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(CNBC)   FTX has over one million creditors who sent their funds to money heaven   (cnbc.com) divider line
    More: Followup, Debt, Bankruptcy, Long and short scales, U.S. Securities and Exchange Commission, Names of large numbers, cryptocurrency exchange FTX, Million, Finance  
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585 clicks; posted to Business » on 15 Nov 2022 at 9:35 AM (12 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-11-15 8:59:29 AM  
"Our money's gone to heaven, Mr. Terwiliger."

Cousin Merle ain't been quite right lately
Youtube RDLUfMM0z9I
 
2022-11-15 9:29:07 AM  
The media is going to plow that list and totally humiliate anyone who "invested."
 
2022-11-15 9:29:32 AM  
Wait for the bounce.
 
2022-11-15 9:32:43 AM  
Buy the dip!
 
2022-11-15 9:36:14 AM  
And not a tear was shed for any of them.
 
2022-11-15 9:40:23 AM  
The real cryptocurrency was the friends they made along the way.
 
2022-11-15 9:44:14 AM  
I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.
 
2022-11-15 9:45:42 AM  
That's sad.

People that learned the term "fiat currency" from a Ron Paul book when they were in high school are going to lose money?

Re love ution or whatever that bumper sticker was.
 
2022-11-15 9:52:37 AM  
Banks are not your friend.
 
2022-11-15 9:54:41 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


The basic idea was that it was an electronic currency that you could use to pay your drug dealer without necessarily leaving a trail back to you (or at least, no more of a trail than cash). It failed to take into account the willingness of your drug dealer to accept crypto though - so a lack of cash or desirable ass was likely to leave you with no grass.
 
2022-11-15 9:56:48 AM  

Rapmaster2000: Banks are not your friend.


Credit Unions are.

*soap box*
If you have a bank account in BoA or Chase or whatever, STOP IT!

Join a credit union. Please.
 
2022-11-15 10:01:17 AM  

DannyBrandt: Rapmaster2000: Banks are not your friend.

Credit Unions are.

*soap box*
If you have a bank account in BoA or Chase or whatever, STOP IT!

Join a credit union. Please.


Credit Unions are not your friend.  One time I was having a beer with a credit union, and it stole my girlfriend.
 
2022-11-15 10:05:13 AM  

Rapmaster2000: DannyBrandt: Rapmaster2000: Banks are not your friend.

Credit Unions are.

*soap box*
If you have a bank account in BoA or Chase or whatever, STOP IT!

Join a credit union. Please.

Credit Unions are not your friend.  One time I was having a beer with a credit union, and it stole my girlfriend.


The cred *burp* the credit union, hang o ...

Uff, what?

Oh, her? Oh, man.
 
2022-11-15 10:06:39 AM  
The most horrifying aspect of this whole ordeal is the fact that Sam Bankman-Fried farked alameda digital's CEO Caroline Ellison.
 
2022-11-15 10:08:33 AM  
Fried donated to the right people.  We are gonna have to bail him out.
 
2022-11-15 10:12:23 AM  
Who would have thought that spending real money to manage a product made from fairy dust and unicorn farts was a bad business model?
 
2022-11-15 10:12:52 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


Chuck E. Cheese tokens for junkies and sex offenders.
 
2022-11-15 10:14:16 AM  
If you are under investigation and feel the need to tweet out "10) [NOT LEGAL ADVICE. NOT FINANCIAL ADVICE. THIS IS ALL AS I REMEMBER IT, BUT MY MEMORY MIGHT BE FAULTY IN PARTS.]" that is a sign that you should not be saying anything without an attorney present.
 
2022-11-15 10:15:45 AM  

DannyBrandt: Rapmaster2000: Banks are not your friend.

Credit Unions are.

*soap box*
If you have a bank account in BoA or Chase or whatever, STOP IT!

Join a credit union. Please.


My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.
 
2022-11-15 10:18:44 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.
 
2022-11-15 10:30:24 AM  

Mr. Tweedy: My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.


I'm all ears. Not joking, not trying to be funny. Anyone reading this thread would love some advice.
 
2022-11-15 10:36:07 AM  

RealXavori: Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.

FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.


So basically, collectible Nascar spoons.
 
2022-11-15 10:36:20 AM  
Could I interest you in this dubious investment plan which is almost sure to fail or would you like to keep some money in your bank account?

I went for the latter.
 
2022-11-15 10:38:03 AM  

RealXavori: Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value. The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit). The key thing tho is that these currencies are free to move around and transparent in how they work. This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.


I'm sorry, man, but the amount of self delusion in this "explanation" is melting my screen.

I wish you luck that you're not stuck holding the bag when the party stops.
 
2022-11-15 10:39:41 AM  
I'm a French model.
 
2022-11-15 10:41:50 AM  
media.tenor.comView Full Size
 
2022-11-15 10:43:42 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


i.redd.itView Full Size
 
2022-11-15 10:49:05 AM  

DannyBrandt: Mr. Tweedy: My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.

I'm all ears. Not joking, not trying to be funny. Anyone reading this thread would love some advice.


I don't know that anyone has any advice. I switched to Chase after I started getting nickled and dimed by my local credit union, and their behavior more resembled an regular bank that's not part of a franchise. (the bastards were doing stupid things like making me pay for rolls of quarters because I had to do my laundry in laundry machines)

Looking around at other credit unions, I didn't see one other anywhere close to me that had different policies or better interest rates.

Chase, on the other hand, may be a blood-sucking corporate behemoth, but their local branches have always treated me well. At the consumer level, I've interpreted that their interest policies are all based around competing for credit card business, as they give crap for interest rates on saving, but giant (1-5%) "rewards" on spending. Their online services are waaaaay better too. The end result is that I'm always behind, because my expenditures don't compound like interest does, but that just means that I have to look at other vehicles for savings investment.

If another bank or credit union were able to compete with them, I'd happily consider switching.

/and no, not one of those "online" banks
 
2022-11-15 10:51:59 AM  

imashark: RealXavori: Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value. The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit). The key thing tho is that these currencies are free to move around and transparent in how they work. This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.

I'm sorry, man, but the amount of self delusion in this "explanation" is melting my screen.

I wish you luck that you're not stuck holding the bag when the party stops.


I think he is making the distinction between "crypto created that can then only ever be traded" and the "crypto created as a reward/payment for participation in the system"

Ether is still a cool AF data platform, forget the money part of it
 
2022-11-15 10:54:58 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


The only complicated thing about crypto is the system of mining tokens.  The blockchain is just a distributed database.  The tokens on the blockchain are just that - tokens.

The thing that is confusing for most people is why a Bitcoin should cost $70,000 or $15,000 or $1.  There is no good answer to that question.  Bitcoins don't do anything and they're not going to do anything.  They have no productive capacity.  They're just tokens.  Their existence actually consumes resources and produce nothing.

A Bitcoin costs X because someone is betting they can buy it at X and sell it to someone for X+ later.  Why would a person want to pay X+ later?  There's no good answer to that.

Some people have this idea that when (still hasn't happened) Bitcoin is widely adopted as currency, it will be worth more, but a dollar is accepted everywhere and it's worth just a dollar.  Not $50,000 dollars.

Some people say it's digital gold, but gold is maintenance free.  Bitcoin requires someone to maintain it.

Some people say "It's just a high-risk asset" and they generally compare Bitcoins to tech stocks, but tech stocks are a legal share of a business that has productive capacity.  Microsoft takes inputs and produces an output greater than the sum of its parts.  Bitcoin can't do that.  It can't produce anything.

Recent stock and gold performance have broken those ideas.  Stocks are surging and Bitcoin isn't.  Gold is still hanging around the same price for a decade.

Bitcoin might go to $1M and it might sit around $16,000 for a decade.  There's no reason it can't do either one.
 
2022-11-15 11:02:01 AM  

DannyBrandt: Mr. Tweedy: My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.

I'm all ears. Not joking, not trying to be funny. Anyone reading this thread would love some advice.


One of my first "real" jobs was as a teller then head teller at a credit union.  It was my first job in banking so I had no idea how things were supposed to work.  When we got cash in we just run it through the money counter on the teller line, it wasn't uncommon for me to have 100k in cash feet away from customers, just running through the machine.  I would walk out of the vault with bricks of cash stacked on my arm.  They would have me balance the vault alone.  They eventually fired me for not getting along with my boss, whose job I was doing.  That supervisor then had to be moved to a quieter branch due to incompetance, and a couple years later the credit union was taked over by a larger one, and is hopefully better run now.

I then worked at a nine branch community bank and couldn't believe the difference.  It was night and day.  Dual control, procedures to keep everyone safe, actual training, competant management.  Everything made so much sense once I saw how things were supposed to be done.  Customers get a lot better service when the employees actually know what they are doing.

Thats clearly just my experience, but I think of it every time someone recommends credit unions.

Stay the fark away from the big banks though, they are trash.
 
2022-11-15 11:02:39 AM  

Fooshards: I think he is making the distinction between "crypto created that can then only ever be traded" and the "crypto created as a reward/payment for participation in the system"


I don't see how there is a distinction there.

And all the cryptobros that are advocates are all about "escaping the system" which is just exchanging the "overlords" of the government-backed fiat system for the "overlords" of a private developer-backed faith system with lots more in-between steps and middlemen.

Line Goes Up - The Problem With NFTs
Youtube YQ_xWvX1n9g
 
2022-11-15 11:06:13 AM  

imashark: If another bank or credit union were able to compete with them, I'd happily consider switching.

/and no, not one of those "online" banks


Ah, that's probably an extremely limiting factor. The best ones I use don't have any local branches. We keep an old savings account with a minimum balance at a local bank for the rare occasion we have cash to deposit or want services like notary.

There's nothing shady at all about our online banks & credit unions. Their ATM support is usually best too - they will credit fees up to a reasonable monthly max, so all ATMs are effectively free to use.
 
2022-11-15 11:11:13 AM  

OccamsWhiskers: imashark: If another bank or credit union were able to compete with them, I'd happily consider switching.

/and no, not one of those "online" banks

Ah, that's probably an extremely limiting factor. The best ones I use don't have any local branches. We keep an old savings account with a minimum balance at a local bank for the rare occasion we have cash to deposit or want services like notary.

There's nothing shady at all about our online banks & credit unions. Their ATM support is usually best too - they will credit fees up to a reasonable monthly max, so all ATMs are effectively free to use.


I know the "no online banks" thing may be a personal hangup, and that online banks and credit unions - especially the ones that have been around for a while - aren't going to rug-pull anyone, but I refuse to not be able to go to a place that I can discuss issues or needs in-person.
 
2022-11-15 11:21:11 AM  

vudukungfu: Buy the dip!


But the kind with little bacon crumbles in it. That's the fancy dip and worth buying.

/It goes great with blue chips
 
2022-11-15 11:31:28 AM  

Snarcoleptic_Hoosier: vudukungfu: Buy the dip!

But the kind with little bacon crumbles in it. That's the fancy dip and worth buying.

/It goes great with blue chips


I think he meant buy the pink sheets.
 
2022-11-15 11:39:58 AM  

Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.


Pour yourself a cognac, settle in for the evening and have a read:

https://www.bloomberg.com/features/2022-the-crypto-story/

Ok, you might need two cognacs - it's pretty long.
 
2022-11-15 11:47:14 AM  

DannyBrandt: Mr. Tweedy: My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.

I'm all ears. Not joking, not trying to be funny. Anyone reading this thread would love some advice.


The answer is to just be rich and it won't matter what bank you have.  You are profit to a bank.  If you are poor you give the bank money with fees, if you are rich they make money loaning your money to other people and getting you to sign up for their investment services.  Similarly a credit card either makes money from you on interest payments if you are poor or by the processing fees you generate spending lots of money if you are rich.

A few months back BOA charged me a late fee because I didn't pay my bill.  It was 100% my fault, black and white I missed the payment date.  I called them up and said, "I missed my credit card payment and was charged a fee, is there anything we can do about this?"  and it was nothing but, "I'm sorry, Sir.  I'll get that fee removed immediately, Sir.  Is there anything else I can do for you, Sir.".

Not everyone can just buy more money, so the actual solution would be some sort of nationalized banking service that gives all people some minimum level of banking (savings, direct deposit, checking/debit) with no fees.
 
2022-11-15 11:56:48 AM  

RogermcAllen: Not everyone can just buy more money, so the actual solution would be some sort of nationalized banking service that gives all people some minimum level of banking (savings, direct deposit, checking/debit) with no fees.


https://www.marketplace.org/2021/10/15/usps-pilots-a-public-banking-program/amp/
 
2022-11-15 12:03:42 PM  

RealXavori: Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.

FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.


JFC. Farkers call everything a Ponzi scheme. A Ponzi scheme is something very specific: Paying people promised investment returns with the investments of other people.

To put it in the simplest terms, FTX was essentially a bank that invested depositors' money into high-risk and shady stuff. A series of events spurred a "run on the bank"; FTX did not have the liquidity to cover the withdrawals and imploded. Yes, there are tokens involved that were sold, but nobody was promised investment returns that they were paying out of pocket.
 
2022-11-15 12:07:46 PM  

RealXavori: Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.

FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.


"Willing to accept". Well, there's your problem. FTX could have been trading in donkey fart futures and it wouldn't make a difference going forward. Enough people associate FTX with crypto to severely damage public faith in the concept. Since the value of crypto is exclusively backed by belief....
 
2022-11-15 12:08:41 PM  

DannyBrandt: Mr. Tweedy: My credit union used to be pretty decent 20 years ago but they're total crap now. If anything, it's now just a bank run by amateurs.

I'm all ears. Not joking, not trying to be funny. Anyone reading this thread would love some advice.


Fark user imageView Full Size
 
2022-11-15 12:10:37 PM  

thornhill: RealXavori: Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.

FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.

JFC. Farkers call everything a Ponzi scheme. A Ponzi scheme is something very specific: Paying people promised investment returns with the investments of other people.

To put it in the simplest terms, FTX was essentially a bank that invested depositors' money into high-risk and shady stuff. A series of events spurred a "run on the bank"; FTX did not have the liquidity to cover the withdrawals and imploded. Yes, there are tokens involved that were sold, but nobody was promised investment returns that they were paying out of pocket.


Part of the FTX/Alameda scheme did involve "guaranteed return" investments.

https://www.cryptoglobe.com/latest/2022/11/sbfs-alameda-research-under-scrutiny-for-promising-a-15-return-with-no-risk/
 
2022-11-15 12:12:29 PM  

baron von doodle: Enough people associate FTX with crypto to severely damage public faith in the concept. Since the value of crypto is exclusively backed by belief....


The schadenfreudiest part of this is that FTX/AlamedaResearch spent the summer engaging in JP Morgan cosplay, going around rescuing a whole bunch of other crypto firms, precisely to prevent a crisis of confidence except they were using customer funds to do this which led to their eventual collapse AND an even bigger crisis of confidence than if they had just let Celsius and those other firms swing.
 
2022-11-15 12:14:54 PM  

imashark: Fooshards: I think he is making the distinction between "crypto created that can then only ever be traded" and the "crypto created as a reward/payment for participation in the system"

I don't see how there is a distinction there.

And all the cryptobros that are advocates are all about "escaping the system" which is just exchanging the "overlords" of the government-backed fiat system for the "overlords" of a private developer-backed faith system with lots more in-between steps and middlemen.

[Youtube-video https://www.youtube.com/embed/YQ_xWvX1n9g]


The distinction is the intent IMO.  Minting 1 quadrilion shiba inu tokens for $50, then trying to sell them is just grift and greater-fool at its maximum.

This analogy may be a bit dated, but If bitcoin was SQL, ether is PL/SQL.  The latter is capable of really interesting things that aren't just accounting.
 
2022-11-15 12:15:04 PM  

Ivo Shandor: Part of the FTX/Alameda scheme did involve "guaranteed return" investments.

https://www.cryptoglobe.com/latest/2022/11/sbfs-alameda-research-under-scrutiny-for-promising-a-15-return-with-no-risk/


FTA: "That doesn't excuse us, we still shouldn't have done it. And in particular I should have proofread the final version way more carefully before it was released. Saying no risk was a farkup, we should not have put that in our deck."

And a thousand lawyers just facepalmed.  This dude is in the running with Elmo and TFG for being the worst legal client on the planet.
 
2022-11-15 12:19:47 PM  

OptionC: Ivo Shandor: Part of the FTX/Alameda scheme did involve "guaranteed return" investments.

https://www.cryptoglobe.com/latest/2022/11/sbfs-alameda-research-under-scrutiny-for-promising-a-15-return-with-no-risk/

FTA: "That doesn't excuse us, we still shouldn't have done it. And in particular I should have proofread the final version way more carefully before it was released. Saying no risk was a farkup, we should not have put that in our deck."

And a thousand lawyers just facepalmed.  This dude is in the running with Elmo and TFG for being the worst legal client on the planet.


media.tenor.comView Full Size
 
2022-11-15 12:34:29 PM  

Ivo Shandor: Part of the FTX/Alameda scheme did involve "guaranteed return" investments.

https://www.cryptoglobe.com/latest/2022/11/sbfs-alameda-research-under-scrutiny-for-promising-a-15-return-with-no-risk/


That's not specifically connected to why FTX went bust -- they weren't offering any guaranteed returns because they were an exchange. Yes, FTX was connected to literally a hundred companies, but everyone who had money in FTX that has now lost it weren't promised guaranteed returns. The only guarantee they had was that FTX had enough liquidity that they could withdraw their money whenever they wanted, and that FTX should have the liquidity because they weren't doing anything risky nor shady with people's money.
 
2022-11-15 12:34:45 PM  

baron von doodle: RealXavori: Mr. Tweedy: I'm usually pretty good at understanding how things work and so on, but I could never wrap my brain around Crypto. It only ever came across as a scam. Okay - maybe I was able to wrap my brain around it.

FTX isn't a cryptocurrency exchange.  It's a straight up Ponzi scheme.  For most of their business, they sold tokens that couldn't be traded anywhere but on their exchange and couldn't be used to make purchases outside that exchange.  They also did not use funds invested with them to grow value like you'd see in a mutual or hedge fund.  Instead, the only value of those tokens was speculation that other investors would buy them as well and drive up the price.  This was usually hidden behind lots of technobabble and obscure reports or straight up lack of reporting.

Now, it didn't start that way, and there was actual cryptocurrency trading going on, but for the most part, just classic ponzi.

Conversely, actual cryptocurrencies use a variety of means to create both scarcity in their currency as well as some sort of tangible effort tied to their value.  The original is proof of work where a computer would have to perform ever more complex calculations and as a reward, you'd get a token (I'm seriously, seriously oversimplifying this bit).  The key thing tho is that these currencies are free to move around and transparent in how they work.  This means they can also be used by anyone willing to accept them as a medium of exchange for goods and services.

"Willing to accept". Well, there's your problem. FTX could have been trading in donkey fart futures and it wouldn't make a difference going forward. Enough people associate FTX with crypto to severely damage public faith in the concept. Since the value of crypto is exclusively backed by belief....


Like collectible Nascar spoons.
 
2022-11-15 12:43:36 PM  

baron von doodle: "Willing to accept". Well, there's your problem. FTX could have been trading in donkey fart futures and it wouldn't make a difference going forward. Enough people associate FTX with crypto to severely damage public faith in the concept. Since the value of crypto is exclusively backed by belief....


I doubt it because Americans love the promise of high return investments and get-rich-quick schemes; as long as crypto is associated with 50% returns in a single year, people will keep pouring money into it.
 
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