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

We will not pursue the potential acquisition of FTX

twitter.com

Post reply on HN
Print view View original

351–360 of 440 posts

Re: We will not pursue the potential acquisition of FTX

#351

Post by colinmhayes »

rippercushions wrote: post #199
woeirua wrote: post #95

Honestly, I think this is a really dumb move by Binance. They have taken a look under the hood, determined that FTX is bankrupt and then told everyone that is the case. Now there's going to be a widespread crypto panic that is going to cause other exchanges to collapse, and ultimately I expect Binance too will go down.

Don't shoot the messenger: the actual problem is that FTX is insolvent, and that would have come to light sooner or later anyway.

Binance loans customer funds too… maybe not to themselves but it could still come crumbling down

Re: We will not pursue the potential acquisition of FTX

#352

Post by [deleted] »

scrlk wrote: post #135

Just a PSA for any FTX users out there: please make sure you get details of your balances, deposits, withdrawals and trade history whilst the site is still up. You can download it as a CSV - I'd also take screenshots to be on the safe side. Save yourself a potential headache when you come to do your taxes down the line.

[deleted]

Re: We will not pursue the potential acquisition of FTX

#353

Post by cuteboy19 »

For most exchanges there are not many assets worth liquidating. The code and infra is standard, exchange A does not gain much from having exchange B's code. There are generally no special client relations you want to inherit. The offices are probably rented if not remote. The branding is valuable but adversarial to your own.

Essentially an exchange can be summed up as total crypto assets minus total crypto liabilities. If that number is negative then the exchange is just gone, no point in buyout.

The exception is binance which is basically AWS for crypto exchanges. https://cloud.binance.com/

Re: We will not pursue the potential acquisition of FTX

#354

Post by mudrockbestgirl »

nfw2 wrote: post #71

Potentially dumb question here; I am no expert on crypto or finance. Isn't the collapse of FTX in some ways evidence in favor of decentralized currency rather than against it? As evidenced by 2008, firms gambling with other people's money doesn't seem to be specific to DeFi. If coin exchanges had some legal obligation to just be wallet and marketplace services instead of investment engines, could that help prevent th…

It's not a dumb question. You're right that it's absolutely an argument for DeFi, but it comes with tradeoffs:

- Bugs in the code means all capital may be lost. That's potentially worse.

- The profit margins aren't nearly as high. If you're a centralized entity or a bank you can do all kinds of shady stuff behind the scenes with customer funds to fill your own pockets. It has happened over and over again both in TradFi and CeFi. In DeFi, you can't do that since it's fully transparent and backed. Good for the consumer, but not not as good for business growth. Many traditional finance entities have become as big as they are because they did shady stuff but didn't get caught. I'm just not talking about crypto exchanges here, but also traditional banks.

Re: We will not pursue the potential acquisition of FTX

#355

Post by octodog »

twblalock wrote: post #183

It's amazing how all of this was based on personal credibility, and a single Tweet caused the death spiral to start. Wells Fargo isn't going to go out of business if the CEO of Bank of America insults it on Twitter. But even if it did , there is FDIC insurance for deposits, and nobody whose balances were under the insurance limits will lose a penny. FTX succeeded solely based on the reputation and personal credibilit…

It's not based on personal credibility, it's based on regulation. Wells Fargo wouldn't collapse because it's regulated and has some actual provable guardrails in place.

Re: We will not pursue the potential acquisition of FTX

#356

Post by grey-area »

colinmhayes wrote: post #345
oldgradstudent wrote: post #62

Earlier quoted context omitted.

> FTX was a money printing machine Turns out, they were a Monopoly money printing machine.

No, FTX was making bank in fees. They just got greedy and loaned customer funds the SBF’s hedge fund to gamble with. Hedge fund went bust and now the loans default and the collateral which was just funny money to begin with is worthless.

If you believe FTX at all. These companies are riddled with fraud. Nothing they say or have said can be trusted (including reported earnings), and Tether and Binance will be next to collapse, at which point the ecosystem around Bitcoin will implode.

Re: We will not pursue the potential acquisition of FTX

#357

Post by phire »

JumpCrisscross wrote: post #318
fspeech wrote: post #316

Earlier quoted context omitted.

It's not exactly out of "thin air", since we are trying to be nuanced here. If you take out a mortgage to buy a house the bank does loan you the money out of their own funds. It's just that the seller who receives your funds will put the money back into the banks (not necessarily the same bank, but the money market is there for the banks to settle among themselves). So in effect the sellers make the loans to buyers,…

> the bank does loan you the money out of their own funds Nope. This is the toy model of money and banking taught in high school. When a bank makes a loan, it creates money. The fact that there are stabilising deposits is a fortunate convenience. This is why leveraged finance is inherently unstable. The BoE had a good paper about this.

It's important to understand that banks also destroy money when loans are repaid.

Everyone always brings up the fact that banks create money out of thin air when issuing loans. Nobody ever mentions that the inverse happens again at the other side.

I'm not sure how much it's because everyone just parrots the factoid that "banks create money" without understanding it, or they are deliberately trying to mislead people into distrusting the banking system.

Re: We will not pursue the potential acquisition of FTX

#358

Post by thom »

funstuff007 wrote: post #274
naveen99 wrote: post #127

Earlier quoted context omitted.

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?

Somewhat ironic that popular MtG podcast Limited Resources is sponsored by FTX (and popular card marketplace Channel Fireball).

Re: We will not pursue the potential acquisition of FTX

#359

Post by shapefrog »

matheusmoreira wrote: post #331
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’…

> The problem is that FTX took its customers’ money and traded it for a pile of magic beans Yup. Just yet another bank leveraging its fractional reserve. They just can't resist, can they? Actually I'm not even sure they're fractional in the case of cryptocurrency exchanges. Wouldn't be surprised if they were gambling with their entire reserves.

Yet another asset custodian that wasnt happy to only make a billion a year so pretended to be a bank pretending to be an investor while actually just being a degenerate gambler with a hooker, blow, yacht and team / stadium naming rights buying problem.

Re: We will not pursue the potential acquisition of FTX

#360

Post by randomsearch »

twblalock wrote: post #183

It's amazing how all of this was based on personal credibility, and a single Tweet caused the death spiral to start. Wells Fargo isn't going to go out of business if the CEO of Bank of America insults it on Twitter. But even if it did , there is FDIC insurance for deposits, and nobody whose balances were under the insurance limits will lose a penny. FTX succeeded solely based on the reputation and personal credibilit…

> FTX succeeded solely based on the reputation and personal credibility of its founder

This is why so many people compare crypto to the pre-regulation banks, and why they predict a similar fate for the exchanges.

Post reply on HN