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

Post by oldgradstudent » Sat, Nov 12, 2022, 12:06 AM UTC

nullc wrote: post #617

Animats wrote: post #515

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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…

> 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…

Post by darth_aardvark » Sat, Nov 12, 2022, 12:08 AM UTC

hnews_account_1 wrote: post #654

vishnugupta wrote: post #628

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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.

Post by rightbyte » Sat, Nov 12, 2022, 12:18 AM UTC

blep_ wrote: post #474

Alupis wrote: post #448

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> Coinbase doesn't offer the leverage that offshore exchanges do. FTX was popular originally because they offered 100x leverage Sounds like a red alarm for me. There's probably a good reason domestic exchanges don't let you extend out that far... particularly on extremely volatile securities.

That kind of gets into philosophy of what governments are for: should they protect people who make bad decisions from themselves? Does the answer change if people are actively marketing the bad decision? Does the attempt at doing so suggest they're actively trying to keep poor people from getting rich? (This comment is an explanation of a viewpoint, and not an endorsement.)

Post by anikom15 » Sat, Nov 12, 2022, 12:20 AM UTC

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…

Post by moralestapia » Sat, Nov 12, 2022, 12:21 AM UTC

coffeebeqn wrote: post #670

AYBABTME wrote: post #535

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I think they thought they were honest and doing things properly, and didn't realize that their holding of FTT was making them as bad as the other frauds before. I think these ouroboros are complex enough that even main players don't necessarily understand the position they've put themselves in.

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.