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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

#751

Post by Animats »

coffeebeqn wrote: post #688
nullc wrote: post #617

Earlier quoted context omitted.

> This may be the biggest embezzlement of customer funds held in custody in history. I wouldn't be surprised to learn that the amount of actual customer funds that went in were much smaller than claimed. Keep in mind FTX was mostly 'perpetuals' -- fake assets. It might be that a lot of the customer funds were just fictional gains, also may be that a lot of them were paper value owned by SBF entities. I've been trying…

How about everyone with assets stuck in FTX that can’t withdraw them? When your accounting is fictional it might be hard to pinpoint who’s money went where but everyone got screwed in the end

There's someone on Reddit who says they had their entire net worth in USDC on FTX.[1]

At least they're at the head of the line in bankruptcy. Custodial funds come ahead of debts.

[1] https://www.reddit.com/r/wallstreetbets/comments/yq6y5d/all_...

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

#753

Post by ahallock »

twblalock wrote: post #528

This has been a wonderful social experiment, enabling people who didn’t live in the 19th century to see what happens when banking and investing is treated like the wild west. Maybe something could have been different this time? In the end it wasn’t, and it proves the necessity of regulation and institutions. There aren’t very many other aspects of our society where we get to have that kind of experiment and find out…

Defi can help. There are still issues with contract vulnerabilities, but I don't think you can get away with the same level of fraud as you can on a CEX, where there's far less transparency.

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

#754

Post by vgatherps »

AustinDev wrote: post #361
vgatherps wrote: post #220

Earlier quoted context omitted.

She’s not wrong, stop losses are pretty pointless if you’re running a high volume market maker that is in theory constantly doing tons of volume and reacting to updates. They’re also super dangerous if you have gigantic positions Anyways they wouldn’t save you from collateralizing your loans with shitcoins, taking leveraged bets with money that isn’t yours, having super high exposure to UST and/or Luna, exposed to ha…

Fair enough. I'm not familiar with that kind of trading I'm only familiar with basic day trading such as momentum and swing trading which stops have been very helpful for me personally. I imagine when you're making a market and are moving massive volume the rules are different and as you mentioned would require a lot of math like maybe trying to be delta neutral.

For a bit more color, as stop makes sense for you since you’re not there 24/7 making decisions.

But if you are, there’s no reason to just auto trade a position away. The decision of “what to do when price hits X” is a function of many things instead of price, and you’re better off dynamically deciding.

Consider that you could already implement a stop as a 24/7 trading firm anyways

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

#755

Post by bmitc »

timmytokyo wrote: post #693
bmitc wrote: post #458

Earlier quoted context omitted.

My thoughts are that FTX was maybe a legitimate business, but then Alameda was his trading baby that just happened to be run by kids, including himself, that have no idea what they're doing and was losing money left and right. Then using FTX customer funds was viewed as just a "let's move these funds over to get our trading back on track and when we do, we'll move them back". That's my honest guess if I'm being gener…

Seeing these kids talk puts it even more into perspective. Just watch this video of Caroline Ellison, CEO of Alameda. https://www.youtube.com/watch?v=aW6SqLXw944

I made a comment on that video elsewhere. It’s pretty clear they were way out of their league in more ways than one.

They’re the type of people that are too smart for their own good where they can’t even see how idiotic they’re being. Or maybe they’re just spoiled. Or maybe they just think they’re smart. It’s interesting to me that Jane Street prides themselves on their hiring process, but they apparently hire folks like this.

Other than people losing money, I am super glad these reality checks are happening. But I wish they’d happen to more as well, e.g., Musk and Trump.

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

#756

Post by ohgodplsno »

stripedfish7 wrote: post #623
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…

I don't understand your point. My grandfather tries to use only cash which allow 'payments to be sent directly from one party to another without going through a financial institution'.

Cash has serial numbers for traceability, and is emitted by a central bank. That's a big chunk of a financial institution right there. Additionally, if you pay for $50, the state won't give a damn, because it's $50. Pay a company $10k in cash and every alarm will go off and the transaction will have to be notified to a financial institution. Tracfin in Europe for example, etc.

So, no, cash isn't entirely separated from financial institutions.

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

#757

Post by ahallock »

dist1ll wrote: post #702
HDThoreaun wrote: post #634

Earlier quoted context omitted.

You're always going to need a centralized ramp to convert crypto to fiat though. If everyone thinks they're scams crypto has a big problem.

Yeah, but the conversion happens very quickly. Deposit, trade, withdraw. Unfortunately, people leave tons of money on exchanges, for long periods of time. That's the problem. That's what the majority of exchange users are doing.

I believe BlockFi had all their assets on FTX

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

#758

Post by MacsHeadroom »

kranke155 wrote: post #714
TacticalCoder wrote: post #665

Earlier quoted context omitted.

> Can anyone speculate what Bankman-Fried's exit plan was? I can speculate based on recently revealed facts. SBF did grease politicians to the tune of 40 million USD in political donations. Several have described these donations as: "bribes" (I'll let you judge). (as a sidenote I wonder if these politicians are going to give these donations back to the people SBF scammed). A US congressman, as reported here several t…

This is all very interesting. I am also starting to wonder whether CZ had a good idea this would happen because maybe Binance is structured similarly. Basically - is Binance solvent? I don’t know.

Binance leads the industry in proof of 1:1 reserves of custom holdings.

CZ knew about FTX's finances because he was the original investor in FTX. The reason he had FTT to dump in the first place is because of that initial investment in FTX.

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

#759

Post by ohgodplsno »

everfree wrote: post #690
hotcoffeebear wrote: post #683

Earlier quoted context omitted.

What you regulate; cryptocurrency exchanges, cryptocurrencies or decentralized exchanges?

Companies, of course. Edit: Businesses, more specifically.

So I could become a trusted individual and handle hundreds of millions of dollars in transactions through my homegrown exchange (read: I cloned a git repository) and I will not be regulated because I'm not a company?

Sounds like a solid plan.

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

#760

Post by sp332 »

Animats wrote: post #389

"Voluntary Chapter 11" in Delaware. Figures. That gets them out from bankruptcy in the Bahamas, which is much tougher than US law. The Bahamas still has classic tough bankruptcy laws, where there's no debtor-in-possession reorganization. It's straight to liquidation, with a court-appointed receiver in charge. This should be, and may be, converted to a straight liquidation. Chapter 11 can be useful for restarting comp…

Actually, the Bahamas already froze their stuff and that subsidiary is not part of the Chapter 11. Looks like Australia did the same. https://arstechnica.com/tech-policy/2022/11/sam-bankman-frie...
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