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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

#81

Post by pessimizer »

sytelus wrote: post #30
alexk307 wrote: post #10

Maybe people will finally get some sense and stop storing their wealth in digital currency that is backed by absolutely nothing. I think a lot of dominoes are about to fall in the crypto world

At present no major currency is backed by anything material but trust. USD, for example, is only viable because, at the deepest level, trust in it is enforced by US army. There are three major class of people who need digital currency: (1) who are super rich and won't care about putting their 1% of wealth for "diversify and forget", (2) who need to transfer money eyes off from governments, (3) people who need alterna…

> USD, for example, is only viable because, at the deepest level, trust in it is enforced by US army.

That's a very deep level. At the practical level, USD is viable because court judgements in the US can be settled in dollars (e.g. if somebody is held responsible for killing your goats, you can't demand to be paid back in goats), and US taxes are owed in dollars.

At the deepest level, taxes and courts are maintained by the US government, which I suppose you can say is protected by the US military?

Saying that the high dollar is protected by the US military makes more sense. But the dollar itself is protected by the magnitude and reach of the entire US government, which is only partially maintained and extended by killing people.

Re: We will not pursue the potential acquisition of FTX

#83

Post by NovemberWhiskey »

sytelus wrote: post #68
matai_kolila wrote: post #55

Earlier quoted context omitted.

Yeah but like, the US is a lot more likely to be around in 20 years, so this argument doesn't really make any sense. Honestly I'm sick of hearing it; yes we know, all money is made up, that's not an interesting point anymore. Society is okay with that, but it doesn't mean you can just make up another currency, that's not how it works.

That's exactly how it works. When you issue IOU, you issue your own currency. When a company issues stock, they are in fact issuing their own currency. All contracts are in fact a currency that can be sold, bought, invested and transacted. World debt is far far larger than actually currency in circulation. How does that happen? Because we make up "currency" all the time.

Other things we're fed up of: people making up their own weird and arbitrary definitions of "currency".

Re: We will not pursue the potential acquisition of FTX

#84

Post by mumbisChungo »

oldgradstudent wrote: post #67
PaulWaldman wrote: post #42

Earlier quoted context omitted.

>The silly thing is that FTX was a money printing machine. There was no reason to start gambling with user funds, aside from greed, hubris, and stupidity. Where were their profits derived? Was it from taking their slice of every transaction? Or selling their freshly minted coins? If it was the latter, that only works for so long, just ask the Fed.

> Where were their profits derived? Is there any reason to believe there were any profits ever?

Of course. They were one of the highest volume exchanges, taking a % of every transaction.

Unfortunately, they got greedy and started lending money (to themselves in Alameda, where it was gambled away)

Re: We will not pursue the potential acquisition of FTX

#85

Post by eddsh1994 »

Animatronio wrote: post #79
eddsh1994 wrote: post #69

Earlier quoted context omitted.

Basically any r/cc user who was in FTX and wants to invest part of their next paycheck?

As the saying goes "Fool me once ..."

Regardless of opinions it's a sizable user base! And, assuming there's another bull run at some point, it'll grow again.

Re: We will not pursue the potential acquisition of FTX

#86

Post by cellis »

mumbisChungo wrote: post #23

The silly thing is that FTX was a money printing machine. There was no reason to start gambling with user funds, aside from greed, hubris, and stupidity. Similarly, Sam's fund Alameda was delta-neutral until some time in 2021, which is something that also could have profitably continued in perpetuity, but they got greedy and started making directional bets with leverage.

There’s a Bloomberg article that goes over why this is a bit more nuanced than “gambling with customers funds”. In short, it’s either one or both of poor risk management ( margin traders can’t post collateral and the collateral they had was FTT which went to zero ) and black swan bank runs ( Binance CEO tweets about risky FTT causing bank run causing further drops ). In fact “gambling with customer funds” was by design. Coinbase, to their credit, lost business to the cexes and FTXs for not allowing derivative and defi lending / margin trading. So the customers should have known the fatalistic game they played.

If you have a subscription I recommend it. - https://www.bloomberg.com/opinion/articles/2022-11-09/bankma...

Re: We will not pursue the potential acquisition of FTX

#87

Post by [deleted] »

ignoramous wrote: post #34
cannaceo wrote: post #22

Earlier quoted context omitted.

My personal belief is that binance agreed with no intention to carry out the deal. CZ tapdanced on FTX's grave on twitter with critical comments yesterday. It is now unlikely that anyone else will want to step up to look at the deal.

I'd say Stripe but unlikely given their missed IPO window. Perhaps, Amazon, if they are feeling lucky?

[deleted]

Re: We will not pursue the potential acquisition of FTX

#88

Post by RadixDLT »

"Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market."

Re: We will not pursue the potential acquisition of FTX

#89

Post by mumbisChungo »

oldgradstudent wrote: post #76
jti107 wrote: post #38

Earlier quoted context omitted.

reminds me of LTCM...they were making bank until the Asian bank crisis and Russia defaulting on their debt https://www.dailymotion.com/video/x225si7

Very different. LTCM was making massive, very risky bets while pretending they were safe. They were making insanely leveraged bets on real assets. FTX seems to me to much closer to Madoff. They were printing their own Monopoly money and pretending it was worth billions.

The core of the issue here was not ponzinomics, it was the exchange gambling directly with user funds, by way of unsecured loans to a hedge fund controlled by the founders.

Fraud? Yes. But users weren’t buying into a ponzi, they were using a centralized exchange product with the understanding that reserves were whole, when in reality they were secretly fractional reserves.

Re: We will not pursue the potential acquisition of FTX

#90

Post by mumbisChungo »

nullc wrote: post #39
mumbisChungo wrote: post #23

The silly thing is that FTX was a money printing machine. There was no reason to start gambling with user funds, aside from greed, hubris, and stupidity. Similarly, Sam's fund Alameda was delta-neutral until some time in 2021, which is something that also could have profitably continued in perpetuity, but they got greedy and started making directional bets with leverage.

Why do you think a single thing they told the public was ever truthful? It seems naive to me.

I’m not sure what you mean by this exactly. Many of the things they said to the public are not true, but these currencies use permanent, public ledgers, so you can see where the money goes if you look carefully.
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