75
Shank wrote: post #17

The "before this week" column seems to be attempting to draw sympathy by saying "but everything was fine before, seriously!" when in reality it just proved that, even in the best of worlds, they had an extremely optimistic view of the entire crypto ecosystem, including its liquidity. I can't believe they seriously held that much of their total value in their own issued token. That's just preposterous. Imagine if JP M…

He's also being purposefully obtuse about his 2 largest regrets - the "poorly labeled" account and underestimating the size of the withdrawals. He's still behaving as if having billions of liabilities in real money backed by funny money "assets" is somehow acceptable and everything would have been fine if it wasn't for the "last week".

As if poor labeling results in $8bn of customer funds being lent to the CEO's hedge fund
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