4 ms·

OMG. "The dog ate my homework" would have been a better excuse. > like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money

OMG. "The dog ate my homework" would have been a better excuse. > like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX" > ....3 years later... > 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX' So they "basically" forgot about $8B not transferred to FTX. But somehow FTX customers saw the funds deposited in their accounts, otherwise they would have complained.

hef19898 4y ago
Since more than one thing can be true at the same time, why not a combination of a) total lack of internal controls, understanding of basic accounting and book keeoing, b) total lack of competence when it comes to manage these amounts of money and c) actively defrauding customers by stealing their deposits?
- oldgradstudent 4y ago
  All of the above. Alameda Research was clearly in the top of the worst hedge funds ever, and clearly they had terrible controls and accounting. However, without (c) you don't get this epic disaster. From SBF's tweets it is clear that they were aware they had to keep customer funds segregated. Remember the time they tried to pretend that USD is protected by the FDIC? https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cease-and-desist-from-fdic-about-insurance.html https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cea... Well, actually it was protected by the FDIC, but not from FTX.
skybrian 4y ago
It doesn't make sense and could all be lies, but to try to interpret it: they saw that the money arrived in the "poorly labelled account" and increased the customer's balance. But in some sense, the money never got to FTX and was still with Alameda. Or alternatively, FTX and Alameda commingled funds using the "poorly labelled account" and it was used for whatever payments either company needed to make, like withdrawals. This lack of separation means the balances were never really backed and it was a Ponzi all along.

hef19898 4y ago

Since more than one thing can be true at the same time, why not a combination of a) total lack of internal controls, understanding of basic accounting and book keeoing, b) total lack of competence when it comes to manage these amounts of money and c) actively defrauding customers by stealing their deposits?

oldgradstudent 4y ago
All of the above. Alameda Research was clearly in the top of the worst hedge funds ever, and clearly they had terrible controls and accounting. However, without (c) you don't get this epic disaster. From SBF's tweets it is clear that they were aware they had to keep customer funds segregated. Remember the time they tried to pretend that USD is protected by the FDIC? https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cease-and-desist-from-fdic-about-insurance.html https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cea... Well, actually it was protected by the FDIC, but not from FTX.

skybrian 4y ago

It doesn't make sense and could all be lies, but to try to interpret it: they saw that the money arrived in the "poorly labelled account" and increased the customer's balance. But in some sense, the money never got to FTX and was still with Alameda. Or alternatively, FTX and Alameda commingled funds using the "poorly labelled account" and it was used for whatever payments either company needed to make, like withdrawals. This lack of separation means the balances were never really backed and it was a Ponzi all along.