6 ms·

If FTX pays anyone back, it will be the institutions that hold their debt.

• rafale 4y ago
  Celsius argued that depositors were actually lenders. I wonder if FTX will try the same angle. It's gonna be harder to justify because while Celsius was all about yield, FTX was a traditional exchange doing custody on behalf of its clients.
  • zoklet-enjoyer 4y ago
    FTX was giving 8% interest on the first $10k deposited. I definitely considered myself a lender and I gtfo before shtf
    • TremendousJudge 4y ago
      What I don't understand is how this kind of stuff doesn't qualify them as a bank
      • labster 4y ago
        Crypto: reimplementing the financial system, poorly.
        • trophycase 4y ago
          FTX is not crypto. If you had a bank that accepted ears of corn and bushels of apples for deposit, and trading between them, you wouldn't blame farmers when that bank stole everyone's deposits.
          • Sebguer 4y ago
            Barely a year ago, you were telling someone they were ridiculous for claiming that FTX might go under if Tether had a major event: https://news.ycombinator.com/item?id=28797080 https://news.ycombinator.com/item?id=28797080
            • trophycase 4y ago
              I said it was ridiculous to claim that Tether collapsing would cause "most major exchanges to go under". Congratulations on totally twisting my words though. "Most major exchanges" don't have much exposure to tether.
          • deleted 4y ago
            [deleted]
          • ceejayoz 4y ago
            If a whole bunch of banks trading in corn/apples did that, though, things start to be a bit different.
          • zoklet-enjoyer 4y ago
            Yeah I would. Why wouldn't you blame the thief?
            • andirk 4y ago
              > FTX is not crypto And a bank is not the ears of corn in the analogy. The thief here is FTX which is like the bank. You don't blame the corn for being stolen. Yes, blame the thief.
            • zoklet-enjoyer 4y ago
              Oops. I somehow read that completely opposite of what it said
        • JamesianP 4y ago
          Certainly that's true of the overall sector. But crypto as a technology has some advantages and some disadvantages, same for traditional banking. People were arguing even before the crash that FTX was combining disadvantages of both.
      • lazide 4y ago
        Well, first the regulators would need to grow a pair.
  • deleted 4y ago
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• thewataccount 4y ago
  Not FTX - but I know Coinbase has stated in their earnings report that they will use user deposits to pay debtors back first in the case of bankruptcy. Edit - better explanations below this Also a friendly reminder to everyone not to trust any exchange at all with crypto unless you're actively trading it, keep it in a wallet!
  • bonestamp2 4y ago
    I forgot about that. I don't have much at coinbase, but going to move that over to my ledger where it should be anyway.
    • maerF0x0 4y ago
      > my ledger where it should be anyway. +1 to this. Remember the classic phrase that goes something like "Not your keys, not your crypto"
  • Gwypaas 4y ago
    They want to do that, pending what the bankruptcy court would decide which they have no power to influence. Like the Kraken ToS. > Ownership. Title to Digital Assets shall at all times remain with you and shall not transfer to Payward, except as provided herein. All interests in Digital Assets we hold for Kraken Accounts are held for customers, are not property of Payward. As the owner of Digital Assets in your Kraken Account, you bear all risk of loss of such Digital Assets. None of the Digital Assets in your Kraken Account are the property of Payward. Payward does not represent or treat assets in your Kraken Account as belonging to Payward. However, a court may disagree with Payward’s treatment of your assets and subject them to claims of Payward’s creditors. https://www.kraken.com/legal https://www.kraken.com/legal Which means that the current fad of "proof of reserves" means absolutely nothing without the liabilities side, both customer accounts and for the company itself.
    • thewataccount 4y ago
      Thanks for the correction!
• encryptluks2 4y ago
  What about institutions that owe FTX and Alameda Research money? Didn't FTX and Alameda invest in companies as well.. and will those companies still owe a percentage of those investments in order to liquidate money?
  • skinnymuch 4y ago
    Presumably yeah. Like the Robinhood stake is surely going to be liquidated. Do they own large stakes in many other liquid companies?
    • encryptluks2 4y ago
      Yes, they have been investing in various crypto companies for a long time. Their name has frequently been attached as seed investors in numerous startups, specifically in the Solana ecosystem.