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What Happened at Alameda Research

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Re: What Happened at Alameda Research

#91

Post by andromeduck »

TotoHorner wrote: post #7
wikfwikf wrote: post #6

Earlier quoted context omitted.

But the author makes it very clear in the second par "our claims only remain tentative at best". Isn't it much more useful to write something which actually tries to answer the question of what happened, albeit with appropriate caveats, than something which doesn't advance the understanding of the reader at all?

The New York Times piece is even worse, since it paints a misleading picture of SBF and his cronies losing all the money accidentally rather than malice (far more likely).

The guy is Bronxe 2/3 in league - there's nothing to degrade.

Re: What Happened at Alameda Research

#93

Post by xiphias2 »

Semaphor wrote: post #52
SkyMarshal wrote: post #22

Earlier quoted context omitted.

Well FTX's competitors are not necessarily not fraudulent, especially their primary competitor Binance.

What fraud does Binance do besides evading U.S. regulations? note: This is an actual question.

I'm sure they are doing (or at least were doing) fractional reserve banking as well. They have their own token just like FTX, wihch is a bad sign. Maybe right now they are working on fixing it.

Kraken is one of the few exchanges that provide proof of reserves, which is basically just a Merkel tree of all user assets which users can use to check that the exchange holds their money. This is not just trivial to implement, there are open source implementations that exchanges could just use and prefer not to.

Re: What Happened at Alameda Research

#94

Post by TheOtherHobbes »

gasull wrote: post #23
Cthulhu_ wrote: post #5

Earlier quoted context omitted.

And worse: pretty much everyone was aware of it, but thought that because they were aware of it and everyone else is a schmuck, they could benefit from it. Some did, but only if they liquidated their holdings last year. NFTs this year was a microcosm of exactly that. Loads of people jumped on the bandwagon, buying up NFTs as they were released, but the whole thing collapsed again when it turned out the resale market…

NFT art was likely a bubble, not a Ponzi. Many investments are bubbles, but not Ponzis.

NFT art was a scam intended to create a bubble.

The art market itself is a bubble. Famous art is primarily used for investment, tax avoidance, and sometimes money laundering. Occasionally someone will hang it on a wall and look at it, but it's more likely to end up in storage.

NFTs were designed as a microcosm of the art investment market, sold on the promise of increasing resale value - like the real thing.

Of course that didn't happen. But some artists made a lot of money, some dealers made even more, and some people made significant savings on their tax bills.

Re: What Happened at Alameda Research

#95

Post by [deleted] »

williamcotton wrote: post #68
flanked-evergl wrote: post #9

Before or after they were bribing politicians for favourable regulation for FTX at the detriment of their competitors who were not fraudulent? https://prospect.org/power/sam-bankman-frieds-multimillion-d... > Crypto’s supporters in Congress are determined to ignore the massive gap in capacity between the two agencies; in fact, they likely understand that its incapacity is part of its appeal to FTX. A bill proposed by…

If the cup is half empty it's called bribing. Otherwise it's called lobbying. I don't know anything about the CFTC in particular but I'm familiar with the general idea of lobbying and the role it plays in a representative government. Elected officials have to interface with basically every industry in the country. How is any specific representative in a legislature going to have the knowledge required to vote on a ba…

[deleted]

Re: What Happened at Alameda Research

#96

Post by shawabawa3 »

gillesjacobs wrote: post #3

I like how OP opens smugly by calling the NYT article a fluff piece, then proceeds to immediately cite anonymous Twitter anecdotes as better sources. He's right about the specific NYT article not including much pertinent information, but they're a serious journalistic publication and have verification standards for sources.

The NYT article is a shockingly bad puff piece. It doesn't once mention fraud. Doesn't call out that Alameda borrowing funds from FTX deposits is insanely illegal

Makes it sound like poor SBF got unlucky and it wasn't his fault he recklessly gambled $8+B of customer deposits

Re: What Happened at Alameda Research

#97

Post by lawrenceyan »

trompetenaccoun wrote: post #70
lawrenceyan wrote: post #32

Earlier quoted context omitted.

The person who wrote this post is pretty well known in the crypto space. Not saying that what was written here is guaranteed to be accurate, but it's likely to be much closer to reality than what the New York Times put out. To be clear, I enjoyed Levine's commentary on the situation so it's not just because I dislike mainstream publications.

Never heard of them, I've been in the crypto space for many years. Their social media looks like it's run by a teenager and I'm not not being facetious, it literally reads like a 14 year old boy runs the account. The person also writes so many tweets they'd hardly have time for serious work. Over 90% are jokes, memes and rumors. https://nitter.cz/0xfbifemboy Not sure how this stuff makes it to the top on HN.

It's how you say, the "lingua franca"?

I myself greatly enjoy it and am happy to see it become more widespread, but that's mostly because I grew up immersed in the culture.

Re: What Happened at Alameda Research

#98

Post by shawabawa3 »

rkagerer wrote: post #49

One thing that stuck out at me in the NYT puff-piece was: Alameda had accumulated a large “margin position” on FTX, essentially meaning it had borrowed funds from the exchange ... He said the size of the position was in the billions of dollars but declined to provide further details. Did FTX use their pool of customer deposits to extend leverage to margin traders?

Alameda went underwater on loans and they transferred customer funds from FTX to bail them out

Re: What Happened at Alameda Research

#99

Post by wikfwikf »

andromeduck wrote: post #86
wikfwikf wrote: post #53

Earlier quoted context omitted.

The Ontario Teachers' investment is outrageous. They are charging middle-class people (by definition) good money from their retirement savings to make reasonable investing decisions and do due diligence.

They have 220B AUM.

Canadian teachers and retired teachers have $220b, which they paid into the plan from their not particularly opulent pay packets. Nearly $100m was given to a company based in a regulatory haven, which does not know to within $5bn how much money it has, and which was able to steal from its customers without any oversight.

Ontario Teachers were an anchor investor in a round which lots of less clueless people must have passed on.

Not sure why you think this is ok.

Re: What Happened at Alameda Research

#100

Post by H8crilA »

> When loans were recalled in early 2022, an emergency decision was made to use FTX users’ deposits to repay creditors.

Just so you know, this is a clear and obvious prison sentence in normal finance.

Also FTX itself was trading with customer deposits instead of just keeping them like an exchange is supposed to do, which is also prison in normal finance.

Matt Levine wrote a good piece on this debacle, and will probably write more. It is simply breathtaking, every paragraph evokes a massive "wat".

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