We will not pursue the potential acquisition of FTX - https://news.ycombinator.com/item?id=33537821 - Nov 2022 (15 comments)
Next stop for FTX is bankruptcy.
Does FTX.us have any exposure to FTX.intl? They're not supposed to. But do they? The SEC and CFTC are now investigating to find out.[1] Bloomberg: "US financial regulators are investigating whether beleaguered crypto-exchange FTX.com properly handled customer funds, as well as its relationship with other parts of Sam Bankman-Fried’s crypto empire..." In other crypto collapses, we've seen "assets" that were actually loans to affiliated parties. Loans that became worthless.
At FTX's web site, "https://ftx.com/intl", there is no mention of any problems. Typical.
[1] https://www.bloomberg.com/news/articles/2022-11-09/us-probes...
Edit: Fair enough, thanks for the input repliers! I thought DD was a much slower event to prepare this information and get legal stuff set up with NDAs etc..
"Sure, we have a notional $1 billion in a combination of junk bonds that have already crashed to a market value of $25 million and other cryptocurrencies worth another nominally $15 million as long as we never try to actually sell them, and we have $1.4 billion in concrete dollar liabilities."
Numbers completely made up, just to be clear.
You can investigate that until you're blue in your face and apply all the nuance in the world to it, that's never going to make any sense.
Also, I'd say Binance is well aware of the message the speed is sending. I don't think that's a mistake. This sort of signalling in "the metadata" of a message happens all the time. You can decide whether or not you believe it.
Honestly, with all the market info. that Binance has on their hands, I'm sure they already knew where to look at, LOL. They were just having fun with SBF.
CZ: “Can I see your balance sheet? Oh, it says here you have $10B in assets and $16B in liabilities. Welp, good luck finding a buyer, I withdraw my LOI to purchase FTX”
It would take minutes to hours to figure out the state of things at FTX.
I'd guess the geniuses at Alameda made sure to accomplish that already.
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1: https://twitter.com/cz_binance/status/1590055819416330240?s=...
But even if they do produce that, it can only show the asset side if the balance sheet.
Quite a lot of financial failures are a result of off-balance-sheet liabilities.
They were insolvent way before the crash.
At least 80% of the (lets charitably call it a) market is now concentrated in one place.
This is the sad part IMHO. A guy who should be regarded as enemy of the people is instead regarded highly just because they happened to win a lottery.
Turns out FTX wasn't making billions. It was losing billions while pretending to be making billions.
Good luck to you all!
In fact, the reason Madoff got so large was b/c he was one of the few who convinced most early investors not to cash out.
Implying that smart money is 'being early to the Ponzi Scheme' is certainly an outlook on life, IDK if it's a particularly good one though.
Would you call Peloton's VC backers "ponzi schemers"?
But 2021 was a time when the casino was giving away money for free. NOT gambling was the wrong move. Sitting on a high horse did nothing for anyone, except maybe bask in the schadenfreude when the thing invariably collapses.
Meanwhile lots of people, including me, made life changing money.
> I managed to cash out
> I avoided all centralized exchanges
> Almost all my trades were on decentralized exchanges
Only the entry and the exit trades were on centralized exchanges then right?
Are there any examples of safe and legal decentralized fiat on/off-ramps? I've heard of "Bitcoin ATMs" (I suppose that would count as centralized though), and I've read stories of people getting into trouble for using P2P services like "Local Bitcoin". It all seems a bit sketchy.
I am sure you're aware that your $$ come from somewhere. Net positive for them? Not so much.
Wow, that was unexpected. Taking criticism for boasting about gaining money in a gamble (you said luck was involved) and then weaseling out....
Complex sounding technical mumbo-jumbo delivered with supreme confidence and seeming internal consistency is how you convince the plebs to invest their life savings in various forms of crypto.
0.1% understand the original underlying technology 0.9% understands the applications possible to be built on top of it 99% are following the 1% and writing governmental and financial policy, and voting with their wallets.
I wish I could say we will look back and shake our heads at it like we do today at Tulip Mania, but I suspect we're watching the birth and childhood of a new religion. Crypto isn't going anywhere for the rest of our lives, and just as we have to keep vigilantly fighting against Scientology permeating tax policy, or religion in general always attempting to undermine secular society, Crypto will continue to be a thorn in society for a long time.
Take away the hyperbole and technical mumbo jumbo interlaced with the financial mumbo jumbo, and cryptocurrencies and blockchain are less interesting than the latest PostgreSQL update.
But it's that mumbo jumbo that separates ordinary people from their dollars.
2) A lot of people learned about this stuff because it is a very meme-able concept: mathematicians will upend the entire global system of power with... math. The kids who got their lunch money stolen in elementary school really gravitated to it
Uh, go visit El Salvador. Every MacDonalds, every Starbucks, and tons of local businesses accept "the largest one." That's because bitcoin stands apart, in terms of its real decentralization, and therefore its independence and utility. Give it time, and it will become far more useful than it already is. The dollar may eventually refer not to a specific weight of gold (that's what the term 'dollar' originally meant), but to a specific number of satoshis.
So likes 33% more expensive?
Or is there some system that el salvador developed that acts as a clearinghouse?
Feels like the origin story of BNB chain to me
USDT: https://app.aave.com/reserve-overview/?underlyingAsset=0xdac...
USDC: https://app.aave.com/reserve-overview/?underlyingAsset=0xa0b...
Earns goodwill and users while the size of the bill is smaller.
Not sure how it would work from a legal standpoint but unfortunately 6 billion is too much (and I had a majority of my net worth in FTX as a trader)
They may be exterritorial to the US. So was Silk Road.
The reason partial deposit insurance works in commercial banks is that the ground rules are set from the start.
As a trader myself, this lesson is part of your risk management. I have multiple accounts with amounts that I wouldn't cry if they went to zero. I trade them together, and if AMP decides they hate me because I am too tall, it doesn't change my ability to trade until that issue is resolved.
Edit: flagged??? huh...
My guess is that binance just wants to take down a competitor. They publicly started the FTX bank run by announcing they were going to dump FTT, after all.
Binance has its own dollar based stablecoin, BUSD.
I truly underestimated human greed where making 7 figures of profit A DAY is not enough and you still gamble with user funds.
Luckily I’m still young enough and don’t have a family and I am confident I can rebuild but man, it definitely stings.
This is the mind boggling part to me and many others like you. How do you mess up this bad when you were on top of the world and a billionare before age 30? Was it really not enough?
Not sure which exchanges are sane anymore these days, you can rule out pretty much anything with it's own token as being too high risk, including Binance. Coinbase went too big too fast and we saw extreme greed with them going public. Kraken seem cautious overall, taking fewer risks and doing things the right way?
Hard to say for sure.
- Double Tops btc in november 2021.
- Interest rates at record lows worldwide.
- Early signs of inflation > Rumors of fed raising interest rates & rumors of quantitative tightening.
- End of covid checks and government bailouts.
I also suggest you reading Financial Times and especially its comment section which is often more insightfull than articles themself... WSJ optional, but its comments section is trash (politicaly and economically very biased). > google bypass firewall.
I also suggest you to disconnect completelly from "assets" built and backed by hashed numbers (once you read "History of Financial Speculation", it will become clear).
Good luck.
There is a reason why no one is acquiring ponzi schemes.
I am concerned about their near new monopoly. But alleging that Binance is involved in these money printing shenanigans is simply baseless.
Cryptocurrencies were meant to be used in a decentralized manner. These centralized pseudobanks are everything that's wrong with this space and I hope they do get regulated.
Normal exchanges don't go bust all the time, it's not rocket science.
Crypto entities haven't earned that privilege yet, and are quite commonly openly antagonistic to any regulation at all.
Unless Binance does this as a unilateral act of goodwill, it would be difficult for them to acquire FTX in a way that pays out to customers while stiffing lenders and shareholders.
But imagined value that, if you play your cards right, you might be able to convert into real dollars. Leaving someone else with the imagined value instead.
Do people speculate on it more than they probably should? Sure. But at the heart of the stock market is a system of "I just sold a physical thing for $1000, and since you own the stock you get $0.00001 of that". At the heart of crypto is "my computer did some math, so... money".
Even if a company is loss making and doesn't pay dividend, there will be someone who would be interested in acquiring the company to actually run it and not just just to flip it to a bigger buyer at a later date. That is why Musk paid $44B for Twitter. Because after all is said and done, it is still the most influential social network amongst the people who matter. Owning it has a value for someone like Musk. That value comes from the activity that Twitter conducts and not the demand for its shares.
In crypto value comes only from the demand. In stock, demand comes from the value being generated by the company.
Companies like Coinbase are selling turtles all the way down, then.
you can sort the landing page here by 24H volume for a quick glance, or you can check the exchanges tab for more detail: https://www.coingecko.com/
We all know that this can happen to centralized exchanges and using a DEX will protect your assets (the ones that don't go to $0 on their own like LUNA and FTT).
In the past, trading was always much more expensive due to the blockchain overhead compared to trading on a CEX, not to mention liquidity problems with smaller alts and DEXs.
Is this still the case? Do folks day trade using DEXs for small amounts or are they still limited to longer-term trading due to the overhead?
For some trading pair likes ETH/USD it is actually cheaper to trade on DEXes (Uniswap v3) where you get 0.05% fee as opposite to Coinbase that charges you 0.6%.
The events like FTX should prod the markets more towards DEXes. Also now there are futures DEXes available like dYdX, Perp.fi and others making it possible for more professinal trades to utilise DEXes.
I think the only synthetic, or fractionally backed stables left are Ohm and Frax. They do not have any significant market share.
Most volume is in
- USDT/USDC pairs
- ETH pairs
- BNB pairs
I run a website that tracks this stuff:
For a more advanced use of the XRPL DEX there is Sologenic[2] which is build on top of the XRPL DEX.
[1] https://xrpl.org/decentralized-exchange.html [2] https://sologenic.org/trade
*Free as in no one earns money from your usage. There is a tiny fee burnt to prevent spam for each offer/transaction. A typical fee is under $0.0001.
Even leveraged trades are very efficient on a decentralized platform like GMX.
I'd like an answer to this too.
I've been dollar cost averaging into BTC and ETH since the prices are low. But at the same time every exchange I see has fees that eat a large percentage. I know Coinbase allows you lower fees if you're trading big money each month, but I'm not doing that.
Interesting, I would have thought that Centralized exchanges would be cheaper and faster.
Cheaper because there are no block chain transaction fees. So assuming a DEX and CEX can charge the same fee structure, then CEX's should win as there is no exchange fee added to each transaction.
On chains like ETH that matters alot if you trade alot.
And same for speed. On a CEX a trade is a database update, on a DEX its a blockchain update. Hard to see how the later can be as fast as the former.
it also occurs on Ethereum Layer2's and other EVMs
DEX volume seems to be around 10-20% of CEX volume. But CEX is easier to overstate as it's cheap, sometimes commission-less. While DEX volume always carries a cost.
I fully expect CZ to say that the hole was too big and that customers are now suffering due to FTXs recklessness
Binance just has first mover advantage; as a result of inventing this "my coin can just be printed forever" crypto exchange model, they have more use and $$ which gives them a better cushion. But it's still only a cushion.
When you are the biggest shop at the fair you wanna keep the festival going as well.
This reminds me of 2008, when companies were trying to get "rescued", such as Lehman, but Lehman couldn't make a compelling argument why they were worth acquiring, once the accounting books were opened.
They are the biggest exchange now, they gotta look like they care and tried to help so they can attract all the ones who need a new home
You still dont get crypto dinamics, is not about the tech, is about how much money you can extract from people trusting you
Binance or CZ paid never paid face cash value for any those tokens, simple as that.
And most important, he hasn't purchase FTX. So it was just tweets and have your PR team contact major crypto news sites
So far it has cost them a couple of tweets.
Worded like that you make it sound like that's a lie.
CZ didn't declare them insolvent. He just made the fact public.
Binance was the little boy.
”The survival is not a zero sum games. For banks to survive it is beneficial to other banks to survive as well.”
Maybe I'm missing something but isn't Binance just insuring funds... with their own coins? (ie. what Alameda basically did with FTT tokens)
1. Couldn't Binance be subject to the same rundown FTX just experienced? / How could Binance realistically rescue FTX at all?
2. Was this offer ever serious?
[1] https://academy.binance.com/en/glossary/secure-asset-fund-fo...
[2] https://bscscan.com/address/0x4B16c5dE96EB2117bBE5fd171E4d20...
IMO Binance has billions of their own cash reserves (not user funds), based on their activity in the last year (acquision of coinmarketcap for 0.4B, commiting $1B to boost crypto projects and companies etc.. this must be a fraction of their overall worth and in that case, $6B should also not be a huge issue, especially since they can get a lot of goodwill and millions of FTX users).
Binance collects billions of dollars from fees every year and also get money from their external investments (e.g. Binance invested in FTX and sold their shares last year for $2B ($1.5B and $0.5B FTT)).
Right now it is very very profitable for them. They can earn interest rates for free, without a high risk.
Cryptos seem to be: 1) a tech stock 2) a "fair weather" asset.
The political cost of being in a depression is far too severe for those in power to not prevent it. They are armed with far more tools and knowledge today than 1929. This will be merely yet another recession in a long history of human society oscillations.
>Cryptos seem to be: 1) a tech stock 2) a "fair weather" asset.
I do agree with that, but it's a result of crypto being played by the same people who played tech stocks and fair weather assets. The OG evangelists who saw it represent the antithesis of the current world order have pretty much disappeared as crypto picked up attention from VCs.
On the contrary, the assumption seems to be on your part. You say "it's just the beginning" but the Fed has already been signaling that they will slow down and then cease the interest rate increases over the next several months.
Do we now know that:
A) FTX were not segregating those client funds;
B) They were speculating with them after SBF said “not even invested in treasuries”;
C) Seperately, they were leveraging up FTT on their balance sheet.
FTT price fall seems to be the catalyst, but this shouldn’t impact segregated client funds unless they are also being used in funky ways, right?
Surely one of the above is bad enough, but all 3 is an astounding abuse of trust no?
I have defended Crypto and even dabbled in the industry for a while, but this is shocking to find one of the blue chip names losing client funds.
Entertaining? Absolutely.
Shocking? Not to anyone who’s been paying attention.
FTX.us is either OK or some people are going to jail. Too soon to tell which.
Edit: FTX Japan has halted withdrawals too.
Steel yourself for future challenges.
Sounds like liabilities exceeded assets
When the housing bubble collapsed you had millions of people who probably didn’t know the risks (because everyone with a voice was saying housing prices never go down) and politicians cared a whole lot.
I’d say even if the whole crypto craze went bust overnight all you’d get is a collective shrug.
Is entirely fallacy/fantasy when people talks about shorting on crypto market.
You can't win shorting actual crashes in unregulated markets, the only way u win shorting in crypto is that you were lucky to guess what a whale/org was doing at the same time so pretty much a russian roulette
Marketmakers are not legit and all the movements are pretty much fabricated, its just not regulated and its obvious
> Is entirely fallacy/fantasy when people talks about shorting on crypto market.
What do you mean by this? I shorted FTT the second I saw the tweet, and then I shorted the entire cryptocurrency market. I successfully made money, so how could it be a fantasy?
Tell me who at the same level of insider info, gonna OTC borrow you millions of FTT for you to short, when most likely that person/entity owning millions of FTT is already trying to protect their value?
You have to remember that when you short and you bet for price going down, the other side is betting for price going up or at least for the price to stay at the same levels, the person borrowing you has to be constantly doing DD to be sure that its the right moment to borrow the asset, and its pretty obvious that someone holding big amounts of FTT was/is very aware of whats comming
if I was an OTC shorter and had millions of FTT and you see Binance CEO comming to you to short, I inmediatly said no and cashed out those FTT instead of shorting, cause clearly at those levels there is certainty of what they are doing.
Work at a trading firm and we saw the entire thing play out, but we're algorithmic so we weren't set up to take advantage.
Though if you're a small player, there's a lot of opportunity here. Some times, the difference between the price for liquidation and the price you can get somewhere else is high. We saw one dude make a quick $300k through a flash loan. The market isn't fully efficient yet, so this opportunity was available for 10 min before someone took it.
but when you have to guess stuff about the crypto market, you literally have to think the worst things or the best things and you will be right
my guess here is simple, CZ has liquidated everything that can be liquidated that doesnt make him look bad, hes deep in the very same business than FTX/Sam was, he doesnt need to look the balance sheet, chances are his balance sheets are similar or worse haha
So he probally liquidated longs if any, he probally did OTCs with other tokens/assets and just kept the FTT as a PR move to pretend he was a nice guy, anyways having an amount of $ "lost" by a token that was never worth anything is still 0 lost, he most likely got those tokens in exchange for other tokens worth nothing, or during ICOs stage so pretty much hes not losing any cash even tho you will read people saying how much he lost, remember all of that is nominal value, not real cash value at the end, the very same reason things are falling now.
https://www.washingtonpost.com/politics/interactive/2022/top...
Michael: Sam Bankman Fried is why I'm calling https://twitter.com/sbf_ftx/status/1514588820641128452 https://www.vox.com/platform/amp/recode/2021/3/20/22335209/s... https://ftx.us
Elon: ??
Elon: I'm backlogged with a mountain of critical work matters. ls this urgent?
Michael: Wants 1-Sb. Serious about partner w/you. Same security you own
Michael: Not urgent unless you want him to fly tomorrow. He has a window tomorrow then he's wed-Friday booked
Michael: Could do $5bn if everything vision lock. Would do the engineering for social media blockchain integration. Founded FTX crypto exchange. Believes in your mission. Major Democratic donor. So thought it was potentially worth an hour tomorrow a la the Orlando meeting and he said he could shake hands on 5 if you like him and I think you will. Can talk when you have more time not urgent but if tomorrow works it could get us $5bn equity in an hour
Elon: Blockchain twitter isn't possible, as the bandwidth and latency requirements cannot be supported by a peer to peer network, unless those "peers" are absolutely gigantic, thus defeating the purpose of a decentralized network.
Elon: ["disliked" "Could do $5bn ..."]
Elon: So long as I don't have to have a laborious blockchain debate
Elon: Strange that Orlando declined
Elon: Please let him know that I would like to talk and understand why he declined
Elon: Does Sam actually have $38 liquid?
Michael: I think Sam has it yes. He actually said up to 10 at one point but in writing he said up to 5. He's into you. And he specifically said the blockchain piece is only if you liked it and not gonna push it. Orlando referred Sams interest to us and will be texting you to speak to say why he (Orlando) declined. We agree orlando needs to call you and explain given everything he said to us and you. Will make that happen We can push Sam to next week but I do believe you will like him. Ultra Genius and doer builder like your formula. Built FTX from scratch after MIT physics. Second to Bloomberg in donations to Biden campaign.
Just pure Machiavellian outcomes
Bailouts are good when a private company does it (with money slurped up from sovereign wealth funds and pension plans)
/s
Leaving only more resilient ones in their wake
Let me know if you know a word for that
His seminal work reads like a groveling apology masquerading as advice to the politicians who had banished him.
IMO, the word works fine for describing someone who gambled on their own dubious advice and lost. Even moreso if the loss stems from a cyclical event, like the boom/bust nature of financial institutions which let the Medicis buy their way to political power in the 1400s.
Not as fun admittedly as gambling, but commas are commas. Wealth is sticky is this comment’s thesis.
https://www.bloomberg.com/news/articles/2022-11-09/us-probes...
[1]: https://www.cnbc.com/2022/05/13/robinhood-shares-jump-after-...
Where do you think it went?
They pumped the coins on the way up - Google willybot - which sucked retail money in. The smart exchange fraudsters cashed out on the way up. The uber-greedy exchange fraudsters held on thinking they could get more $$ if the price goes up, only to see that the price didn't go up, causing balance sheet holes which result in their demise a la ftx
He very much wasn't. Probes had been ongoing for months [1].
[1] https://www.bloomberg.com/news/articles/2022-11-09/us-probes...
There's a previous submission from a different source: https://news.ycombinator.com/item?id=33535015