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https://twitter.com/SBF_FTX/status/1590709172936798208 https://twitter.com/SBF_FTX/status/1590709172936798208 "5) The full story here is one I'm still fleshing

https://twitter.com/SBF_FTX/status/1590709172936798208 https://twitter.com/SBF_FTX/status/1590709172936798208 "5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower." Amazing

rozap 4y ago
Blockchain solves this.
treis 4y ago
Can someone ELI5 what margin has to do with the bank run?
- acgt23 4y ago
  It doesn’t really, none of this is adding up. But he’s explicitly lied about this stuff in the past couple days (and since deleted the tweets) so that’s probably what’s happening here
- deleted 4y ago
  [deleted]
- nullc 4y ago
  Much of the assets traded on FTX were leveraged sidebets e.g. "perpetuals", the underlying assets didn't exist.
schemescape 4y ago
What does “poor internal labeling of bank-related accounts” mean? They didn’t know which of their accounts were fiat vs crypto? Asset vs liability? Something else?
- skippyboxedhero 4y ago
  My thoughts exactly. He managed to say precisely nothing in 27 (or whatever it was) tweets apart from the obvious...that he wasn't up to running the company. WSJ is reporting that money was lent to Alameda based on a conversation that SBF had with an investor (saying that the gap was $10bn) but this isn't what he saying publicly...maybe this is obvious because, if this is true, then it is hard to see how he avoids jail.
jrmg 4y ago
At the end of the thread: NOT ADVICE, OF ANY KIND, IN ANY WAY I WAS NOT VERY CAREFUL WITH MY WORDS HERE, AND DO NOT MEAN ANY OF THEM IN A TECHNICAL OR LEGAL SENSE; I MAY WELL HAVE NOT DESCRIBED THINGS RIGHT though I'm trying to be transparent. I'M NOT A GOOD DEV AND PROBABLY MISDESCRIBED SOMETHING. That’s quite the (ad-hoc) disclaimer…
- ALittleLight 4y ago
  "In the event anything I've said is used against me in a court of law I didn't mean whatever it is in that way."
- mrguyorama 4y ago
  Lol I don't think that would hold up in court.
  - raverbashing 4y ago
    yeah, that disclaimer is as valid as "a cop can't lie to you"
- jjulius 4y ago
  If you have to slap such a poorly-written disclaimer at the end, maybe you shouldn't have said anything...
chlodwig 4y ago
"4) FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little. 5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower. 6) My sense before: Leverage: 0x USD liquidity ready to deliver: 24x average daily withdrawals Actual: Leverage: 1.7x Liquidity: 0.8x Sunday's withdrawals. Because, of course, when it rains, it pours. We saw roughly $5b of withdrawals on Sunday--the largest by a huge margin." https://twitter.com/SBF_FTX/status/1590709172936798208 https://twitter.com/SBF_FTX/status/1590709172936798208 I don't understand this. In FTX International terms of service ( https://help.ftx.com/hc/article_attachments/9719619779348/FTX_Terms_of_Service.pdf https://help.ftx.com/hc/article_attachments/9719619779348/FT... ) they say that users have full title to digital assets, that they are the property of the user, and shall not be loaned to FTX trading and are treated as they belong to FTX trading, and that users control the assets in the account. FTX was never claiming to run a bank where they loan out users deposits for interest. They were claiming to be running a 100% allocated, straight up custodial vault. Therefore they should be able to simply return whatever assets customers owned on their service, even if every customer wants their asset back at the same time. If they were actually loaning out customer's assets and running a fractional-reserve bank, that is just straight up fraud, full-stop.
cuteboy19 4y ago
Understandable mistake. Many of us who have been bank tellers know how easy it is to accidentally empty a client's account and spend it all on gambling and hookers. It is an honest mistake for sure
moralestapia 4y ago
Does he has absolute no good counselors? Does he get advice from his roomies in the Bahamas? This twitter thread, plus some others tweets he has deleted now, could get him into some real trouble.
- neural_thing 4y ago
  His legal and compliance team quit

rozap 4y ago

Blockchain solves this.

treis 4y ago

Can someone ELI5 what margin has to do with the bank run?

acgt23 4y ago
It doesn’t really, none of this is adding up. But he’s explicitly lied about this stuff in the past couple days (and since deleted the tweets) so that’s probably what’s happening here
deleted 4y ago
[deleted]
nullc 4y ago
Much of the assets traded on FTX were leveraged sidebets e.g. "perpetuals", the underlying assets didn't exist.

schemescape 4y ago

What does “poor internal labeling of bank-related accounts” mean? They didn’t know which of their accounts were fiat vs crypto? Asset vs liability? Something else?

skippyboxedhero 4y ago
My thoughts exactly. He managed to say precisely nothing in 27 (or whatever it was) tweets apart from the obvious...that he wasn't up to running the company. WSJ is reporting that money was lent to Alameda based on a conversation that SBF had with an investor (saying that the gap was $10bn) but this isn't what he saying publicly...maybe this is obvious because, if this is true, then it is hard to see how he avoids jail.

jrmg 4y ago

At the end of the thread: NOT ADVICE, OF ANY KIND, IN ANY WAY I WAS NOT VERY CAREFUL WITH MY WORDS HERE, AND DO NOT MEAN ANY OF THEM IN A TECHNICAL OR LEGAL SENSE; I MAY WELL HAVE NOT DESCRIBED THINGS RIGHT though I'm trying to be transparent. I'M NOT A GOOD DEV AND PROBABLY MISDESCRIBED SOMETHING. That’s quite the (ad-hoc) disclaimer…

ALittleLight 4y ago
"In the event anything I've said is used against me in a court of law I didn't mean whatever it is in that way."
mrguyorama 4y ago
Lol I don't think that would hold up in court.
- raverbashing 4y ago
  yeah, that disclaimer is as valid as "a cop can't lie to you"
jjulius 4y ago
If you have to slap such a poorly-written disclaimer at the end, maybe you shouldn't have said anything...

chlodwig 4y ago

"4) FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little. 5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower. 6) My sense before: Leverage: 0x USD liquidity ready to deliver: 24x average daily withdrawals Actual: Leverage: 1.7x Liquidity: 0.8x Sunday's withdrawals. Because, of course, when it rains, it pours. We saw roughly $5b of withdrawals on Sunday--the largest by a huge margin." https://twitter.com/SBF_FTX/status/1590709172936798208 https://twitter.com/SBF_FTX/status/1590709172936798208 I don't understand this. In FTX International terms of service ( https://help.ftx.com/hc/article_attachments/9719619779348/FTX_Terms_of_Service.pdf https://help.ftx.com/hc/article_attachments/9719619779348/FT... ) they say that users have full title to digital assets, that they are the property of the user, and shall not be loaned to FTX trading and are treated as they belong to FTX trading, and that users control the assets in the account. FTX was never claiming to run a bank where they loan out users deposits for interest. They were claiming to be running a 100% allocated, straight up custodial vault. Therefore they should be able to simply return whatever assets customers owned on their service, even if every customer wants their asset back at the same time. If they were actually loaning out customer's assets and running a fractional-reserve bank, that is just straight up fraud, full-stop.

cuteboy19 4y ago

Understandable mistake. Many of us who have been bank tellers know how easy it is to accidentally empty a client's account and spend it all on gambling and hookers. It is an honest mistake for sure

moralestapia 4y ago

Does he has absolute no good counselors? Does he get advice from his roomies in the Bahamas? This twitter thread, plus some others tweets he has deleted now, could get him into some real trouble.

neural_thing 4y ago
His legal and compliance team quit