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FTX to file for U.S. bankruptcy, CEO resigns

reuters.com

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Re: FTX to file for U.S. bankruptcy, CEO resigns

#731

Post by mlinhares »

dist1ll wrote: post #700
null0pointer wrote: post #697

Earlier quoted context omitted.

This is pretty clearly not a failure of cryptocurrency. Bitcoin et al. are still chugging along just fine. This is, once again, a failure of a centralized business in which people placed way too much trust. I hope SBF, and other "crypto" company execs, are held accountable for misleading customers about their offerings. Specifically calling it crypto when it's not.

That's what people don't get. FTX' spectacular failure is literally an advertisement for decentralization.

The "no true Scotsman" is such an old and failed defense for crypto. Not even the believers believe in it anymore.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#732

Post by wustangdan »

JeremyNT wrote: post #638
Julesman wrote: post #463

I'm not a luddite (on hacker news lol) and I can clearly see the revolutionary potential of blockchain. But, for the love of God, can we STOP the blind short-term speculation on the promise of extreme wealth. Moderate investment can support development without the kind of hype that ruins lives and sullies public perception of the technology.

> I can clearly see the revolutionary potential of blockchain. What do you feel is the "revolutionary potential" here? Bitcoin has been around for a while, and I surely haven't seen it. I see this stuff only used for scams, speculation, and illicit transactions. None of this is "revolutionary" - scams, speculation, and illicit transactions have been around as long as money.

The reason is because your government is reasonably well behaved. You can think of crypto as a hedge against bad government behavior. So in your case, you aren't a target customer.

Try thinking about people in Turkey or Venezuala, where the yearly inflation is 100% - 5,000%. Bitcoin looks like a relatively stable safe heaven in comparison.

https://www.coindesk.com/layer2/2022/10/25/turkey-cryptocurr...

In the US it was illegal to send dollars to Wikileaks. Is it really your money if you aren't allowed to send it to whoever you want?

Imagine instead of Wikileaks it was a political cause you truly believed in and wanted to support but your government didn't like. Surely you can see how they could label any money flowing to this cause as an "illicit transaction". Dn't you think that you should have the power to support whatever cause you believe is right? Or do you think that only your government should decide what are the approved political causes you are allowed to support?

Re: FTX to file for U.S. bankruptcy, CEO resigns

#733

Post by martin8412 »

lupire wrote: post #667
everfree wrote: post #597

Earlier quoted context omitted.

I don't see why crypto is incompatible with regulation and institutions. Crypto is a unit of account, not some magical lawless thing that's doomed to never have a regulation written about it. In fact, places like New York already have pretty strict regulations requiring specific licenses for crypto-related businesses. Crypto crises like these are in general due to regulation not having caught up yet, not because comp…

Crypto is naturally globally networked. What jurisdiction could it be in?

Banking is largely globally networked as well, at least in the West.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#734

Post by krupan »

pjc50 wrote: post #319
krupan wrote: post #289

Earlier quoted context omitted.

Everything you say is true. I would like to clarify that the regulations on "the financial system" have probably enabled just as much fraud as they have prevented over the long run. The financial system you speak of is a huge collection of bets and leverage and interesting interpretations of the truth ("why yes, your money is 'safe' with us!"). The regulations make it work just barely well enough that it only comes c…

> loaning your money to banks/corporations/governments/individuals is super risky This is called a "low trust society". The flip side is of course that nobody will lend you money. Mortgages and consumer credit are scarce. Business credit is difficult. Large amounts of capital need to be tied up in buffers. The overhead of keeping an eye on everyone is considerable. You don't get "First World" levels of development wi…

I actually really like the idea of not needing to rely on trust so much. Needing to rely on trust is a big problem that Bitcoin solves. There's no single Bitcoin Chair than can tweak the policy or supply of Bitcoin that you have to trust. No congress or president that can change the rules of the Bitcoin game that you have to trust. Bitcoin is impossible to forge, no trust that someone is handing you real money needed. There are no charge backs, payments are fully settled in minutes not days, you don't have to trust that you'll get paid and stay paid. No couriers, no middle men that you you have to trust to not steal your money in transit. If you want to prove to someone that you have the funds for something (like maybe FTX proving to customers they have the funds they said they did), you can sign a message with the private key of your wallet and everyone can verify that you have the funds in that wallet.

Many of the crypto scams that are out there are claiming their coin has these same properties when it doesn't and that's where people at getting burned by "crypto." Yes, regulations could reduce the risk of these frauds happening, but they won't eliminate it. Bitcoin eliminates the risk.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#735

Post by lazide »

thewataccount wrote: post #649
lazide wrote: post #611

Earlier quoted context omitted.

Crypto is incompatible with regulation and institutions because it was designed to be, and is consistently a part of the ethos espoused by pretty much all crypto players? Literally, the first sentence in the Bitcoin whitepaper (which arguably kicked off 'crypto' as a thing) is "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going thro…

The network was designed not to be regulatable. Businesses however are regulatable. The US has shown they can effectively enforce AML/KYC requirements across the vast majority of exchanges and businesses. Any exchange the average person tries to use to buy crypto will request your ID to do any meaningful transaction. Granted, there are exchanges you can use a VPN and access without KYC, and while it is difficult to m…

Sure, but that’s building a giant industry around the tech to make it explicitly NOT what it was designed to be, or what the ethos has been - secure, point to point electronic cash with no one telling you who you can transact with or what you can spend it on. Aka electronic cash.

No one needs a pile of paperwork to prove to the gov’t who they are to spend or get paid cash.

No one needs to be on a list, and have their every transaction double checked to make sure it’s with a validated counterparty to pay in or get paid cash.

Etc.

At that point, it’s literally cheaper, easier, and safer to just use a normal bank.

Which is I guess the point.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#736

Post by short_sells_poo »

luckylion wrote: post #580
chx wrote: post #533

Earlier quoted context omitted.

> and I can clearly see the revolutionary potential of blockchain. I can not. It's been 13 years and there's still nothing. It was never anything else but a scam and can not be anything else but a scam for all crypto"currencies" with a transaction fee are negative sum games .

Fast, cheap money transfer (theoretically) not requiring trust in any middle man, cutting out bank's control, i.e. "digital cash". I don't know if it's revolutionary, but it has a lot of potential and is great when it works.

I can transfer money for free and it gets instantaneously deposited in the other bank account. You list many things (middle man, bank's control) but don't list any reasons why these are bad. You also say it has potential, but don't provide any example such potential.

IMO there is one saving grace of cryptocurrencies, but ultimately this is also the reason why they simply won't be accepted: they are temporarily out of government control. This allows one to funnel funds in and out of hostile jurisdictions. This is a genuinely beneficial use case for people trapped in these jurisdictions. However, I'd argue this is such a vanishingly small portion of the mindshare and "business" conducted with and on behalf of the crypto industry, that it doesn't offer even a shred of redemption. The one altruistic use case is practically drowned out in the insane amount of buzzword laden echo chambers coming up with ever more hare brained structures and concepts to sell to each other. I wonder if these people even recognize how much of a caricature they have become.

I really connected the dots when I read some banker's messages to Elon Musk about how SBF was pitching some blockchain silliness for Twitter (as he would), and even Elon Musk, the master memer and troll, recognized how silly the idea was.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#737

Post by mrguyorama »

hnews_account_1 wrote: post #654
vishnugupta wrote: post #628

Earlier quoted context omitted.

There’s this incredulous passage from Sequoia article that’s been taken down since. Make of it what you will At this point, mid-2019, SBF decided to double down again—and scratch his own itch. He would bet Alameda’s multimillion-dollar trading profits on a new venture: a trading exchange called FTX. It would combine Coinbase’s stolid, regulation-loving approach with the kinds of derivatives being offered by Binance a…

The super stupidity of using math to dazzle people around you is my greatest lesson from this. In my highly technical field, I can use math without treating it like some precious scripture. But it’s good to know it is so unfamiliar to a normal person in the VC world, I can use it to justify even a startup doing genocide as a platform or something.

It's almost like people who don't actually know anything about math, statistics, or probability shouldn't be believed when they make poor arguments using the same.

Maybe there's a reason it takes 4 years of extremely tough classes to understand the basics of "hard" math.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#738

Post by mrguyorama »

johnp314 wrote: post #715
shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

"Can anyone speculate what Bankman-Fried's exit plan was?" SBF contributed millions to democrat candidates in the recent elections. Perhaps his exit plan was legislation to bail him out.

He didn't have an exit plan because, like every gambler, he was sure his "system" was better than anything that came before and couldn't possibly go tits up.

Like every gambler, he was wrong of course, and eventually lost it all because gambling is stupid.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#739

Post by saurik »

polygamous_bat wrote: post #400
etc-hosts wrote: post #340

Earlier quoted context omitted.

Coinbase appears now to be relatively boring, highly regulated, and compliant with US laws. I think they'll be fine.

They will be fine _modulo people's interest in crypto_. The way I think about it is that their business model is taking fees off of every transactions, so as the interest tapers off so will their earnings and valuation.

You seem to be confusing "is a good business to invest in" into the discussion of "is reasonably safe to use".

Re: FTX to file for U.S. bankruptcy, CEO resigns

#740

Post by pavlov »

LZ_Khan wrote: post #721
alberth wrote: post #295

Dumb question: so if you stored digital assets in a FTX wallet, does that mean you just lost all of your $$$? If so, wow'zer.

How does FDIC insurance play into this?

It doesn’t apply. Crypto investors wanted to be free of pesky regulation, remember.
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