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FTX Agreement with Binance

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Re: FTX Agreement with Binance

#31

Post by Animats »

ericlewis wrote: post #26
Animats wrote: post #23

From the announcement, Binance is not definitively buying FTX. They've agreed to discuss acquisition and do due diligence. Which means finding out how deep a hole FTX is in before proceeding. As a rule of thumb, about half of announced M&A deals don't happen. FTX is a licensed money transmitter in many US states. In some states they need regulatory approval for an acquisition. Binance is headquartered in the Cayman I…

They are buying FTX - not FTX.US, I would imagine it is fine.

They have several corporate entities.

* "FTX Trading LTD is incorporated in Antigua and Barbuda, and headquartered in The Bahamas."

* West Realm Shire Services Inc. - incorporated in Delaware.

CNBC now says that Binance is only trying to buy the non-US operations of FTX.

FTX.US terms say "Title to cryptocurrency represented in your FTX.US Account shall at all times remain with you and shall not transfer to FTX.US." Are US customers having Bitcoin withdrawal problems? If they are, that's theft.

Re: FTX Agreement with Binance

#32

Post by rnk »

questime wrote: post #12
dna_polymerase wrote: post #9

FTX was *throwing* money at everything moving in the crypto space. Where the heck did all the money go? Did they just spend VC money as long as they could and ran out now? Or did all the money disappear through the Alameda pipe? I really hope that there will be an investigation into the whole thing. Liquidity crunch my a**.

It went to the Democratic National Committee and AI ethics organizations.

Can you explain this comment, I don't see democrats as being bought in crypto? What would giving them money accomplish? Most politicians in both parties are very skeptical of all this crypto tulipmania. There are a very small number who seem to bought in. Republicans are in that group too.

Re: FTX Agreement with Binance

#33

Post by shawabawa3 »

Animats wrote: post #31
ericlewis wrote: post #26

Earlier quoted context omitted.

They are buying FTX - not FTX.US, I would imagine it is fine.

They have several corporate entities. * "FTX Trading LTD is incorporated in Antigua and Barbuda, and headquartered in The Bahamas." * West Realm Shire Services Inc. - incorporated in Delaware. CNBC now says that Binance is only trying to buy the non-US operations of FTX. FTX.US terms say "Title to cryptocurrency represented in your FTX.US Account shall at all times remain with you and shall not transfer to FTX.US." A…

From what I've read FTX.US has no withdrawal issues (yet)

Re: FTX Agreement with Binance

#34

Post by telotortium »

rnk wrote: post #32
questime wrote: post #12

Earlier quoted context omitted.

It went to the Democratic National Committee and AI ethics organizations.

Can you explain this comment, I don't see democrats as being bought in crypto? What would giving them money accomplish? Most politicians in both parties are very skeptical of all this crypto tulipmania. There are a very small number who seem to bought in. Republicans are in that group too.

SBF put $10 million this summer into an Oregon Democratic primary in an attempt to advance a candidate sympathetic to Effective Altruism, rationalism, and AI ethics to the US House (the candidate lost). SBF has in general been flashing a lot of cash over the past 2 years in order to become a major philanthropist in the EA space.

Re: FTX Agreement with Binance

#35

Post by shawabawa3 »

JumpCrisscross wrote: post #10
tyho wrote: post #3

Can someone ELI5 what has happened here?

FTX bet customer funds through the CEO’s hedge fund on an FTX token [1]. The token price fell when this was revealed [2]. The hedge fund, and thus FTX, had less money than they owed lenders and customers. FTX found a bail-out in Binance; otherwise everyone would have lost their money. [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa... [2] https://www.coindesk.com/markets/2022/11/08/ftt-plummets-as-..…

What it actually revealed that they embezzled customer funds? It's still speculation as far as I can tell (your sources say nothing about customer funds)

Re: FTX Agreement with Binance

#36

Post by radlad »

JumpCrisscross wrote: post #14
koolba wrote: post #11

Earlier quoted context omitted.

> otherwise everyone would have lost their money. It's a bit early to speculate on this one.

> bit early to speculate on this We’ve seen the balance sheet. The facts have been on the table for FTX as much as they are for Tether. I can’t say when they will fail. But as soon as we saw the Alameda books and Alameda and FTX’s responses (the former, an irrelevant statement about other assets; the latter, a claim of solvency without proof), the endpoint was sealed. Insolvent, leveraged entities don’t pay out junio…

I think the parent was pointing out that this is just an intent to acquire and could fall through.

Re: FTX Agreement with Binance

#37

Post by arcticbull »

Animats wrote: post #23

From the announcement, Binance is not definitively buying FTX. They've agreed to discuss acquisition and do due diligence. Which means finding out how deep a hole FTX is in before proceeding. As a rule of thumb, about half of announced M&A deals don't happen. FTX is a licensed money transmitter in many US states. In some states they need regulatory approval for an acquisition. Binance is headquartered in the Cayman I…

> FTX is a licensed money transmitter in many US states.

FTX.us, a separate entity not involved in the transaction, is a licensed money transmitter in the US. US persons are not allowed to use FTX.

> FTX does not onboard or provide services to corporate accounts of entities located in, established in, or a resident of the United States of America, Cuba, Crimea and Sevastopol, Luhansk People's Republic, Donetsk People's Republic, Iran, Afghanistan, Syria, or North Korea. FTX also does not onboard corporate accounts located in or a resident of Antigua or Barbuda. FTX also does not onboard any users from Ontario, and FTX does not permit non-professional investors from Hong Kong purchasing certain products. [1]

[1] https://help.ftx.com/hc/en-us/articles/360042412652-Location...

Re: FTX Agreement with Binance

#38

Post by JumpCrisscross »

shawabawa3 wrote: post #35
JumpCrisscross wrote: post #10

Earlier quoted context omitted.

FTX bet customer funds through the CEO’s hedge fund on an FTX token [1]. The token price fell when this was revealed [2]. The hedge fund, and thus FTX, had less money than they owed lenders and customers. FTX found a bail-out in Binance; otherwise everyone would have lost their money. [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa... [2] https://www.coindesk.com/markets/2022/11/08/ftt-plummets-as-..…

What it actually revealed that they embezzled customer funds? It's still speculation as far as I can tell (your sources say nothing about customer funds)

> still speculation

They've admitted to illiquidity transforming into insolvency. That doesn't happen if you aren't betting client assets.

Re: FTX Agreement with Binance

#39

Post by logicalmonster »

amanj41 wrote: post #25

Some elements of the crypto space may not need to be regulated, but centralized exchanges should be regulated as hard as banks and should regularly undergo liquidity stress tests. If FTX does turn out to be insolvent, execs should be getting more than a slap on the wrist

> should be regulated as hard as banks

Can you provide some general examples of types of regulations that you'd like to see?

Re: FTX Agreement with Binance

#40

Post by pinko »

v8xi wrote: post #21

Anyone wanting to know more about what led to this whole fiasco, I would highly recommend this read: https://dirtybubblemedia.substack.com/p/is-alameda-research-...

That visualization of circular flows is gold. Thank you.
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