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

FTX held less than $1B in liquid assets against $9B in liabilities

ft.com

Post reply on HN
Print view View original

31–40 of 189 posts

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#31

Post by csa »

aeternum wrote: post #11

"Currently, all U.S. banks are subject to a balance sheet leverage ratio, which requires them to maintain a ratio of tier 1 capital to balance sheet assets at a minimum level of 4%. In order to be well-capitalized, banks must achieve a 5% minimum leverage ratio" So FTX had an 11% leverage ratio, pretty good.

> So FTX had an 11% leverage ratio, pretty good.

A better comparison would be a stock brokerage that took your money to buy specific stocks on your behalf but then did something totally different, including “investing” in illiquid assets.

If they had just bought the stock you requested, then they could just liquidate your stock at market price when you said you want to sell.

This was not the situation that FTX was/is in.

Instead, the way FTX allocated money/assets was suspicious (at best) if not flat out irresponsible and deceptive.

Also, FTX was not and is not a bank, and the idea that this is levering in the same way regulated banks lever is laughable.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#33

Post by Gwypaas »

smeej wrote: post #20

Kraken's proof-of-reserves audits are looking more and more attractive and important these days! https://blog.kraken.com/post/15002/kraken-proof-of-reserves-...

Reserves means nothing without also knowing the liabilities. Without that it is simply more smoke and mirrors.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#34

Post by stephc_int13 »

orangepurple wrote: post #32
stephc_int13 wrote: post #7

It was all for charity. People are mean. https://twitter.com/The_Prologuist/status/158967849854920704...

Is this satire? I can't tell.

It is not.

Well, it depends on how you look at it.

Define satire?

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#36

Post by stephc_int13 »

oliwary wrote: post #25
stephc_int13 wrote: post #7

It was all for charity. People are mean. https://twitter.com/The_Prologuist/status/158967849854920704...

We should have trusted Larry David on FTX... https://youtu.be/noekVG8XLQI?t=45

This is smart.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#37

Post by JonathanBeuys »

zen21 wrote: post #26
JonathanBeuys wrote: post #15

There should be more discussion about how to store value without counterparty risk. Most people think it is as easy as ordering a hardware wallet, following the process the wallet software suggests and - hurray! - your keys, your coins! But it is not that easy. You also have to cut the wallet manufacturer and the software developer out of the loop. I have yet to see a description on how to safely create a wallet that…

https://www.crowdsupply.com/sutajio-kosagi/precursor This aims to address these issues. Verifiable hardware and open source OS and wallet.

There is no way a user can verify hardware and software.

The only solution is to use multiple air gapped wallets from different manufacturers which use a deterministic algorithm for signatures.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#38

Post by JonathanBeuys »

smeej wrote: post #30
JonathanBeuys wrote: post #15

There should be more discussion about how to store value without counterparty risk. Most people think it is as easy as ordering a hardware wallet, following the process the wallet software suggests and - hurray! - your keys, your coins! But it is not that easy. You also have to cut the wallet manufacturer and the software developer out of the loop. I have yet to see a description on how to safely create a wallet that…

Multisig, with hardware from different companies, no one of which could constitute a quorum of your keys. If you have even just a 2-of-3 keyset with one Ledger, one Trezor, and a Coldcard, none of those companies can screw you by itself. If you go up to 3-of-5, it's even more robust. You can set it up yourself using FOSS like Electrum. Or you can hire somebody like Casa[0] to get it all set up and set up the infrastr…

How do you create the Multisig?

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#39

Post by partloyaldemon »

JonathanBeuys wrote: post #15

There should be more discussion about how to store value without counterparty risk. Most people think it is as easy as ordering a hardware wallet, following the process the wallet software suggests and - hurray! - your keys, your coins! But it is not that easy. You also have to cut the wallet manufacturer and the software developer out of the loop. I have yet to see a description on how to safely create a wallet that…

I'd recommend a PNC checking account. Solves a lot of issues related to storing value without counterparty risk.

Re: FTX held less than $1B in liquid assets against $9B in liabilities

#40

Post by JonathanBeuys »

danielvf wrote: post #24
JonathanBeuys wrote: post #15

There should be more discussion about how to store value without counterparty risk. Most people think it is as easy as ordering a hardware wallet, following the process the wallet software suggests and - hurray! - your keys, your coins! But it is not that easy. You also have to cut the wallet manufacturer and the software developer out of the loop. I have yet to see a description on how to safely create a wallet that…

Ethereum multi-sig wallets do the trust side fantastically side very well. In addition you get ways to handle lost keys, ownership changes, and the ability to require multiple people to sign off on any action.

What is an "Ethereum multi-sig wallet"? Is that a piece of hardware? Multiple pieces of hardware? A piece of software?
Post reply on HN