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I wonder how much of those $16B in customer deposits were actually lightly-traded altcoins that could never have been liquidated at anything close to that value
by matthewdgreen 4y ago
I wonder how much of those $16B in customer deposits were actually lightly-traded altcoins that could never have been liquidated at anything close to that value? There is no doubt they defrauded people of a lot of (real!) money, but my guess is a huge chunk of that $16B top-line figure is fantasyland dog-coin nonsense. Whereas the LTCM and Enron investors at least started with real cash.
- tommica 4y agoBut those coins were most likely purchased with real money?
- matthewdgreen 4y agoYes, but how much real money is the question. I'm not doubting that real money was lost, just wondering if $16B of actual customer dollars ever flowed into the exchange.
- scottyah 4y agoExactly, I always wondered what the real numbers looked like. It's so easy to mint 100 coins, get a friend to buy one at $100, and say you "have" $9,900. I wouldn't be surprised if the number of actual dollars was less than $100 million.
- tfehring 4y agoIt's easy to see how FTX's assets could be "worth" $16B in the absence of any real money coming into play, but I don't see how they could get to $16B in liabilities that way. The most obvious possibility would be if their liabilities were also denominated in thinly-traded shitcoins, but at this point it seems clear that that wasn't the case.
- bena 4y agoI think his point is that while it was bought with real money, it couldn't be sold for real money. If I buy 50 RandoCoins for $1 today, tomorrow it shows that it's now valued at $2, and then the next day RandoCoin is hacked and all the coins are stolen, I didn't really lose $100, I only lost $50. So he's wondering if the value of loss is being expressed as the money used the purchase the coins or the perceived value of the coins.
- tommica 4y agoFair enough, that makes sense.
- TrapLord_Rhodo 4y agoDog-coin nonsense has a 24hr trading volume of $669M. There's actually quite a bit of liquidity in crypto since it lends itself to HFT. BTC for instance has a 24hr TV of $37B, making it one of the most exchanged assets in the world.
- lern_too_spel 4y agoExchanged for other crypto. The inflow and outflow of real money is on a much smaller scale, about $200 million per day for BTC.
- TrapLord_Rhodo 4y agocitation?
- anonymoushn 4y agoYou can just look at SBF's excel spreadsheet describing his own liabilities, they are mostly in dollars
- nullc 4y agoI think it's likely that a significant portion of those liabilities were generated from magic beans and ought to be ignored when comparing the size of the collapse with other things. To give a hypothetical example: Alameda, as a customer, deposits magic beans with a mark to market value of a billion dollars. Then Alameda trades the magic beans for a billion dollars of BTC-perp (FTX paper bitcoin), with FTX acting as the counterparty (which I believe they typically were for trades of the perpetuals). Now FTX's balance sheet reflects $1 billion in Bitcoin liability (plus being long $1 billion worth of magic beans)-- but in this example no bitcoin had been deposited at all-- just magic beans. When sizing up the losses, all liability ultimately resulting from magic beans ought to be backed out. This is exit complicated because some of the magic-bean derived paper assets have presumably been withdrawn using customer deposits, and those funds are actually lost even if the depositors that brought them in never traded (and simply deposited in FTX because of the ponzi-scheme grade yields they were paying depositors).