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This entire press release is a master class in misunderstanding the relationship between the CFTC, FTX, and FTX US (LedgerX). FTX US was registered, licensed,

This entire press release is a master class in misunderstanding the relationship between the CFTC, FTX, and FTX US (LedgerX). FTX US was registered, licensed, and regulated by the CFTC as both a DCM (designated contract market) and a DCO (derivatives clearing organization). FTX Intl bought LedgerX (the DCO and DCM) presumably as an entryway into the US marketplace and as an attempt to bypass the registration process for those types of entities, but FTX Intl was in no way registered, licensed, or regulated by the CFTC. It's a shame LedgerX may go down with the ship, and their marketplace has a lot of opportunity.

SilasX 4y ago
Okay but FTX US was also doing obviously shady stuff that should have shown up quickly in audits or other records the CFTC would have access to, so…?
- kasey_junk 4y ago
  So the cftc is a tiny agency (~700 total employees) and has a lot of other things they regulate (everything from commodities exchange order book micro manipulation to gold fraud over the phone). At the end of the day FTX came apart too fast and didn’t impact enough people to generate a reason for them to spend their limited resources on them.
  - skippyboxedhero 4y ago
    This is not accurate. FTX is, afaik, the biggest fraud of it's kind that there has ever been. I saw today an estimate in the FT of 1m creditors. Biggest outright fraud since Madoff, in many ways this is even bigger (Madoff didn't steal directly from his investors, he just paid off old investors/himself with new investors, Madoff was a $60bn fraud but most of this money never existed at all, Madoff was maybe $20bn and a good portion of this has been recovered...SBF did actually steal $10bn...it seems). Generally, the issue is that regulators come down like a ton of bricks on the little guy but won't do anything when something is too big to regulate. There is no easy solution to this because you will never be able to overcome the lack of critical thought at regulatory agencies. It is also worth considering the actual scope of protection that regulators offer: the premise of most regulation is that regulators can regulate...when they can't (this is less true outside financial regulation btw, in financial markets you seem the same people do the same scam over and over with no consequences because there are slight variations...and then come down heavily on other people who are innovating...it is really despairing).
    - pessimizer 4y ago
      > There is no easy solution to this because you will never be able to overcome the lack of critical thought at regulatory agencies. There is no desire for a solution to this, therefore anyone showing critical thought at regulatory agencies is fired. Protect Lina Khan.
      - skippyboxedhero 4y ago
        She is the epitome of lack of critical thought. The yin to the Republican's yang of saying the EPA should shut down.
        selimthegrim 4y ago
        Can you elaborate? Should she have invented/perfected/deployed a few scams herself first?
jessaustin 4y ago
One does wish that the address at the bottom wasn't: 1825 K Street NW, Suite 1080, Washington DC 20006 It's hard to believe anything from K-street.

SilasX 4y ago

Okay but FTX US was also doing obviously shady stuff that should have shown up quickly in audits or other records the CFTC would have access to, so…?

kasey_junk 4y ago
So the cftc is a tiny agency (~700 total employees) and has a lot of other things they regulate (everything from commodities exchange order book micro manipulation to gold fraud over the phone). At the end of the day FTX came apart too fast and didn’t impact enough people to generate a reason for them to spend their limited resources on them.
- skippyboxedhero 4y ago
  This is not accurate. FTX is, afaik, the biggest fraud of it's kind that there has ever been. I saw today an estimate in the FT of 1m creditors. Biggest outright fraud since Madoff, in many ways this is even bigger (Madoff didn't steal directly from his investors, he just paid off old investors/himself with new investors, Madoff was a $60bn fraud but most of this money never existed at all, Madoff was maybe $20bn and a good portion of this has been recovered...SBF did actually steal $10bn...it seems). Generally, the issue is that regulators come down like a ton of bricks on the little guy but won't do anything when something is too big to regulate. There is no easy solution to this because you will never be able to overcome the lack of critical thought at regulatory agencies. It is also worth considering the actual scope of protection that regulators offer: the premise of most regulation is that regulators can regulate...when they can't (this is less true outside financial regulation btw, in financial markets you seem the same people do the same scam over and over with no consequences because there are slight variations...and then come down heavily on other people who are innovating...it is really despairing).
  - pessimizer 4y ago
    > There is no easy solution to this because you will never be able to overcome the lack of critical thought at regulatory agencies. There is no desire for a solution to this, therefore anyone showing critical thought at regulatory agencies is fired. Protect Lina Khan.
    - skippyboxedhero 4y ago
      She is the epitome of lack of critical thought. The yin to the Republican's yang of saying the EPA should shut down.
      - selimthegrim 4y ago
        Can you elaborate? Should she have invented/perfected/deployed a few scams herself first?

jessaustin 4y ago

One does wish that the address at the bottom wasn't: 1825 K Street NW, Suite 1080, Washington DC 20006 It's hard to believe anything from K-street.