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> FTX may be one of, if not the, biggest financial frauds/scandals in history. The media doesn't seem to be treating it as such. Most of that wealth was manufa
by manholio 4y ago
> FTX may be one of, if not the, biggest financial frauds/scandals in history. The media doesn't seem to be treating it as such.
Most of that wealth was manufactured in the crypto bubble, not actual money people worked for and put into crypto, just early stage ponzi investors that kept rolling their investment. The wealth, while apparently substantial, was never actually there, I think most understand that the mirage would have collapsed anyway if most investors would have attempted to exit earlier.
Basically, any early holder of Bitcoin today, while losing 70% or so of the peak value, is still a bazzillion basis points in the black, because they can get real dollars for what is essentially an early and rudimentary shitcoin with arcane limits, slow transaction times and extreme volatility, which is only used in the real world for speculation, money laundry and trading other shitcoins. Pretty ironic that's the "gold standard" of the crypto world, followed by an entire brown spectrum of shittier and scammier tokens.
- anonymoushn 4y agoThis is simply not true. Their liabilities are in dollars because their customers wired them dollars.
- manholio 4y agoMany of their customers (if not most, on volume) wired USDT obtained from other parts of the ponzi ecosystem, then traded them internally for dollars. This way, FTX could accumulate internal USD liabilities without ever having those dollars wired into their accounts. Even if we were to take at face value the $5 billion liabilities from SBF's "Excel ballancesheet", that's still less than a third of the loses. Sure, Tether should have a 1:1 backing to real dollars or dollar denominated assets - but it's like the ponzi-world's worst kept secret that they don't, as we'll soon find out.
- onlyrealcuzzo 4y agoIf most of the losses are USDT, how do we know Tether didn't just print them out of thin air to lend to FTX / Alameda as their "Commercial Paper"? That would be my first guess.
- MangoCoffee 4y ago> Most of that wealth was manufactured in the crypto bubble, not actual money people worked for and put into crypto Its real money. https://twitter.com/Travis_Kling/status/1592198107734876160?s=20&t=yzmr1iDeHAQmNNLYukCimA https://twitter.com/Travis_Kling/status/1592198107734876160?... https://www.coindesk.com/business/2022/11/14/ikigai-asset-management-had-large-majority-of-assets-on-ftx/ https://www.coindesk.com/business/2022/11/14/ikigai-asset-ma...
- manholio 4y agoSo the assets of a "crypto hedge fund" that somehow kept "a large majority" of the fund's total assets on a 3rd party centralized exchanged is "real money" now? That's the very definition of fake wealth, hot money seeking 50% returns in the hot risky mess that is the crypto market. The recursively leveraged self-licking icecream is melting down.