We will not pursue the potential acquisition of FTX • Hacker News Board

Re: We will not pursue the potential acquisition of FTX

#271

Post by PathOfEclipse » Thu, Nov 10, 2022, 1:48 AM UTC

mscarborough wrote: post #228

PathOfEclipse wrote: post #207

Earlier quoted context omitted.

"Certainly more study is needed on this issue. But the degree to which the Community Reinvestment Act (renewed and strengthened in 1995; see attached chart), the Home Mortgage Disclosure Act and the many other planks of the raft of federal regulation which have built up over the past couple of decades has pushed the banking industry into making the loans for which they are now being criticized is far and away the mos…

Making the subprime loans in the first place doesn't necessitate packing them into opaque financial instruments and going bananas with the wildly over-leveraged profit-seeking. Financial firms has been making tons of money during decades of increasing wealth inequality. Sure, let's talk about these congressional acts, but not going to put a lot of blame on relatively small programs that required these firms to throw…

I'd rather have wealth inequality, which is natural, especially in a world where even the poorest have only gotten richer over time, than have enforced wealth equity, which has resulted in near universal poverty nearly everywhere it's been implemented. People calling for enforced wealth equity don't have the moral high ground. They're in the moral caves and pits!

https://www.investopedia.com/articles/economics/09/financial...

"The seeds of the financial crisis were planted during years of rock-bottom interest rates and loose lending standards that fueled a housing price bubble in the U.S. and elsewhere.

It began, as usual, with good intentions. Faced with the bursting of the dot-com bubble, a series of corporate accounting scandals, and the September 11 terrorist attacks, the Federal Reserve lowered the federal funds rate from 6.5% in May 2000 to 1% in June 2003. 4 5 The aim was to boost the economy by making money available to businesses and consumers at bargain rates. e result was an upward spiral in home prices as borrowers took advantage of the low mortgage rates. 6

Even subprime borrowers, those with poor or no credit history, were able to realize the dream of buying a home. "

The repeated story of our government's behavior in the financial sector is:

1) act with supposedly good intentions

2) Mess everything up

3) Blame the mess on someone else and call for more government action to clean things up.

Re: We will not pursue the potential acquisition of FTX

#272

Post by az226 » Thu, Nov 10, 2022, 1:51 AM UTC

babyshake wrote: post #260

What is so strange about this and seems a bit fishy is how quickly this has all happened. How has Binance decided in about 24 hours to not do the deal? With other deals of this type, this process typically takes weeks if not months. Any insights?

CZ is playing 4D chess. FTX goes down and customers flee to Binance. Why pay for something that will be free? Or pay pennies on pennies on the dollar in bankruptcy court where nobody will be bidding except maybe with a 10-foot pole.

Re: We will not pursue the potential acquisition of FTX

#273

Post by TheAlchemist » Thu, Nov 10, 2022, 1:58 AM UTC

miohtama wrote: post #258

polygamous_bat wrote: post #244

Earlier quoted context omitted.

Ah, if only that were true! Your claim smelled funny, so I looked it up: https://paxos.com/2022/04/07/busd-issued-by-paxos-on-ethereu... Tl;Dr: Paxos issues something called BUSD on Ethereum, which is regulated. Binance issues something that's kinda sorta related but not really, that's fully unregulated , only usable in their private chain, ALSO called BUSD, that is just monopoly money. They happen to have the same n…

Thank you for your smell comment. I am a nerd with bad hygiene, but people do not bring it up that often. Binance pegged USD is not printed out of thin air. It is a bridged token from Ethereum to other blockchains. Because how smart contracts work, Binance cannot manipulate Binance pegged USD supply unless they seriously break BNB Chain. You can verify the reserves and bridges here: https://www.binance.com/en/assets-…

"The reason why Paxos do not directly issue tokens on other chains is that they 1) likely do not have infrastructure for it yet 2) they are limited by commercial agreements or agreements with a regulator."

Yet ? We are talking multiple tens of Billions of $ and supposedly they don't have infrastructure YET ?

I don't know anything about the coin itself, but all of this sure smells like the small print that some will find very relevant when the time comes.

Re: We will not pursue the potential acquisition of FTX

#274

Post by funstuff007 » Thu, Nov 10, 2022, 2:01 AM UTC

naveen99 wrote: post #127

mrtksn wrote: post #92

Earlier quoted context omitted.

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.

mtgox was bigger too. There are other reasons for a crypto winter like high interest rates and a newly credible us central bank. Rest of the world is not bigger when it comes to non residential real estate: private equity, venture, tech, finance.

speaking of mtgox, where's a good place to sell my MtG cards now?

Re: We will not pursue the potential acquisition of FTX

#275

Post by netheril96 » Thu, Nov 10, 2022, 2:10 AM UTC

melenaboija wrote: post #178

mrtksn wrote: post #92

Earlier quoted context omitted.

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.

> If Binance goes, crypto isn't coming back Interesting statement for a decentralized asset

It’s interesting because it is wrong. MtGox had far larger dominance in crypto trading than Binance, flopped significantly, and it didn’t prevent crypto from coming back.

Re: We will not pursue the potential acquisition of FTX

#276

Post by memish » Thu, Nov 10, 2022, 2:17 AM UTC

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.

Get ready to have your mind blown. Watch this

https://twitter.com/HaloCrypto/status/1590417311839981569

Re: We will not pursue the potential acquisition of FTX

#277

Post by cactusplant7374 » Thu, Nov 10, 2022, 2:18 AM UTC

grey-area wrote: post #72

It would be amusing if this deliberate attack by Binance also caused other frauds like Tether and eventually Binance to collapse too. People will simply lose faith in crypto entirely and avoid the whole market.

Binance lost a lot of money on Luna. They are being cautious.

Re: We will not pursue the potential acquisition of FTX

#278

Post by chollida1 » Thu, Nov 10, 2022, 2:21 AM UTC

vgatherps wrote: post #242

Sbf could have printed money if he didn’t get so greedy. Maybe ftx would have been a top 10 exchange, instead of the third largest. Maybe alameda would have been a standard successful prop shop (though they were really struggling as trading got more competitive). He would have just been worth a few billion. But here we are now. I have a lot of friends on the inside and nobody knew at all. These friends knowingly kept…

How are you aware of how profitable alemedas trading was?

I haven’t seen any data on it

Re: We will not pursue the potential acquisition of FTX

#279

Post by netheril96 » Thu, Nov 10, 2022, 2:23 AM UTC

cellis wrote: post #86

mumbisChungo wrote: post #23

The silly thing is that FTX was a money printing machine. There was no reason to start gambling with user funds, aside from greed, hubris, and stupidity. Similarly, Sam's fund Alameda was delta-neutral until some time in 2021, which is something that also could have profitably continued in perpetuity, but they got greedy and started making directional bets with leverage.

There’s a Bloomberg article that goes over why this is a bit more nuanced than “gambling with customers funds”. In short, it’s either one or both of poor risk management ( margin traders can’t post collateral and the collateral they had was FTT which went to zero ) and black swan bank runs ( Binance CEO tweets about risky FTT causing bank run causing further drops ). In fact “gambling with customer funds” was by desi…

Bank runs are wrong for exchanges. They never should have fractional reserves.

And derivative trading shouldn’t be based on lending out customer funds. The exchange should lend out their own funds. They charge a lot of interest for the leverage, and they don’t even take the risk on their own money?

Re: We will not pursue the potential acquisition of FTX

#280

Post by ausudhz » Thu, Nov 10, 2022, 2:24 AM UTC

TheOtherHobbes wrote: post #213

mrtksn wrote: post #200

Earlier quoted context omitted.

That's just the label, nothing decentralised is left. See, as it turns out, to trade you need to find people and people are found in central locations. Okay, there are still many exchanges but this is mostly incidental and it makes sense to end up with single exchange eventually.

I'm enjoying the irony that practical crypto could not possibly be less like an decentralised peer-to-peer system for exchanging value if it tried to be. As you soon as someone creates an exchange - and especially as soon as they start packaging funds into absolutely any kind of financial instrument/service - they've effectively reinvented deregulated banking with no deposit protection and extra risk.

and additionally who run these exchange has no economical background whatsoever. Like an ignorant trying to reinvent the wheel into a squared one and poaching it as a new invention.

But is "decentralized"...