7 ms·

FTX Yikes

77 points by nnx 4y ago

joshxyz 4y ago
finally our favourite rekt news, never expected ftx to be here lol
- koolba 4y ago
  On a long enough timeline, the survival rate for everyone drops to zero.
  - twelve40 4y ago
    While obviously true, this misses the point. There are very different ways to go, one can fizzle out after providing a useful service for decades for example, or get acquired for a lot of money by a larger entity, or one can get dissected by the DOJ to serve as a warning to everyone else.
    - mst 4y ago
      It's a Fight Club quote. Your points are absolutely true, but I don't think the person you're replying to was necessarily unaware of them. So I appreciated both your comments, albeit for completely different reasons.
      - herodoturtle 4y ago
        And here's me appreciating you for saying what I was thinking.
- ragnarel 4y ago
  With the crypto world on fire, anyone could be there... More surprises to come? }:-)
mudrockbestgirl 4y ago
What I'm curious about is: Will he go to jail? Is he on the run like Do Kwon and the A3C founders are? He's a billionaire with plenty of resources and he must have been aware of the situation and that it'll all come crashing down at some point. Shouldn't he have made "escape plans" ?
- automatic6131 4y ago
  >He's a billionaire with plenty of resources He was a billionaire at 25, and a millionaire at 30 :^)
- shapefrog 4y ago
  If they touched a cent of FTX.us client money, he will end up doing 5-10 years hard time. If not, nothing that matters will happen, and he can take some positive encouragement that stablecoin launched stablecoin 2.0 a few days after the first one went to 0 and even the wework founder can raise a billion without a plan.
  - angio 4y ago
    On the other hand, both him and Caroline are very well connected.
    - shapefrog 4y ago
      I am sure plenty of inmates will be happy to make SBF their bitch. He is a smart guy, im sure he knows not to pick up the soap.
kreetx 4y ago
This page is great, but a minor note: the page navigation buttons should be attached to the bottom of the viewport, currently when trying to quickly press the "page back" arrow the block moves out of place, so quickly moving back multiple pages is a bit clunky.
gasull 4y ago
I'll be surprised the day there's a positive article about crypto on HN. Notice that users of DeFi exchanges cannot be rug-pulled. A DeFi exchange cannot gamble away your funds because they aren't holding them.
- fidelramos 4y ago
  It is surprising and discouraging that a forum that is meant to be about start-ups, disruption, innovation and new ideas is so blind to one so revolutionary as cryptocurrencies. Yes there are scams, but that is not exclusive to the cryptocurrency world, and nobody is defending those. Yes there is too much price speculation, but there are also thousands of developers, companies and DAOs working on useful projects. We want cryptocurrencies and blockchains to be useful to people, let's focus on that. Yes scalability is insufficient at the moment, but there are multiple blockchains with concrete and plausible roadmaps to improve it while keeping enough decentralization. Let's not focus on the limitations of today, but on the possibilities of the future. Otherwise it would be like failing to imagine Youtube in the era of dial-up modems. It's unbecoming of Hacker News. I would like people in general, and even more here, to think twice and keep an open mind. If so many people are excited and dedicating their lives to it, isn't it possible that you missed something important?
  - piva00 4y ago
    I was very excited for Bitcoin in 2012, I mined a few on my gaming rig that was also being used for some Seti@Home and Folding@Home calculations when idle. I imagined that at some point it'd be an useful technology. We are 10 years in, I've followed the whole scene from the outside, not really engaged in it but always keeping tabs on developments, exciting things popping up, etc. I'm thoroughly convinced the current crop of cryptocurrencies/cryptofinance should die. I dislike the apologisers bringing up that "scams are not exclusively to cryptocurrency", yes, of course, there are scams everywhere but very few technologies live in this crossroads of lack of control and perverse incentives for greedy people to rob others. The amount of money circulating in it freely available to be scammed is also on a level different than most others. The enabling of scams with this technology is absurd. 10 years in and I still haven't really found a use-case that could come close to compensate for the amount of money that naive people have lost, I've seen complete assholes that I personally know become filthy rich, quickly, just by not having any moral compass and being enabled by this technology to steal from others. No, I won't focus on the possibilities of the future knowing the amount of damage it creates in the present, I don't live with a Machiavellian moral of "the ends justify the means". The current means suck and there is no big push from the cryptocurrency scene to address those properly because it's been co-opted by the scammers through and through. Does the technology itself still have some exciting features? Yes. Do I believe that it'll eventually evolve to something that is actually useful and not hostile? No, I don't believe that, not the current crop of people working on it. > If so many people are excited and dedicating their lives to it, isn't it possible that you missed something important? Isn't it possible that those people have misguided (or mischievous) motivations? It's not because a lot of people fall into a hype that it makes the hype validated. Even less a hype that is completely and absolutely created by pure greed.
jl2718 4y ago
> those who want to see this industry succeed As a very early and ardent believer in cryptocurrency, and cryptography in general, I'm not sure that I do want this "industry" to succeed. I see it as an imperfect but necessary mechanism to survive inevitable disaster. The "industry" must eventually die, either from obsolescence to the ideas that started it, or the failure of those ideas. I've accepted that it may be necessary, but also an existential risk, as the "industry" will always avoid self-obsolescence, and push toward the latter. This is already obvious from the cryptography perspective. The "industry" will never allow their products to adapt beyond their control.
- sph 4y ago
  That's why I am part of the oft-maligned Bitcoin maximalists. Bitcoin was an incredible technological achievement. It has interesting implications in the computing, social and economic spaces. It's borne out of the anarchic and cypherpunk ideas. It has no leaders, no visionaries. Then came the people wanting to profit. The companies. The scammers. The get rich quick con artists. The trading apps. The DeFi venture capitalists. The alt-coins. The far-right libertarians. The banks. The memers. The Twitter bots. The governments. And here we are. For all I care it can all burn to the ground. The price of Bitcoin ain't that interesting anyway, just like I don't love a programming language only iff it has a lot of users. To me Bitcoin is a bit like Lisp: a ground-breaking white-paper way ahead of its time, which has spawned countless imitation and is often misunderstood.
  - simmerup 4y ago
    Isn't there pretty persistent rumours that bitcoin was created by a government?
    - gasull 4y ago
      Irrelevant. The US government created the Internet.
  - gasull 4y ago
    The cypherpunks talked about DAOs even before Bitcoin existed, and you can't have DAOs without DeFi. Bitcoin is cool, but isn't the only thing.
ulfw 4y ago
Crypto for the average retail investor is dead. Maybe not forever, sure. But for years it will be. Too much money lost with falling crypto values and many many have lost everything with failing exchanges. Those who haven't lost a lot of money on crypto have lost confidence in it.
- once_inc 4y ago
  On the other hand, fiat isn't doing very well either. The financial system is breaking down like a slow motion train wreck we're all just sitting at the sidelines watching.
gorgoiler 4y ago
As an outsider to cryptocurrencies it seems completely transparent to me that there is no value in these systems — neither in terms of either capital or in generating ongoing revenue — other than the ability to exchange them back out for US dollars. There’s only so many years of being told “soon you’ll be able to buy pizza with yeetcoin!” before you have to accept that this supposed endgame just ain’t gonna happen. …ah but if it did, that yeetcoin is going to be worth a hell of a lot! Maybe you should buy one, just in case! I must resist the demon on my shoulder telling me such things.
- CTDOCodebases 4y ago
  Crypto like all financial assets is a tool for extracting wealth from others.
- gasull 4y ago
  Cryptocurrency, specially when holding the keys of your wallet, prevents: - bank runs - currency debasement - arbitrary seizures
  - KptMarchewa 4y ago
    xkcd 538
    - gasull 4y ago
      Anonymity.
      - trilbyglens 4y ago
        This is rapidly vanishing
        gasull 4y ago
        Only if using the wrong crypto.
  - 4y ago
kingrolo 4y ago
Its been very interesting to watch all of this play out. FTX going under feels somehow bigger than Gox, bigger than the DAO. Gox looked like it was held together by bits of string, the DAO was always something new and had the potential to be a risk, but FTX seeemed safe as houses. For crypto to exist in the regular world, its always seemed like more regulation of some sort is inevitable. Particularly for a company like FTX with US ties, and it looked like SBF was starting to cosy up to the regulators and fit himself in among the powers that be in the US. His big political donations, sports sponsorships, philanthropic funds. It looked to me like a person who believed in the idealism of crypto was fitting himself into the old world, and all of this lended credence to FTX being trustworthy. In the end his views on regulation went too far for many and this was strangely the thing that led exposing the dodgy things going on behind the curtain (with the leak of the balance sheet, and CZ saying he would exit his FTT). That said, Alameda Research, the trading arm, were clearly no slouches, they used to be up there on the Bitmex leaderboard and it seems so hard to grok that they couldn't have modelled all of this risk properly. Accounting for who is holding large amounts of FTT and the price impact that could have. I sort of feel there must be more to it, or maybe, then again, it just comes down to the same thing that's caused many other crypto funds to blow up - simple greed. The collateral is sitting there, so why use it. What's the worst that can happen?
- once_inc 4y ago
  > it seems so hard to grok that they couldn't have modelled all of this risk properly I think they did, but their management got greedy and overly hopeful that Bitcoin was going to break 100k last year. This is a trend in crypto for quite a while now: companies get big when the price increases, then get overly complacent and greedy when the market turns. Remember, you can have perfectly simulated risk assessments, only to have your boss say: "but we want to risk it anyway" and just ignore your protests.
- nibbleshifter 4y ago
  Gox was always dodgy as shit, and FTX felt even more dodgy. Especially its bossman having a raging hardon for tradfi regulations. > His big political donations, sports sponsorships, philanthropic funds. It looked to me like a person who believed in the idealism of crypto was fitting himself into the old world, and all of this lended credence to FTX being trustworthy. All of that made FTX seem even less trustworthy to me tbh. Much, much less trustworthy.
jimz 4y ago
There are no clean hands here. Binance does sketchy things that screw over their customers. FTX apparently does too (although anyone else have their referral income dry up suddenly in July-ish?). This happens because it's blatantly clear that the tech is moving quicker than the legislature by years and the only 'tool' they can wield is punitive, with arguments designed via circular logic that would only justify more regulation, but have no clue what and how to regulate in a manner that actually protects consumers and minimize potential side-effects that may last for decades - because it's likely impossible thanks to congressional ignorance and the narrow mandates of executive branch agencies largely focused on punitive measures uber alles. This might have gotten a bit personal, but effectively this is a lobbyist fight. Whoever wins, we lose. Keep your crypto in self-custody and remember that what the state and those with billions to spend on gaining influence are ultimately corseted by the myopia that comes with power. There are people who use crypto everyday now - I am one of them - and maybe the preoccupation over schoolyard slights and performative regulatory capture will simply result in more and more people moving crypto off the CEXes.

FTX Yikes

77 points by nnx 4y ago

joshxyz 4y ago

finally our favourite rekt news, never expected ftx to be here lol

koolba 4y ago
On a long enough timeline, the survival rate for everyone drops to zero.
- twelve40 4y ago
  While obviously true, this misses the point. There are very different ways to go, one can fizzle out after providing a useful service for decades for example, or get acquired for a lot of money by a larger entity, or one can get dissected by the DOJ to serve as a warning to everyone else.
  - mst 4y ago
    It's a Fight Club quote. Your points are absolutely true, but I don't think the person you're replying to was necessarily unaware of them. So I appreciated both your comments, albeit for completely different reasons.
    - herodoturtle 4y ago
      And here's me appreciating you for saying what I was thinking.
ragnarel 4y ago
With the crypto world on fire, anyone could be there... More surprises to come? }:-)

mudrockbestgirl 4y ago

What I'm curious about is: Will he go to jail? Is he on the run like Do Kwon and the A3C founders are? He's a billionaire with plenty of resources and he must have been aware of the situation and that it'll all come crashing down at some point. Shouldn't he have made "escape plans" ?

automatic6131 4y ago
>He's a billionaire with plenty of resources He was a billionaire at 25, and a millionaire at 30 :^)
shapefrog 4y ago
If they touched a cent of FTX.us client money, he will end up doing 5-10 years hard time. If not, nothing that matters will happen, and he can take some positive encouragement that stablecoin launched stablecoin 2.0 a few days after the first one went to 0 and even the wework founder can raise a billion without a plan.
- angio 4y ago
  On the other hand, both him and Caroline are very well connected.
  - shapefrog 4y ago
    I am sure plenty of inmates will be happy to make SBF their bitch. He is a smart guy, im sure he knows not to pick up the soap.

kreetx 4y ago

This page is great, but a minor note: the page navigation buttons should be attached to the bottom of the viewport, currently when trying to quickly press the "page back" arrow the block moves out of place, so quickly moving back multiple pages is a bit clunky.

gasull 4y ago

I'll be surprised the day there's a positive article about crypto on HN. Notice that users of DeFi exchanges cannot be rug-pulled. A DeFi exchange cannot gamble away your funds because they aren't holding them.

fidelramos 4y ago
It is surprising and discouraging that a forum that is meant to be about start-ups, disruption, innovation and new ideas is so blind to one so revolutionary as cryptocurrencies. Yes there are scams, but that is not exclusive to the cryptocurrency world, and nobody is defending those. Yes there is too much price speculation, but there are also thousands of developers, companies and DAOs working on useful projects. We want cryptocurrencies and blockchains to be useful to people, let's focus on that. Yes scalability is insufficient at the moment, but there are multiple blockchains with concrete and plausible roadmaps to improve it while keeping enough decentralization. Let's not focus on the limitations of today, but on the possibilities of the future. Otherwise it would be like failing to imagine Youtube in the era of dial-up modems. It's unbecoming of Hacker News. I would like people in general, and even more here, to think twice and keep an open mind. If so many people are excited and dedicating their lives to it, isn't it possible that you missed something important?
- piva00 4y ago
  I was very excited for Bitcoin in 2012, I mined a few on my gaming rig that was also being used for some Seti@Home and Folding@Home calculations when idle. I imagined that at some point it'd be an useful technology. We are 10 years in, I've followed the whole scene from the outside, not really engaged in it but always keeping tabs on developments, exciting things popping up, etc. I'm thoroughly convinced the current crop of cryptocurrencies/cryptofinance should die. I dislike the apologisers bringing up that "scams are not exclusively to cryptocurrency", yes, of course, there are scams everywhere but very few technologies live in this crossroads of lack of control and perverse incentives for greedy people to rob others. The amount of money circulating in it freely available to be scammed is also on a level different than most others. The enabling of scams with this technology is absurd. 10 years in and I still haven't really found a use-case that could come close to compensate for the amount of money that naive people have lost, I've seen complete assholes that I personally know become filthy rich, quickly, just by not having any moral compass and being enabled by this technology to steal from others. No, I won't focus on the possibilities of the future knowing the amount of damage it creates in the present, I don't live with a Machiavellian moral of "the ends justify the means". The current means suck and there is no big push from the cryptocurrency scene to address those properly because it's been co-opted by the scammers through and through. Does the technology itself still have some exciting features? Yes. Do I believe that it'll eventually evolve to something that is actually useful and not hostile? No, I don't believe that, not the current crop of people working on it. > If so many people are excited and dedicating their lives to it, isn't it possible that you missed something important? Isn't it possible that those people have misguided (or mischievous) motivations? It's not because a lot of people fall into a hype that it makes the hype validated. Even less a hype that is completely and absolutely created by pure greed.

jl2718 4y ago

> those who want to see this industry succeed As a very early and ardent believer in cryptocurrency, and cryptography in general, I'm not sure that I do want this "industry" to succeed. I see it as an imperfect but necessary mechanism to survive inevitable disaster. The "industry" must eventually die, either from obsolescence to the ideas that started it, or the failure of those ideas. I've accepted that it may be necessary, but also an existential risk, as the "industry" will always avoid self-obsolescence, and push toward the latter. This is already obvious from the cryptography perspective. The "industry" will never allow their products to adapt beyond their control.

sph 4y ago
That's why I am part of the oft-maligned Bitcoin maximalists. Bitcoin was an incredible technological achievement. It has interesting implications in the computing, social and economic spaces. It's borne out of the anarchic and cypherpunk ideas. It has no leaders, no visionaries. Then came the people wanting to profit. The companies. The scammers. The get rich quick con artists. The trading apps. The DeFi venture capitalists. The alt-coins. The far-right libertarians. The banks. The memers. The Twitter bots. The governments. And here we are. For all I care it can all burn to the ground. The price of Bitcoin ain't that interesting anyway, just like I don't love a programming language only iff it has a lot of users. To me Bitcoin is a bit like Lisp: a ground-breaking white-paper way ahead of its time, which has spawned countless imitation and is often misunderstood.
- simmerup 4y ago
  Isn't there pretty persistent rumours that bitcoin was created by a government?
  - gasull 4y ago
    Irrelevant. The US government created the Internet.
- gasull 4y ago
  The cypherpunks talked about DAOs even before Bitcoin existed, and you can't have DAOs without DeFi. Bitcoin is cool, but isn't the only thing.

ulfw 4y ago

Crypto for the average retail investor is dead. Maybe not forever, sure. But for years it will be. Too much money lost with falling crypto values and many many have lost everything with failing exchanges. Those who haven't lost a lot of money on crypto have lost confidence in it.

once_inc 4y ago
On the other hand, fiat isn't doing very well either. The financial system is breaking down like a slow motion train wreck we're all just sitting at the sidelines watching.

gorgoiler 4y ago

As an outsider to cryptocurrencies it seems completely transparent to me that there is no value in these systems — neither in terms of either capital or in generating ongoing revenue — other than the ability to exchange them back out for US dollars. There’s only so many years of being told “soon you’ll be able to buy pizza with yeetcoin!” before you have to accept that this supposed endgame just ain’t gonna happen. …ah but if it did, that yeetcoin is going to be worth a hell of a lot! Maybe you should buy one, just in case! I must resist the demon on my shoulder telling me such things.

CTDOCodebases 4y ago
Crypto like all financial assets is a tool for extracting wealth from others.
gasull 4y ago
Cryptocurrency, specially when holding the keys of your wallet, prevents: - bank runs - currency debasement - arbitrary seizures
- KptMarchewa 4y ago
  xkcd 538
  - gasull 4y ago
    Anonymity.
    - trilbyglens 4y ago
      This is rapidly vanishing
      - gasull 4y ago
        Only if using the wrong crypto.
- 4y ago

kingrolo 4y ago

Its been very interesting to watch all of this play out. FTX going under feels somehow bigger than Gox, bigger than the DAO. Gox looked like it was held together by bits of string, the DAO was always something new and had the potential to be a risk, but FTX seeemed safe as houses. For crypto to exist in the regular world, its always seemed like more regulation of some sort is inevitable. Particularly for a company like FTX with US ties, and it looked like SBF was starting to cosy up to the regulators and fit himself in among the powers that be in the US. His big political donations, sports sponsorships, philanthropic funds. It looked to me like a person who believed in the idealism of crypto was fitting himself into the old world, and all of this lended credence to FTX being trustworthy. In the end his views on regulation went too far for many and this was strangely the thing that led exposing the dodgy things going on behind the curtain (with the leak of the balance sheet, and CZ saying he would exit his FTT). That said, Alameda Research, the trading arm, were clearly no slouches, they used to be up there on the Bitmex leaderboard and it seems so hard to grok that they couldn't have modelled all of this risk properly. Accounting for who is holding large amounts of FTT and the price impact that could have. I sort of feel there must be more to it, or maybe, then again, it just comes down to the same thing that's caused many other crypto funds to blow up - simple greed. The collateral is sitting there, so why use it. What's the worst that can happen?

once_inc 4y ago
> it seems so hard to grok that they couldn't have modelled all of this risk properly I think they did, but their management got greedy and overly hopeful that Bitcoin was going to break 100k last year. This is a trend in crypto for quite a while now: companies get big when the price increases, then get overly complacent and greedy when the market turns. Remember, you can have perfectly simulated risk assessments, only to have your boss say: "but we want to risk it anyway" and just ignore your protests.
nibbleshifter 4y ago
Gox was always dodgy as shit, and FTX felt even more dodgy. Especially its bossman having a raging hardon for tradfi regulations. > His big political donations, sports sponsorships, philanthropic funds. It looked to me like a person who believed in the idealism of crypto was fitting himself into the old world, and all of this lended credence to FTX being trustworthy. All of that made FTX seem even less trustworthy to me tbh. Much, much less trustworthy.

jimz 4y ago

There are no clean hands here. Binance does sketchy things that screw over their customers. FTX apparently does too (although anyone else have their referral income dry up suddenly in July-ish?). This happens because it's blatantly clear that the tech is moving quicker than the legislature by years and the only 'tool' they can wield is punitive, with arguments designed via circular logic that would only justify more regulation, but have no clue what and how to regulate in a manner that actually protects consumers and minimize potential side-effects that may last for decades - because it's likely impossible thanks to congressional ignorance and the narrow mandates of executive branch agencies largely focused on punitive measures uber alles. This might have gotten a bit personal, but effectively this is a lobbyist fight. Whoever wins, we lose. Keep your crypto in self-custody and remember that what the state and those with billions to spend on gaining influence are ultimately corseted by the myopia that comes with power. There are people who use crypto everyday now - I am one of them - and maybe the preoccupation over schoolyard slights and performative regulatory capture will simply result in more and more people moving crypto off the CEXes.