4 ms·

> where did the money go? Isn't it obvious? It was paid to customers and others that took the money or equivalent dollar amount in assets off the exchange. Eit

by dibt 4y ago

> where did the money go? Isn't it obvious? It was paid to customers and others that took the money or equivalent dollar amount in assets off the exchange. Either to a bank, another exchange, on-chain self-custody, political donations, salaries, stadium naming rights, Sam's "make it all back" scheme, etc. Matt is smart, so maybe he knows, and the question is rhetorical.

nullc 4y ago
It's not rhetorical: The known donations, naming rights, etc. don't remotely add up to the amount of liabilities. If their balance sheet was full of some external asset that had lost a ton of value you could say, okay customer deposited Bitcoin and FTX used it to buy whatevercoin and whatever coin lost 96% of its value. The money went to the people selling whatevercoin. But in this case it's a mystery-- their balance sheet is full of magic beans but most of them are magic beans ftx and crew appear to have printed from nothing, not magic beans they would have had to buy on the market. So customers deposited real money, a bit was spent on donations/etc. And FTX created some magic beans-- so where did the money go? And my conjecture was just that a big chunk of the liabilities are also fake too-- the result of magic beans being deposited by 'customers' (really FTX insiders) and traded for paper bitcoin ('perpetuals').
- drexlspivey 4y ago
  I think it’s fairly clear what happened: Customers deposited $8B you mark $8B of cash as assets and $8B of customer claims as liabilities. You send that cash to Alameda *off the books* because otherwise you will raise some alarms in internal procedures. Now your assets and liabilities don’t match anymore. You want to do some accounting because you are about to go bankrupt, you now end up with a $8B hole that you mark as “Hidden poorly internally labeled account”
  - nullc 4y ago
    I believe that balance sheet supposedly contains Alameda assets too, but I'm not sure there. If so there is still an interesting question of what Alameda Research did with the funds -- as the reports of their assets had them mostly holding stuff FTX related companies printed.

by dibt 4y ago

nullc 4y ago

It's not rhetorical: The known donations, naming rights, etc. don't remotely add up to the amount of liabilities. If their balance sheet was full of some external asset that had lost a ton of value you could say, okay customer deposited Bitcoin and FTX used it to buy whatevercoin and whatever coin lost 96% of its value. The money went to the people selling whatevercoin. But in this case it's a mystery-- their balance sheet is full of magic beans but most of them are magic beans ftx and crew appear to have printed from nothing, not magic beans they would have had to buy on the market. So customers deposited real money, a bit was spent on donations/etc. And FTX created some magic beans-- so where did the money go? And my conjecture was just that a big chunk of the liabilities are also fake too-- the result of magic beans being deposited by 'customers' (really FTX insiders) and traded for paper bitcoin ('perpetuals').

drexlspivey 4y ago
I think it’s fairly clear what happened: Customers deposited $8B you mark $8B of cash as assets and $8B of customer claims as liabilities. You send that cash to Alameda *off the books* because otherwise you will raise some alarms in internal procedures. Now your assets and liabilities don’t match anymore. You want to do some accounting because you are about to go bankrupt, you now end up with a $8B hole that you mark as “Hidden poorly internally labeled account”
- nullc 4y ago
  I believe that balance sheet supposedly contains Alameda assets too, but I'm not sure there. If so there is still an interesting question of what Alameda Research did with the funds -- as the reports of their assets had them mostly holding stuff FTX related companies printed.