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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

#861

Post by jefftk »

coffeebeqn wrote: post #680
JohnPrine wrote: post #662

Earlier quoted context omitted.

Diminishing returns don't apply for SBF - his life's goal is to fund effective altruist charities, so each billion is as valuable as the last as long as there are good projects to fund. I don't think people are comprehending how tragic this whole situation is (acknowledging that it's SBF's fault). This collapse put the brakes on a powerful force for good, and lives that would have been saved won't anymore.

It’s only ”good” if you believe the ends justify any means. What about FTX customers? People aren’t pawns you can play with for your “greater cause”

No one in effective altruism is going to defend secretly gambling customer funds, and that isn't what I read your parent as saying?

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

#862

Post by tootie »

etc-hosts wrote: post #340
sz4kerto wrote: post #309

Earlier quoted context omitted.

Even Coinbase?

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

Every coin on every market is being driven by the same collective mania. Just Coinbase is more ethical or Eth is ideologically pure doesn't mean their value isn't determined by the same rampant speculation and outright fraud that dominates the entire space. You may not see an outright bankruptcy but prices and volumes can plummet nonetheless.

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

#863

Post by paganel »

mrguyorama wrote: post #737
hnews_account_1 wrote: post #654

Earlier quoted context omitted.

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.

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

On top of that, any decent tech school also has an "ethics of engineering" course somewhere along the way, or at least I did about 20 years ago when I was a student (we had quite a stupid professor, but the intention was there).

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

#864

Post by tootie »

bmitc wrote: post #458
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…

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…

Whenever I see this kind of fervor and people getting rich off of it I liken it to pro wrestling. Everybody puts on the same show and lots of people cheer because they love the act and lots of people cheer because they think it's real. It's possible Alameda thought that wrestling was real.

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

#865

Post by lancewiggs »

sharkweek wrote: post #856

Howdy HN, as some of you may know from previous comments of mine, I’m always on the hunt for swag from dead companies (Lehman Brothers letterhead, Theranos shirts, Clinkle phone case, Enron desk art, et al). The more fraudulent the collapse, the more interested I am. I’d love to get ahead of the ball on this one so if anyone here has any, and I mean any, FTX swag you somehow have picked up over the years, I’m a very…

Perhaps it would be better to say "you might also like to contact /u/filmgirlcw, who is also in the market (and here is how)"

You are not in competition - you are both tiny versus the size of the market, and can work together to grow the amount of offers, thus lowering the overall price.

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

#866

Post by CPLX »

faefox wrote: post #87

I've seen some comments saying that this is all delayed fallout from the Luna/Terra collapse last spring, it's just that FTX had the means (its own token that it could pump and move around its own entities) to paper over the hole in its balance sheet until now. Can anyone more familiar with the situation elaborate? How much further will the contagion spread?

Crypto doesn’t do anything there’s no productive asset. Literally every dollar coming out is a subset of the dollars that went in.

It’s less than that even due to electric bills and all that.

Contrast that to a productive asset, like a farm. You start with land and put dollars in and you get food. And you still have the land. There’s more food than there was before.

Or if you’re one of those Elon worshippers, he starts with rocky ore and seawater or whatever and ends up with lithium battery packs.

So with that established, when you see this guy running around spending hundreds of millions of dollars the next question has to be whose dollars were those. Because they don’t have them any more and they ain’t getting them back.

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

#867

Post by paganel »

jmathai wrote: post #453
djinnandtonic wrote: post #431

Earlier quoted context omitted.

For someone that only dabbles in investing, what are the reasons people choose ultra-high-risk investments like crypto?

You would be surprised how easy it is for people to get sucked into a crypto bubble vortex that makes you feel like you're missing out big time by not being invested in crypto. I was pretty heavily involved in the personal finance community on Twitter and there's two camps. 1) VTSAX and chill (basically dump money into an ETF and forget about it) 2) Moar passive income by side hustles and crypto The latter became mor…

> well that folks' risk meter just wasn't registering.

That's because they were probably still in school back in 2008. I remember the days of late October 2008 like it was yesterday, and back then I was a no-name computer programmer working for an independent mortgage broker, not a big finance schmuck from Wall Street.

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

#868

Post by oldgradstudent »

Animats wrote: post #515
jacooper wrote: post #439

Earlier quoted context omitted.

I think he just though that he will never get caught, it was working for a long time, why would it fail? Also why are there no lawsuits yet? Since FTX clearly broke its own T&S?

U.S. Department of Justice lawyers are already closing in.[1] Using customer funds held in custody is theft. Period. People go to jail for this. This may be the biggest embezzlement of customer funds held in custody in history. Most scams involve misuse of funds invested, not just held in custody. The biggest outright theft of this type seems to have been Peregrine Financial.[2] That was $200 million, far smaller tha…

Wasn't MF Global several times bigger ($875M) in terms of customer funds used for other purposes, yet no one went to jail?

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

#869

Post by vgatherps »

jasonwatkinspdx wrote: post #477
Alupis wrote: post #422

Earlier quoted context omitted.

For someone that only dabbles in crypto - what are the reasons people choose to use high-risk exchanges like FTX, and buy even higher risk "sh*t coins" on them? Especially the exchange-created-and-owned coins - of which I have yet to see one actually do what it promised. Is Coinbase just not cool anymore, or is there some advantage to using exchanges like FTX until they go belly-up?

All of these places were offering insane APRs as well as other perks for staking your coins. So speculators park real money, expecting that they'll be smart enough to see the crash coming and slurping up that sweet return in the meantime. And it's glaringly obvious everyone offering these outsized returns is literally just pulling a ponzi.

FTX’s lending product was (theoretically) peer-to-peer, the rates were driven by actual borrow demand from other people.

FTX was just a tremendously better derivatives exchange than everybody else when it was launched. To this day only Okex of the major exchanges has a competitive margin system imo. Continuous pnl realization and cleaner perpetual models are icing on the cake.

Theft of user funds aside, SBF likely knows more about derivatives and trading them than most exchange operators and it shows in the design of the exchange.

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

#870

Post by jeffreyrogers »

georgeglue1 wrote: post #531
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…

My understanding is that Alameda was a market maker, which should have less exposure to down / upswings. What kind of bets was Alameda making? Why would it need so much leverage? I understand why loaning money to Alameda could be rationalized a risky, but not sketchy move (if Alameda posted collateral, paid reasonable terms like anyone else would, etc.).

They have been taking directional bets since 2020 at least: https://twitter.com/AlamedaTrabucco/status/13851809411867893...
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