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We will not pursue the potential acquisition of FTX

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Re: We will not pursue the potential acquisition of FTX

#361

Post by mccorrinall »

ETH_start wrote: post #306
churchill wrote: post #159

Earlier quoted context omitted.

I know, right? Soon the defi community will be calling for the own version of Glass-Steagall. What is old is new again, I guess. Knowing when to stop is genius.

This is not DeFi. This is CeFi that caters to crypto. The major DeFi apps have had no problems this cycle. So perhaps not surprisingly, Uniswap - which is a preeminent DeFi app - now has deeper liquidity on many important trading pairs than the largest CEXes: https://uniswap.org/blog/uniswap-v3-dominance

Lol, yes on spot, but no one trades spot! The sweet leverage lays within the future market.

Re: We will not pursue the potential acquisition of FTX

#362

Post by randomsearch »

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…

> had some legal obligation

That's the problem, though. Crypto has wild gains because it's an unregulated wild west. And for the same reason it's full of pyramid schemes etc. As soon as you regulate, you fix the problems but head to centralisation and it becomes a boring service without big profits.

Re: We will not pursue the potential acquisition of FTX

#363

Post by grey-area »

Semaphor wrote: post #325
jjitz wrote: post #295

Earlier quoted context omitted.

I hate to gatekeep, but I find it pretty impossible that you are "in the crypto space" in any meaningful sense but somehow have not heard of FTX. That's like being "in the crypto space" but not knowing what Ethereum is.

Never heard of FTX either until this whole implosion happened. I’m certainly not super active in crypto, but it seems to me there are worlds between Binance and FTX.

Binance is also incredibly dodgy and will also collapse along with buttoned, tether and multiple other frauds in this space.

Re: We will not pursue the potential acquisition of FTX

#364

Post by randomsearch »

MihaiSandor wrote: post #336

It sounds like this Web3 space is not decentralized at all. With those 4-5 crypto exchanges we cannot talk about bulding real businesses on those technologies, we are super early.

Super early, or... such systems tend to centralisation.

There are very few successfully distributed systems I can think of. Bittorrent is on. I guess we could argue some markets in the economic sense are distributed. But in reality even both of those are part-centralised.

Just turns out centralisation is usually more efficient and more convenient.

Re: We will not pursue the potential acquisition of FTX

#365

Post by bambataa »

fspeech wrote: post #332
cturner wrote: post #327

Earlier quoted context omitted.

The toy model is the idea that a bank gets deposit from one customer and loans it to another. This is not how it works. If you go to a bank for a loan, they do a risk assessment of you, and then make some marks on a ledger. As a result of this, new money appears in your account. But - what stops banks from creating infinite money? There is a byzantine system of rules laid out by the Basel Accords and national regulat…

Actually the "toy model" is exactly how it works. When you take a loan from the bank and deposit their check your bank must pay whoever the amount on their check. There is not some mysterious ledger they just mark. The fact that a bank takes an illiquid asset - your promise to pay them back - and turns it into a liquid claim on themselves is not creating money out of "thin air". Your promise to pay the bank is not "t…

By your logic, my promise to pay them back is what creates the cash? As someone upthread said, the BoE wrote a report on this: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

I assume they would know.

Re: We will not pursue the potential acquisition of FTX

#366

Post by shawabawa3 »

skippyboxedhero wrote: post #252
JustLurking2022 wrote: post #202

Earlier quoted context omitted.

Hint: they're not making people whole, they don't have any assets with which to do so. That's why Binance ran the other direction.

Right, but if the choice is between SBF paying $5bn or going to jail for 30 years...then what? The facts aren't clear, but SBF has money outside FTX. Even if the loss was manageable, I suspect that Binance never intended to do any deal. They had absolutely no incentive to do so.

SBF has allegedly already filed for bankruptcy

Re: We will not pursue the potential acquisition of FTX

#367

Post by shawabawa3 »

colinmhayes wrote: post #351
rippercushions wrote: post #199

Earlier quoted context omitted.

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

Binance only loans customer funds if you opt in to a yield product (I hope, who knows)

Re: We will not pursue the potential acquisition of FTX

#369

Post by throw474374383 »

JackFr wrote: post #303
throw474374383 wrote: post #234

Earlier quoted context omitted.

Right so it's the government's fault for encouraging the corporations to do something they didn't really want to do, which inevitably led to the corporations naked inhuman amoral greed running amock.

Do you think there was a sea change in the base level of greed in the run up to the financial crisis? (Remembering of course that it’s impossible for a corporation to be greedy, only a human being can be so.) I’ve been beating this drum for more than 10 years. The big story of the financial crisis is that while there was fraud and corruption at the margins, the bulk of the economic dislocation was caused by well inte…

the bulk of the economic dislocation was caused by well intentioned people making good faith decisions that in hindsight proved very foolish

I agree with that. But that comes about because we've arranged our economic activity into monolithic 'corporations' that are immortal, have the legal status of persons, and are compelled to chase shortsighted profit above all else, show no remorse, and any moral wrongdoing is just a slight financial risk to be approached like any other monetary risk.

All the humans working for the oil industry today are making good faith decisions but together they work for a massive unstoppable inhuman juggernaut that is destroying our climate while fighting every attempt to rein it in with every means possible at its disposal.

And yes I can call corporations greedy. They have demanded to be treated as people in the courts of law so I'll judge them as people

Re: We will not pursue the potential acquisition of FTX

#370

Post by 0xAFFFF »

matheusmoreira wrote: post #333
chii wrote: post #254

Earlier quoted context omitted.

and this is why banks are not allowed to use customer deposits for such activities. And if they do, they must have equity value to back it up - aka, the bank's share holders lose value _first_ when shit hits the fan, before customer deposits. Then lastly, the gov't has put up guarantees on the deposits in case bank equity cannot cover customer deposits when shit hits the fan. Crypto has none of the above - so basical…

This isn't a cryptocurrency problem though. It's a cryptocurrency exchange problem. As you noted, they have essentially reinvented centralized fractional reserve banking with none of the benefits and all of the drawbacks. They're all unregulated banks in disguise. Cryptocurrencies were meant to put an end to such things. Ironic how corporations ended up reinventing it all on top of crypto. Exchanges are everything th…

> Exchanges are everything that's wrong with this space.

Exchanges have provided the necessary convenience for mass adoption, providing a way to get your magic beans in exchange for real money without much hassle. Decentralized systems are inherently more complicated than centralized ones and have a harder time gaining traction in the general population (see Mastodon's adoption in the wake of Twitter's turmoil).

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