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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

#781

Post by socrates1024 »

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…

Why would this prove the necessity of regulations? This occurred within the realm of regulations, not in the wild west. FTX.US is a regulated entity in the US, and FTX Intl wasn't available to US customers. Doesn't this prove that calamity happens even despite the regulations

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

#782

Post by thewataccount »

lazide wrote: post #735
thewataccount wrote: post #649

Earlier quoted context omitted.

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…

> Sure, but that’s building a giant industry around the tech to make it explicitly NOT what it was designed to be, > No one needs a pile of paperwork to prove to the gov’t who they are to spend or get paid cash.

To be clear there's different types of regulations, some we/I personally agree with more than others.

Personally, I agree with you that kyc/aml laws are over the top. I think privacy and money laundering are two things people often conflate, and that privacy is something we should want. (Side tangent - the majority of crypto was not really designed for anonymity or privacy, although that's a whole different topic). People claiming "crypto is just for money laundering" as a reason it's bad should be applying the same logic to physical cash.

What I'm particularly interested in is regulations around the big exchanges to prevent them from putting all of their clients money somewhere stupid, losing it all, and go illiquid.

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

I mean yes, an FDIC insured bank is absolutely safer than an unregulated crypto exchange. This is the exact reason why the phrase "not your keys, not your coins" exists, and why everyone says you shouldn't keep your keys on an exchange. Done properly, a crypto wallet should be safer than a bank provided you can assure physical safety and redundancy of your keys.

Part of the problem IMO is that crypto became this "get rich quick" thing - with "exchanges" advertising double digit returns, people using NFTs for art for some reason, etc. I think the technology has uses, but this "get rich quick" bs has been a massive hinderance. I really think this "the point of crypto is to make money" mentality is missing the actual use of it.

tl;dr - a properly used crypto wallet should be safer then a FDIC bank, an FDIC bank is faaar safer then a crypto exchange, there could be more regulation on just the exchanges, and aml/kyc laws are a seperate type of regulation - I was just using these as an example of the US government successfully regulating exchanges.

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

#783

Post by biztos »

lazide wrote: post #719
stripedfish7 wrote: post #623

Earlier quoted context omitted.

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'.

Which every financial institution and western government keeps trying to get rid of because it is essentially impossible to regulate or police? And which cops have a nasty tendency to seize on sight in the US if seen in any significant quantity (outside of an armored car) because ‘proceeds of crime’? And pretty much every drug transaction, illegal sexual transaction, whatever is done in cash? To the point most major…

> …and western government keeps trying to get rid of…

But then there’s China, right?[0] And arguably India?[1]

I agree with your larger point, but I don’t think it’s “western” per se to dream of the surveillance state knowing our every spend.

[0]: https://www.nytimes.com/2020/10/27/technology/alipay-china.h...

[1]: https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

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

#784

Post by szulcseban »

lazide wrote: post #735
thewataccount wrote: post #649

Earlier quoted context omitted.

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…

Well, you can't mix identity regulations (that only add friction at this point indeed) with securities regulations that organisations should succumb to when dealing with clients' assets.

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

#785

Post by HPMOR »

SantalBlush wrote: post #747
coffeebeqn wrote: post #670

Earlier quoted context omitted.

Let’s not treat senior management and owners of a company that has gambled away billions of dollars of customers (and investors) money as kids. They should get jail time from what I’ve read so far. They were either criminally stupid or did this on purpose. It really wasn’t that complex. This isn’t even close to 2008 complexity since this was all happening within one organization With the same owner SBF.

"Never attribute to incompetence that which can be adequately explained by greed."

“Never assume malice by that which could be explained by incompetence.”

As a caveat, however, SBF did work at Jane Street and graduated Summa Cum Laude from MIT with a Physics degree, so maybe this quote does not apply.

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

#786

Post by qeternity »

afarrell wrote: post #640
thwayunion wrote: post #491

Earlier quoted context omitted.

> can we STOP the blind short-term speculation on the promise of extreme wealth I first played around with blockchain in 2011 or so and I still don't know what actual utility this technology is supposed to have. I have never -- never -- encountered a value-producing use case for cryptocurrency that can't be solved by either signed git commits or a SQL database. Around 2015 a lot of people I thought were smart enough…

I have found one: Sending the Jamaican Bobsled team to the olympics. I highly doubt that this could have been done based on Postgres. Postgres is too boring and stable to attract the necessary attention. https://www.npr.org/sections/thetwo-way/2014/01/22/265060754...

TFA: Dogecoin was sent for 30k of the 184k raised

So no this effort was not enabled by crypto

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

#787

Post by kasey_junk »

bananapub wrote: post #532
kasey_junk wrote: post #516

Earlier quoted context omitted.

A “universal” api for moving money between financial institutions that don’t have existing relationships would be extremely valuable and could unlock innovation in everything from payments to mortgages. But the blockchain space has an extreme bias against the existing finance world. Frequently products in the space want to tear it down as they view it as predatory. This leaves us with the current situation, the crypt…

I swear to god, half of the problem with cryptocurrency is Americans not understanding what a functional personal banking system looks like. The big American banks just never bothered to move beyond the 1970s, and so otherwise fairly well-informed Americans in tech assume you need some sort of completely mad system like "consume the power of Spain making a distributed merkel tree full of partial hash collisions" to m…

Now do a transfer between an EU bank and one in Canada.

Or send money to a wallet in China.

I assure you I understand the rails going on in international money transfers, and the amount of different systems, protocols and hops to make it happen is staggering.

It can take sophisticated modern treasury operations years to get up and running in new jurisdictions independent of the regulatory challenges.

If we could isolate it to the compliance and risk management portions of the challenge it would increase innovation dramatically.

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

#788

Post by PKop »

lazide wrote: post #735
thewataccount wrote: post #649

Earlier quoted context omitted.

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…

That just means there are powerful forces that can act against "what it was designed to be" for their own interests, whether it's the financial industry, government or both acting together.

It's not about pleading to these entities that they are "doing it wrong". They know this, because this is their way to control it / oppose "doing it right".

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

#789

Post by mzs »

null0pointer wrote: post #697
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…

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.

Bitcoins is not fine. It is down roughly 75% over this year.
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