I’ll admit I’m old and not a whippersnapper with a digital wallet. I still discount cash flows on my 12c.
What’s going on with FTX? Explain like I’m 5. I loosely understand crypto but have sided with Buffett after he called it the currency of the cartel.
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[PrivateTechquity 🚀GME+BBBY🚀]
Have tried posting summaries here but the posts just get removed and deliver me new user violations from the wonderful, smart, talented, definitely not biased new mod team.
See the crypto forum:
A Comprehensive Breakdown & Discussion Regarding The Near Instantaneous Collapse Of FTX
The long and short of it is, biggest ponzi scheme in crypto history that will be taking 130+ other related companies down with them, with potential knock-on effects in the "real" economy depending on who all of the counter parties are to their many highly leveraged derivative trades that were all collateralized using their own self-printed token called FTT. Throw in a dash of political conspiracy with this guy being the 2nd largest donor to the Democrat party and publicly committed to donating another $100m-$1b to them through 2024 and being deeply involved w/ moving funds around Ukraine + the WEF. And it all collapsed because the fat turd at the head of the snake was stealing customer funds (currently has an $8b+ hole in his balance sheet according to latest reports) to cover the losses that his certified autistic girlfriend generated running his unregulated crypto hedge fund. All kicked off by a bank run caused by CZ (Binance founder) tweeting they were selling all of their FTT (they had invested $100m seed money into FTX, sold out for $2b+, and got like half of that in FTT) after a coindesk/cointelegraph article came out w/ leaked balance sheets for Alameda (the HF) showing that they were insolvent.
Buffet was right, it was/is absolutely a cartel when you look at the big players. Tons of self-dealing, sending money between each other days before they have regulator checks where they show that they have enough collateral to cover deposits. This thing is an utter mess but fuck if it's not fun to watch it all burn.
Edit: The opening to this video w/ Larry David just killed me.
This shit is genuinely insane. Thanks for your thread linked above. I’m glad I was an old head and listened to Warren and Charlie when it came to crypto
I love warren buffett so much man he's the grandfather figure who you can always turn to for advice
So, what are the consequences going to be moving forward?
Given the donations, are specific names going to be reported on who FTX donated to?
I noticed that political affiliation are involved, what kind of affect will this have with the Democratic party?
Ultimately, can the people who invested get at least some compensation back?
This is utterly devastating.
Politicians who directly benefitted from FTX donations in some way are inevitably going to come out super in favor of regulating crypto, getting their muggy government hands into it so they can cut more deals like they did with SBF and find ways to steal more wealth from the masses. You know, the usual.
I don't think anything needs to be "reported", it's all public record just google it.
Seeing as how the Democrat base has now voted in a dead person + 2 people clearly suffering brain damage from strokes that impair their ability to even speak properly in addition to this latest overperformance in the mid-terms amidst record low approval ratings, probably nothing. Republican establishment are largely cowards as well, didn't take the Senate, or approach anything remotely close to a veto-proof majority in the House so yeah, probably nothing.
In my opinion, not a chance. If you had anything on FTX it's time to write it to a total loss. No chance any customers recover a dime before investors, and they're already marking their books to $0 (see Seqouia).
noone forgets to mention the $40m to dems, but also worth nothing the $24m spent on republican campaigns by FTX digital markets CEO, plus millions more in donations from affiliated pacs
Of course he's going to donate to establishment Republicans, the finance elites are all bipartisan in that regard but to pretend he wasn't especially connected to Democrats is what's dishonest. Both of his parents are Democrats, his mother founded 2 different Democrat advocacy organizations, he is Biden's 2nd largest donor behind George Soros himself, and he explicitly committed another $100m-$1b to Democrats through 2024.
Anyone that is dealing with regulation is going to donate to the uniparty on both sides. But he is through and through a Democrat. For god's sake the fat turd was in like a 7-way poly relationship and is clearly a virtue-signaling chimp, there's no other party for him. Him being smart enough to know he needs to grease palms on both sides of the isle doesn't change that in the slightest.
I called crypto the new tulip in 2014 or something and got berated by my peers who said it’s unhackable open source technology blockchain audit tail that can’t be tampered with.
I hate it when others are scammed. I don’t have the heart to follow up and see if they are ok.
Also, I recall reading FTX spent $300 million dollars on advertising expenses. It's insane.
I think that was just the super bowl ad. There's a lot more. I know some crypto influencers who think estimate their budget for just YouTube was >$150m. Plus super bowl ads, plus major celebrity sponsorships, plus naming rights to a stadium in Miami, and who knows what else.
Don't they have an arena naming rights deal? Those get VERY expensive
Plus F1 sponsorship for Mercedes F! who were quick to wipe FTX from Lewis and Georges suit/car/everything once this collapsed, rightfully so.
>I loosely understand crypto but have sided with Buffett after he called it the currency of the cartel.
Once again the old f*ck was right...
Legitimately curious as well and I fully admit I do not know how these things work, but the Mercedes F1 team has removed the FTX logo/sponsorship from its cars. Does Mercedes have to return some sponsorship money to FTX or is there usually a contract stipulation that allows them to unilaterally cancel the deal for cause?
I believe anyone who got paid gets to keep it, I know that's the case for some influencers who got high 5/low 6 fig sponsorship deals on YouTube so I can't imagine Mercedes has a worse deal. They rendered a service and were compensated for it, it's not their problem that the buyer went and effectively committed suicide and won't be coming back to receive additional agreed upon services.
Yes. I'll add that any real brand like Mercedes will have clauses that would entitle them to damages if the brand does something really embarrassing that spills over. If FTX actually had any money to pay out, I could see Mercedes suing them. Of course, that won't actually happen. But can be damn sure they wont be giving anything back.
Honestly I'm shocked that any "establishment" brand was willing to be connected to crypto. I'm not even opposed to crypto itself - I've held BTC as an investment and would again under the right circumstances. But the broader ecosystem is so slimy and desperate . . it's like casinos meets used car dealership in terms of the overall vibes around it.
Given the situation, I'd have to imagine there's a morality clause in their contract that lets Mercedes out and remove any connection. And like PrivateTechquity said, they'd get to keep the cash from services rendered up to that point.
The billionaire CEO of Citadel, Ken Griffin, explained just today at a conference in Singapore why moving money in this way isn’t allowed in traditional finance.
“There’s no doubt that customer assets were used to make investment decisions in favor of FTX’s shareholders, which didn’t work, at the expense of the customers. That’s not permitted in American broker dealers. You can’t just use your customer assets to go engage in proprietary trading,” Griffin explained in an interview with Bloomberg News.
He's making a redundant statement. FTX has it in their own agreements that they don't do things like this. This wasn't a matter of regulation, SBF is just a straight up criminal. When someone is already clearly and knowingly breaking the law only an idiot truly thinks "If there had been ANOTHER rule there THAT would've stopped him."
It's already been confirmed by insiders at Alameda that he personally had a backdoor built in that allowed him to move customer funds between their accounts and Alameda's w/o triggering their own internal compliance checks. SBF was traveling the country and testifying in front of congress about how they need more regulation, his girlfriend's father was the current SEC head Gary's boss back when he worked at MIT. Citadel themselves have been fined for breaking the law 60+ times and have even been banned from other country's for use of market manipulation tactics. The only reason he's around is because he's a massive political donor to the uniparty establishment (aka exactly what SBF was doing). It was one of his senior guys that came over to help run FTX's operations, and he was curiously given an investment from Sequoia that was eerily close to the amount that FTX reinvested back into Sequoia w/ Gary Wang. He who lives in glass houses.
I have a distrust of KG for many reasons and believe the things he says or actions he takes are to line his own pocket in a way. Being from Chitown, I have heard stories of how he treats his employees which are not pleasant.Solid post yet again.
What law firm would allow that? This is shady to high heaven. I can only guess this is somehow legal in the Bahamas.
It isn't an issue of any one group doing something illegal. The asset class as a whole needs to have a wave of legit operators overtake the capital flow from the scams. That takes regulatory oversite. Many VCs were outright scamming people as well by investing in the platforms on the equity side and getting coin allocations and dumping those at the ICOs to cover their risk.
Crypto as a fundamental system is still relatively sound. This is just the shakeout cycle that every new asset class goes through. Stocks, Bonds, Junk Bonds, CDOs, CLOs, MBSs, etc. They all had an era of complete wildwest where scams were more common than actual assets. Regulation came in and the assets ended up being even bigger than they were during the boom of scams.
Never put your crypto on ANY exchange. Exachanges =/= crypto.
The problem is more bad actors who use crypto in nefarious ways. There are a ton of shit coins also. Essentially, users weren’t buying the spot coin they were buying a receipt for the coin, an iou. So they were basically lending free money, which was used by FTX illegally to invest in other shit coins. When those shit coins lost value and people started to catch on and withdraw coins, FTX faced a liquidity crisis and couldn’t redeem the promised amount it owed. That’s why they say not your keys not your coins. You have to withdraw from exchanges asap. Only use exchanges to buy/sell never to hold.
How did these exchanges work?
Do you "deposit" your eg 1 BTC, it becomes a number on a screen then you "trade it" for eg ETH and FTX tells you now you have X number of ETH....did FTX actually do those transactions or just tell the customer "you now have X ETH" and then only do the actual transaction if someone tried to do a withdrawal?
Ie were the transactions in any way / % faked due to the movement of customer funds?
Dunno if Im explaining it right...
How is fractional reserve banking to blame for a random cryptocurrency scam?
Been reading this thread periodically to see it as it updates. This is just a fucking fascinating story to watch unravel. The documentary will be wild.
I found this interesting. Enjoy the read:
Twitter: SBF "Tries to Explain Himself"
The first day motion is really interesting. John J Ray III summarily destroyed the credibility of any FTX leader / employee with his explanation of how they fucked up so badly. They had virtually no control over billions of dollars of complex assets. I’m surprised they didn’t fail earlier
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