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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

#961

Post by sharkweek »

rheffern wrote: post #924
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…

I'll hop on here in a vain hope too. I want to buy a Theranos Edison machine and am willing to pay . If you know anyone that has one, parts of one, or anything like that, my email is in my bio and I am very happy to talk to you. I intend to take a small portion of it, melt it into steel ingots, and include it in 'Order of the Engineer' rings for myself and my colleagues who are also engineers. We are looking for phys…

Maybe a very long shot but in an earlier thread from a year or so ago about a similar topic, this HN user mentioned being in a Theranos facility during liquidation: https://news.ycombinator.com/item?id=29791488

Perhaps they’d be a good first step.

Good luck, that’d be a hell of a find.

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

#962

Post by AndreLock »

AndreLock wrote: post #469
mayankkaizen wrote: post #200

Earlier quoted context omitted.

I am 100% sure he must have siphoned off some sizable part of his net worth in cash or other non-crypto assets.

SBF personally owns a 7.6% stake in Robinhood worth ~$700m at the current price.

I stand corrected on this point. Bloomberg is reporting that SBF's Robinhood stake was apparently held through Alameda and may have been used as collateral for loans.

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

#963

Post by beambot »

jeffreyrogers wrote: post #872
beambot wrote: post #685

Earlier quoted context omitted.

Quick detour: expected value alone does not optimally maximize your long term outcome. Bet sizing (a la Kelly Criterion) is just as critical. E.g. if you had a weighted coin that was 50-50 odds with 3-to-1 payout, you wouldn't bet your whole bankroll on just one flip.

SBF said he disagrees with kelly bet sizing because his utility function is closer to linear: https://twitter.com/SBF_FTX/status/1337250702104485893

I'm not sure I follow... SBF seems to be talking about the marginal utility of a dollar. True, most people think of this value as logarithmic. However, Kelly Criterion makes no such assumption: It's simply the optimal bet size (as a fraction of your bankroll) that optimally maximizes your returns over successive game plays. If you over-bet, it's much more likely that you'll blow-out -- as SBF mentions in your link (and ironically, occurred to SBF & FTX!).

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

#964

Post by octodog »

matheusmoreira wrote: post #928
planetsprite wrote: post #917

For those who believe crypto and web3 is the future, has any comparable emerging technology been met with as many scandals and busts in so little time?

This has nothing to do with cryptocurrency. It's just an exchange that gambled away customer deposits and then was liquidated. They're banks. We've reinvented banks with all of the drawbacks and none of the benefits. This isn't the way cryptocurrency was meant to be used. We were meant to hold our money in our own wallets, not leave it in some centralized exchange so it can "efficiently" allocate the funds. People ke…

So why doesn't everyone hold their crypto in their own wallets?

If this keeps happening it speaks to the fact that the current system isn't well designed.

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

#965

Post by pvg »

tptacek wrote: post #832
saurik wrote: post #763

Earlier quoted context omitted.

I think the connections with the Effective Altruism community would make for a really amazing think-piece on conflicting ethics, circuitous reasoning, and moral rationalization.

I don't understand it. I haven't ever done a deep dive on EA, but at first blush it seems like such a benign, banal idea: direct charity money effectively and pragmatically. Sure! How does it end up so weird and broken?

How does it end up so weird and broken?

Rationalists, basically. It sound thoroughly glib but is the actual answer.

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

#966

Post by kinakomochidayo »

octodog wrote: post #964
matheusmoreira wrote: post #928

Earlier quoted context omitted.

This has nothing to do with cryptocurrency. It's just an exchange that gambled away customer deposits and then was liquidated. They're banks. We've reinvented banks with all of the drawbacks and none of the benefits. This isn't the way cryptocurrency was meant to be used. We were meant to hold our money in our own wallets, not leave it in some centralized exchange so it can "efficiently" allocate the funds. People ke…

So why doesn't everyone hold their crypto in their own wallets? If this keeps happening it speaks to the fact that the current system isn't well designed.

Because they don’t know about hardware wallets or they think it’d be safe to leave their crypto to the exchanges.

Most of the newbies getting into crypto don’t know what it means to hold your keys

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

#967

Post by bryananderson »

googlryas wrote: post #913
hn_throwaway_99 wrote: post #891

Earlier quoted context omitted.

This tweet thread by head of R&D at Coin metrics has a good hypothesis: https://mobile.twitter.com/LucasNuzzi/status/159012259020682... In summary: 1. Alameda essentially needed a bailout in the spring. 2. Alameda, though, also had a large chunk of FTT coming due in the fall that was basically part of the vesting schedule of the original FTT ICO. 3. So, FTX lent Alameda customer funds in the spring. 4. In the fall, w…

How would that play have had an effect after the bailout was repaid? I can see if there was the run while the ftts were loaned out, but why would it matter once they were returned?

It wasn’t “repaid”, the FTT was posted as collateral for the loans (customer deposits).

But still, should be fine at that point, right? The loans are nice and overcollateralized, what could go wrong?

Problem is that FTT is itself a bet on FTX. So if the news comes out that FTX and Alameda have these shady linkages, some of your customers will want to withdraw—and at the same time, FTT will fall.

Oops—the value of that collateral just crashed and now you don’t have enough assets to process the withdrawals.

Which makes FTT fall more, and more people want to withdraw.

It’s not like some fluctuation in Bitcoin price, where maybe you could get lucky and wait for it to come back up. FTT is just a bet on you, and you can’t process withdrawals, so why would that ever come back up?

And now you’re insolvent.

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

#968

Post by spaceman_2020 »

whoooooo123 wrote: post #851
spaceman_2020 wrote: post #807

I’ve defended crypto countless times here and I still believe in the ideology and the decentralized mission But man…what a clownshow.

Genuine question: which cryptocurrencies and/or crypto companies do you still believe in? Which part of the space still stands a chance?

Ethereum has a good developer network. It does work well as a decentralized, distributed compute engine. The costs are also coming down with new scaling solutions.

Paying for digital products (software, digital items) is hands down far better wtih a web wallet than a credit card.

Ethereum is probably the only crypto I can imagine holding for the medium to long-term

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

#969

Post by crypt1d »

adriand wrote: post #948
crypt1d wrote: post #518

Earlier quoted context omitted.

Correct. I've been in this world so long I forget 'normal people' don't really know all the acronyms :) more rumours are surfacing, including Yuga Labs (biggest name in the NFT space), Jump Crypto, Paradigm... this is basically our Lehman Brothers moment edit: looks like Yuga might be ok after all. luckily, sometimes rumour is just a rumour.

What's your take on this for the NFT market more generally?

Everyone's confidence is shook, so I expect a lot projects will be delayed due to lack of funding/interest, and volume will dry up significantly in the coming weeks/months. NFT market was never particularly liquid to begin with, so it might grind to a halt for a bit. But there's light at the end of the tunnel, I'm sure. With regulators focusing their eyes on tokens and exchanges, NFTs might get a bit of a revival some time down the road. Especially if money starts flowing into it again looking to escape the regulatory hammer.
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