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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#291

Post by lend000 »

largepeepee wrote: post #268
kranke155 wrote: post #224

Earlier quoted context omitted.

FTX pretended to be that but they were based in the Bahamas. Also Kraken has verifiable proof of reserves. Kraken and FTX/Binance are essentially not even in the same business (Binance is almost certainly quasi criminal or dodgy if not worse).

FTX.US is based in the US and that didn't solve the fundamental issue of manhandling funds. KYC didn't stop anything, the fraud was internal. If proof of reserves was enough for you then Binance is on the same level as Kraken. It does sound a little hypocritical if you hold them to different standards if that was your issue. From my understanding Binance took a more DeFi route while FTX/Coinbase were pushing for CeFi…

Nobody is saying KYC is a guarantee, but whether it's a coincidence or not, the exchanges I consider to be safest are all KYC and based in jurisdictions where fraud == prison.

Re: FTX balance sheet, revealed

#292

Post by seanhunter »

lupire wrote: post #282
seanhunter wrote: post #209

Earlier quoted context omitted.

Well firstly they were offering perps[1] which are a margined product. If you want to trade with margin on a regular exchange (like say you want to trade commod futures on CBOE or ICE or whatever) you contact a broker/dealer and put up collateral[2] to get margin. FTX was seemingly both acting as an exchange and as a broker/dealer so they were providing the margin and standing risk on the other side of certain trades…

> perp It's incredible that 1) crypto "finance" is full of products whose name screams scam, and 3) a perp(etuity) is like a fixed-term annuity except it's supposed to lay out forever , but no crypto perpetuity has been existence (and most have already failed) for longer than any annuity term.

In this case perp is short for “Perpetual Swap” (or “perpetual future” depending on the way the structure is set up) ie there is no expiry date. But yes.

It could equally be short for “perpetrator” in this case in particular.

Re: FTX balance sheet, revealed

#293

Post by panarky »

SideQuark wrote: post #262
carlivar wrote: post #229

Earlier quoted context omitted.

Here's the definition: https://www.investopedia.com/terms/p/ponzischeme.asp I think the point is that there are more structures out there like this than we think. Social Security for example. Just do a web search and you'll see it's a rather mainstream question. Also there are so many unfunded public pensions that could meet the definition. Perhaps the difference is transparency. We know these public programs are cur…

Social Security isn't a Ponzi scheme. It's not hiding how it's funded, has accurate transparent accounting, and isn't misleading anyone about it. It's more like insurance. Pay as you go isn't a Ponzi scheme.

Then Bitcoin isn't a Ponzi scheme either.

It doesn't hide anything, it's far more transparent than Social Security, it doesn't mislead anyone.

Re: FTX balance sheet, revealed

#294

Post by lottin »

manholio wrote: post #284
lottin wrote: post #187

Earlier quoted context omitted.

Central bank reserves are not a liability because they don't entail a financial obligation. They're only listed as a liability on the balance sheet because it's convenient from an accounting perspective. When a central bank buys a bond, they use reserves, which are not a liability in a financial sense, therefore the central bank makes an instant profit . Even if the bond were to lose 80% of its value, the central ban…

It's not just "accounting convenience" it's literally the way the profit vs loss of the central bank is defined. The central bank typically has a legal obligation to maintain stable prices, so while outstanding currency is not a liability in the conventional sense with a certain maturity date, interest etc., it's undoubtedly a debt towards society at large, which could presumably need to be redeemed and sterilized in…

You're stretching the meaning of 'debt' and 'bankruptcy' beyond what these words are generally accepted to mean.

Re: FTX balance sheet, revealed

#295

Post by SideQuark »

panarky wrote: post #293
SideQuark wrote: post #262

Earlier quoted context omitted.

Social Security isn't a Ponzi scheme. It's not hiding how it's funded, has accurate transparent accounting, and isn't misleading anyone about it. It's more like insurance. Pay as you go isn't a Ponzi scheme.

Then Bitcoin isn't a Ponzi scheme either. It doesn't hide anything, it's far more transparent than Social Security, it doesn't mislead anyone.

I didn't call Bitcoin a Ponzi scheme.

It's more of a pump and dump scheme where people extol made up virtues to get suckers to put money in, and as demonstrated for well over a decade now, it's a complete financial crapstorm filled with theft, criminal activity, and people stealing incredible sums of money from the unsuspecting.

But sure, it's not a Ponzi scheme. It just makes them easier to do to people.

Re: FTX balance sheet, revealed

#296

Post by hiq »

lupire wrote: post #283
hiq wrote: post #160

Earlier quoted context omitted.

> why would a VC like Sequoia invest in such firms? I thought the rationale was already widely known by now: https://en.wikipedia.org/wiki/Greater_fool_theory Or in more charitable terms: if an investment has a positive expected return according to their model (meaning that they think they can sell their shares / tokens in the case of some VCs), they do it.

Who was the greater fool? Sequoia gave SBF money and SBF stole it.

Sure, I didn't say their model was correct.

Re: FTX balance sheet, revealed

#297

Post by alexb_ »

jasonwatkinspdx wrote: post #192
ilrwbwrkhv wrote: post #171

Earlier quoted context omitted.

Some kaching on the side. ;) Seriously though, a lot of influencers promoting this stuff have been getting paid in cold hard US dollars to promote these scams. How do I know? I spoke to influencers to talk about my portfolio companies and many of them told me the crazy amount of cash they were getting paid from these scammers. Think 25,000 for a channel with hardly 100k followers. That's why I feel like Sequoia partn…

That's nothing compared to what stake and the other bitcoin casinos have been spending on influencers. Until twitch banned them their top sponsored streamers were making a reported 2 to 3 million a month. Likewise there's tons of crypto money sloshing around the esports world. FTX paid TSM 200 million for naming rights. In an environment like this its really hard for legit sponsors to pitch influences unless the infl…

The biggest gambling streamer, TrainwrecksTV, was making 360 MILLION DOLLARS for 18 months of nonstop gambling. Like, wake up, gamble for 20 hours straight, go to sleep for over a year. https://gamerant.com/twitch-trainwreckstv-360-million-gambli...

Can't exactly blame the guy either. I would give up a whole lot and a year of my life for half of what he made.

Re: FTX balance sheet, revealed

#298

Post by HDThoreaun »

ShamelessC wrote: post #131
bjornsing wrote: post #92

Earlier quoted context omitted.

But maybe it could have been? I’m a complete crypto skeptic who would never touch anything like FTT, but it’s not an obvious Ponzi scheme. I think one of the troubles with crypto is that it’s very easy to operate what is effective a Ponzi scheme, without fully realizing it yourself.

Eh, it is _obviously_ a ponzi scheme after doing a bit of research. In this podcast he all but says it out loud. https://jaxandmartinshow.com/sam-bankman-fried-transcript/

He was describing yield farming schemes, not FTX or FTT.

Re: FTX balance sheet, revealed

#299

Post by HDThoreaun »

funstuff007 wrote: post #202
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…

> Imagine if JP Morgan Chase's entire value was in JP Morgan Chase stock, It's way worse. JPM stock pays dividends in dollars. The yield on FTT is more FTT.

FTT did buybacks which are much more popular than dividends because of their tax advantage.

Re: FTX balance sheet, revealed

#300

Post by HDThoreaun »

grey-area wrote: post #67
lordnacho wrote: post #58

Earlier quoted context omitted.

Seems like Alameda was critical to the how of it. What's not clear to me is what they gambled on that lost money. Business model ought to be simple, the exchange earns loads of fees, and Alameda makes markets on it, earning spreads. Just putting a lid on the risk there should be enough to keep people occupied, no need to print your own money for extra leverage.

SBF is a con artist. There is no point looking for a legitimate business because there wasn’t one.

Running an exchange is a legitimate business that should make tons of money if you're not embezzling customer funds.
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