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> What's not clear to me is what they gambled on that lost money. My guess would be other crypto ventures. All these crypto companies pumped each other with no

> What's not clear to me is what they gambled on that lost money. My guess would be other crypto ventures. All these crypto companies pumped each other with no products/assets (Stadium names and soccer team sponsorships with no products to sell!) and invested in each other. The economy had so much excess money and they got pumped and they thought this is what "investing" is. Economy's bubble burst and suddenly their valuations goes to 0. When economy goes bad everyone is hurt but these companies had nothing but vaporware and are vaporizing as a result. Just a guess though.

lordnacho 4y ago
But any kind of illiquid venture investment is just money out of your trading capital. Maybe Tom Brady takes tokens in exchange for doing adverts, but I doubt that stadium uses FTT to pay its employees. Likewise with any other venture, you need cold hard cash. Swapping whatever cash you have for FTT in order to invest it elsewhere just seems insane. You've got a business that creates cash, and needs it for deposits and margins. I mean sure, split out some into a venture business, but be sensible and keep some for the cash cow? Also, hire an adult to tell you this. Would have cost barely anything to get any old finance professional to come in and say that.
- UncleMeat 4y ago
  It does seem like it would be so easy to not fuck this up. Fees are high on the crypto exchanges and you've got so many people day trading or even trading via automation that you should do well. But I can imagine how it happens. It is some massive fucking bull market and you see your peers doing shady things (20% APR! Zero risk!) and making shit loads of money. You've got this trading arm that is making shit loads of money during the bull market. So you do a little double dipping and it work! Hooray you are making everybody richer! So you do a little more. And a little more. And then oops Alameda is losing a lot of money. But don't worry this is just a blip. Those folks are smart. Hmmm... this is taking longer than we thought to come back. They just need some temporary money to get through this. Don't worry, they've still got huge assets. Oh fuck, their assets are tanking and they are still losing money. Kaboom. You need to have somebody in the room who can say "yes I know this strategy is making money right now but we absolutely cannot do this." And it is already hard to have that person in the room normally, let alone when you are a company make up of people in their 20s who are told they can do no wrong and also believe that it is their moral duty to make a shit ton of money so they can funnel it into some weird effective altruism mission. If you believe you are saving the world then that 20th billion is still important, whereas if you just want to be rich as fuck then it really isn't.

lordnacho 4y ago

But any kind of illiquid venture investment is just money out of your trading capital. Maybe Tom Brady takes tokens in exchange for doing adverts, but I doubt that stadium uses FTT to pay its employees. Likewise with any other venture, you need cold hard cash. Swapping whatever cash you have for FTT in order to invest it elsewhere just seems insane. You've got a business that creates cash, and needs it for deposits and margins. I mean sure, split out some into a venture business, but be sensible and keep some for the cash cow? Also, hire an adult to tell you this. Would have cost barely anything to get any old finance professional to come in and say that.

UncleMeat 4y ago
It does seem like it would be so easy to not fuck this up. Fees are high on the crypto exchanges and you've got so many people day trading or even trading via automation that you should do well. But I can imagine how it happens. It is some massive fucking bull market and you see your peers doing shady things (20% APR! Zero risk!) and making shit loads of money. You've got this trading arm that is making shit loads of money during the bull market. So you do a little double dipping and it work! Hooray you are making everybody richer! So you do a little more. And a little more. And then oops Alameda is losing a lot of money. But don't worry this is just a blip. Those folks are smart. Hmmm... this is taking longer than we thought to come back. They just need some temporary money to get through this. Don't worry, they've still got huge assets. Oh fuck, their assets are tanking and they are still losing money. Kaboom. You need to have somebody in the room who can say "yes I know this strategy is making money right now but we absolutely cannot do this." And it is already hard to have that person in the room normally, let alone when you are a company make up of people in their 20s who are told they can do no wrong and also believe that it is their moral duty to make a shit ton of money so they can funnel it into some weird effective altruism mission. If you believe you are saving the world then that 20th billion is still important, whereas if you just want to be rich as fuck then it really isn't.